Seamec Limited ($526807)

Ladies and gentlemen, good day, and welcome to the Seamec Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand... [Audio Gap]

Arihant Capital, I welcome you to the earnings of Seamec Limited Q4 FY '26 Con Call. From the management side today, we have Mr. Naveen Mohta, Whole-Time Director; Mr. Vinay Kumar Agarwal, CFO; and Mr. Sunil Gupta, VP Strategy and Investor Relations. We welcome the management of Seamec on this call. Now I invite Mr. Naveen Mohta sir to give his opening remarks, following which we will open the floor for Q&A. Over to you, sir.

Thank you, Bala. Good afternoon, ladies and gentlemen. On behalf of Seamec, I extend a warm welcome to all the participants joining us today for our Q4 and FY '26 earnings call. Thank you for taking the time to be with us. FY '26 has been a defining year, not just only for Seamec, but for the broader offshore energy sector. We are operating at the intersection of powerful global forces which are reshaping energy security priorities worldwide, and Seamec is extraordinarily well positioned to benefit. The ongoing conflict in West Asia has fundamentally altered how nations think about energy security. Sea routes, which were once taken for granted are now contested, prompting a structural long-term acceleration in domestic exploration and production activities. Simultaneously, strategic global oil reserves are being depleted faster than they are being replenished, making offshore exploration no longer a discretionary investment, but a strategic necessity. India illustrates this trend compellingly. The government has reduced royalty burden on oil and gas producers, reaffirmed plans to expand refining capacity beyond 300 MMTPA and continue advancing offshore exploration through its open acreage licensing policy. In a landmark development, ONGC appointed British Petroleum as technical services provider for the Mumbai field, a clear signal of India's intent to enhance recovery from its most strategic offshore basin. India's growing crude import dependency not only creates strategic vulnerability, but also exposes the economy to global price shocks and rupee depreciation pressure, making domestic energy expansion economically critical. The key beneficiaries are companies with fleet strength, offshore execution capabilities and established client relationships, companies like Seamec. I am proud to report Seamec's highest ever annual revenue and profitability in financial year '26, which is achieved through strong operational execution, higher fleet deployment, improved vessel utilization and disciplined project delivery across domestic and international markets. The key highlights include successful completion of the turnkey revamping of ONGC NLM 9 platform using MB Goodman, demonstrating our end-to-end offshore execution capabilities, integration and commencement of operation of Seamec Agastya, meaningfully strengthening our fleet. 2 significant O&M contracts in consortium with Supreme Hydro Private Limited, a notification of award for MSV Samudra Prabha and Samudra Sevak, both covering 2026 till 2028, substantially strengthening long-term revenue visibility. We also maintain a good presence in Saudi Arabia for almost a year now. I'm happy to mention that client and end client are quite happy with our product delivery. Needless to mention that such happy clients are a precursor to not only more closer cooperation with such clients, but also provides a springboard for expanding the operation with newer clients. The offshore sector is entering a period of sustained investment expansion in subsea infrastructure, brownfield upgrades, deepwater exploration and product enhancement. The global energy transition is accelerating near-term investment in domestic production as nations seek affordable energy during the transition period. We enter financial year '27 with strong order visibility and operationally prime fleet and a team that has proven it can deliver through cycles. The opportunity landscape ahead is as favorable as it has ever been, and we are ready to make the most of it. Just one caution looking at the geopolitical scenario. One of our vessels, Seamec Paladin sailed off to Dubai for completing it s dry dock. However, due to the ongoing war in West Asia, it continues to remain stranded in the yard until Strait of Hormuz is opened for navigation for all Without any risk. Given Seamec limited exposure to offshore oilfield services, prolonged instability or a broader regional conflict could affect contractual execution time lines, asset deployment, operating costs and overall business viability. While elevated energy prices may support long-term offshore activity, near-term disruptions and heightened geopolitical risk warrant close monitoring. With that, I would like to thank everyone again for joining us today. I will now hand over the call to Mr. Vinay Agarwal, our CFO, who will take you through a detailed overview of our financial performance for the Q4. Over to you, Vinay.

Thank you, Naveen. Good afternoon, everyone. I warmly welcome all participants to our Q4 and full year FY '26 earnings call. I will take you through the key highlights of our stand-alone and consolidated financial performance for the fourth quarter and the financial year ended FY '26. Financial performance, Q4 FY '26. On a consolidated basis, with any sort of quarter stood at INR 330 crores compared to INR 209 crores in quarter four FY '25, reflecting a year-on-year increase of 58%. At the standalone level revenue stood at INR 316 crores as against INR 207 crores in the corresponding quarter of the previous year, showing a year-on-year growth of 53%. EBITDA at the consolidated level stood at INR 162 crores in Q4 FY '26 compared to INR 91 crores in quarter 4 FY '25. On a stand-alone basis, EBITDA stood at INR 138 crores versus INR 105 crores in quarter 4 FY '25. Strong vessel deployment, improved fleet utilization and efficient execution across projects contributed to the healthy operational performance during the quarter. Profit after tax on a consolidated basis stood at INR 103 crores compared to INR 41 crores in the same quarter last year at the stand-alone level. PAT stood at INR 87 crores versus INR 58.8 crores in Q4 FY '25. Financial performance for the year ended March '26. Quarter full year FY '26 stood at INR 1,000 crores compared to INR 682 crores in last year, a year-on-year growth of 47%. At the extend of [Indiscernible] revenue fall FY '26 stook at INR 947.5 crores as against INR 660 crores in FY '25. Consolidated EBITDA for FY '26 stood at INR 447 crores compared to INR 244 crores FY in '25. On a stand-alone basis, EBITDA stood INR 407 crores [Indiscernible] INR 264 crores in FY '25. PAT for FY '26 at the consolidated level stood at INR 253 crores compared to INR 88 crores in FY '25. At stand-alone level, PAT stood at INR 242.4 crores compared to INR 115.6 crores in the previous financial year. ROCE and ROE stood at 18% and 19%, respectively, at the consolidated level. With continued support from our stakeholders, we remain confident about sustaining our growth momentum and strengthening our operational performance in coming years. With that, I would now like to open the floor for questions and answers.

[Operator Instructions] Your first question is from the line of Rahil Dasani from MAPL.

Am I audible?

Yes.

Congratulations on a great set of numbers. My list of questions is around our Offshore Shipping segment, particularly. To start with, if you can maybe share more about the charter rate cycle we are currently in. The understanding that I am getting is that there is a demand-supply gap. The shipbuilding is low and also the age of vessels in use is very high and the charter rates have increased a lot. So maybe if you can share more on this and where are we in the cycle?

Let me give you a background. We are operating diving support vessels, which are mainly on the long-term contracts. And during the tenancy of the contract, which is 3 to 5 years, the rate remains firm. Then there are a few contracts which are spot contracts. where the rate fluctuates depending on the demand supply. While we acknowledge the fact that, yes, the market conditions are buoyant, but the large part of the business is protected or blocked because they are working on a long-term contract. We believe that going forward, as you rightly said, the availability of vessels will remain a constraint, and therefore, the market should remain buoyant.

Okay. Maybe if you can share a bit more specific, post 2022, we saw the charter rate doubling year-on-year. Is that sort of growth still continuing? Or has it slowed down? Or have we started seeing some sort of rate tapering off and narrating.

No. Rahil, Naveen here. So the market definitely has been quite buoyant, as you can see as is also evident from the numbers, but it is not that much buoyant. And I wish whatever you are saying that, okay, rates have doubled, I wish it would have happened we would have been given some more terrific number set of numbers for that. Yes, market is buy. And we are seeing that, okay, maybe for another couple of years, we will definitely continue to see this buoyancy in the market where rate will continue to increase, may not be at what we call that it will increase at the rate of growth.

Got it. And if I were to ask another specific question, what would be the latest daily charter rate of our vessel diamond if we were to lease it today?

So Diamond is a vessel which is a supply vessel, which is a typical offshore supply vessel, and it is on charter with ONGC. So that contract is getting us somewhere around $8,100 or $8,200 a day. And going forward, when this contract comes up for renewal, we are looking at an increase of maybe around 10% to 15% may be possible at that point of time depending upon demand and supply.

Got it, clear. And just to understand the demand perspective better, ONGC, Reliance, et cetera, have a lot of incoming projects. If I were to go specific 10 development wells by ONGC, the PRP9 project, also the Reliance KG-D6 block, plus also the general offshore wind and port construction demand. So what sort of offshore vessels demand are we seeing across PSV,MSV,OSV,DSV? If you can quantify numbers, I know it would be very difficult, but approximate if you can give me in the next 2 to 3 years, what sort of vessel quantum demand we are seeing? Is it 20 vessels, 30 vessels, 100 vessels?

See, we are into the niche segment of diving support vessel. We are not into -- mostly into offshore vessels. Of course, we have the diamond, which is offshore support vessel. But this you can consider as an aberration only. So we have got this one offshore supply vessel, but we are into this diving support vessel, which is a predominant business. And there is a demand for these vessels. As you mentioned rightly that PRP9 projects are there and some more projects are there. But that demand is quite balanced kind of demand. So there is just shortage of maybe 1 vessel here and there over a season of time because, these vessels are not required in that kind of number like supply vessels. So it is almost a very good equilibrium kind of thing that, okay, whatever the vessels are available and demand is almost all like that only. So if there's some kind of shortage there, then only vessels are required from outside. So it is fairly balanced right now.

Got it. But again, sorry if I'm going too specific, but I'm just trying to understand this whole industry and also how should we benefit as Seamec as a company. If I were to pick up ONGC, for example, in your presentation, you shared that they have done 9 new discoveries in 2025. So if I were to understand, would discovery be requiring 1 to 2 vessels? Or can it be much more than that? I'm just trying to watch a number.

So I'll tell you. Let's understand the business first. We are neither in the process of identifying the oil wells neither exploring, okay? Our job comes the last. Once the discoveries are done, the wells have been established, the exploration has started. Then we come as a partner for IMR, which is inspection, maintenance and repair. And then we stay till the last. Today, depending on how the discoveries are made, what is the infrastructure that is laid for exploration, that will decide what is the quantum of vessels that we operate will be required.

Okay. Got it. And are we seeing increased competition in tenders for these vessels now or still the bidders are few and same as before?

Competition as usual, it is there. You can't get the work on monopoly basis. So competition will always be there because whoever want the services, they would like to have.

Are you seeing new competitors trying to come in buying new vessels? Are you seeing new competitors?

There are no new competitors. As I told you earlier also that it is fairly balanced just now. The demand and supply are being matched quite fairly. So there are no new competitor.

Sorry for interrupting Mr. Rahil. Please rejoin the queue for more question. [Operator Instructions] The next question is from the line of Rohan Mehta , an individual investor.

Sir, I just wanted to ask about the vessel utilization levels in terms of how these have been during this year? And what can be expected for the next year FY '27 vessel utilization?

If the vessel utilization as such is almost 100% barring off-hires, which happened due to dry dock and unscheduled breakdowns, okay, and depending on the seasonal availability of the contract. You would have seen the announcements we have added new business, which will definitely improve the top line by around 15% in the going forward period.

Okay. Got it, sir. And sir, are there any partnerships or JVs or anything like that on the horizon in terms of the -- maybe even offshore engineering opportunities?

Rohan, right now, we would not like to speculate anything. In case something happens, definitely, we'll make an announcement towards that.

Got it. And sir, if you could give some light on and your opinion on the overall global energy security concerns with the geopolitical tensions and everything, how that's affecting our business and what to expect over the next couple of quarters?

While the entire geopolitical situation has made it clear that with 15% in-house production, India cannot survive and hence, India has to be more self-reliant in energy sector as well, which will definitely create a lot of business opportunities for Seamec and companies which are prevalent in energy sector. How things will shape up, probably after this whole episode settles down, things will be more clearer.

Got it. Understood, sir. Just lastly, are you seeing any pricing pressure or pressure from competition when we are bidding for offshore contracts?

No, not right now.

Okay, okay. Any guidance that you might like to give for the next year in terms of top line or margin?

I already said that we are expecting about 15% growth in top line and bottom line next year.

The next question is from the line of [ Abdul Rafay from CATHEXIS ].

First, I would like to congratulate the team on strong yearly performance. So I have a few questions. The first one being regarding the 2 O&M contracts awarded from ONGC. It is in consortium with Supreme Hydro. So my question is, have both the contracts commenced operations? And also, could management clarify the revenue profit sharing with Supreme Hydro?

Okay. So if you are monitoring the announcement on the stock exchange that we are making, so Samudra Sevak has already been taken over and it has started working. And same with Samudra Prabha also, which has been taken over in May. And it is for operational reason, it is just now in Mumbai getting all this changeover done. And by -- most likely by first week of June or something, it will -- she will go into the work and we'll start earning the [Indiscernible] And as far as...

Could you tell about the profit sharing, sir?

So the share of this Supreme is around 10% into the consortium.

What scope of services are being provided by Supreme Hydro?

They are providing us the technical know-how along with their manuals and some personnel.

My next question is for FY '27, vessels like Seamec Swordfish and Seamec Agastya are expected to contribute for the full year versus partial deployment that was last year, while Seamec Anant is also likely to commence operations soon. And along with the 2 ONGC O&M contracts that we just talked about, would it be fair to expect an incremental revenue contribution of roughly INR 500 crores? And if so, then the revenue guidance for the next year of just 15% is, in my opinion, it would be -- we would be doing much more than that. Is my assumption correct?

Sir, your assumption is not right, and I would not like to comment further beyond 15%. See, there are a lot of business decisions, timings, like you would know that Seamec Paladin is still in Dubai, not operating, okay? Seamec 2 is operating only till August 2026. So I've given a guidance, and I think the rest working you can do yourself.

All right, sir. So my final question would be, are we currently in discussions for additional O&M contracts with ONGC or major other companies?

See, as and when we get new contracts, you will be the first person on stock exchange to be known.

All right. Sir, one last question. When can we expect the deployment of finance.

See, there are 2, 3 things that are creating a hindrance because our Paladin is right now not in operations, not doing the business. If the Anant movement happens, again, it will also go out of field for some time, which ONGC will not permit. There are some more complications. So we see one more quarter maybe by the time Anant will come to our fleet.

The next question is from the line of Nishita Shanklesha from Safire Capital.

I just had one question. In FY '27, do we plan to procure any more vessels.

Yes. See, there are some intimation already which is known to everyone that we have already told that we will be acquiring. So that is already a known fact to everybody. Apart from that, we continue to look for suitable unit as and when we find something which is going to add value to the stakeholders. So definitely, we will be going for that acquisition. But right now, nothing is specific or specified in the pipeline.

Okay. And the funding of that will be done from internal accruals only?

Again, that is depending upon the transaction and whatever is best for the stakeholders that will be done.

Okay. Understood. And what is the total CapEx amount that we've done in FY '26 and the amount that we plan to do in FY?

So we have done about INR 300 crores CapEx in FY '26. In FY '27, as Naveen just mentioned, the Anant is roughly about $70 million, which is the scheduled CapEx.

[Operator Instructions] The next question is from the line of Tejas, an individual investor.

Am I audible?

Yes, you are. Please go ahead.

Congratulations for a good set of numbers to you. Sir, just to take from the previous participants said, so you said that Samudra Prabha, our share is 90%. Is that the correct understanding? Did I hear it correctly?

Yes, yes. So what we have mentioned is already that 10% of the consortium share is there. But then there will be subcontracting costs and other costs and all those things will be there. But yes, technically, what you heard is correct.

Okay. And sir, how is this payment? Is it like milestone based or like we will get billing quarterly because the value is INR 348 crores and INR 270 crores, and it's more than 2 years, roughly 2 years contract. So how do you get the payments for these?

Payment is same like our other vessels. So it is on a monthly basis. So we bill to ONGC at the end of the month. And as per the agreed payment terms, they make the payment to us.

Okay. So it is divided like equally, if I understand correctly, per month, the amount roughly.

Yes. Correct.

Okay. And sir, you mentioned that obviously, Paladin is still stuck in Dubai. What about Princess? Because I believe Princess is offered from 21st April -- so that still remains unhired. Is that understanding correct?

No, no, no. The Princess was acquired for the specific segment of work which we have contracted in between. But the broader contract with L&T is continuing and the vessel is still working.

And that continues the previous old rate, the charter rate of Princess. And can you confirm Seamec Diamond's rate that we have offered -- the current rate that you're offering Diamond at?

There has been no change from the declaration which was made at the time of commencement of the contract. There is no change of that.

To be very specific, this is a kind of $8,750.

Sorry sir, I'm not able to hear you. Can you come back again?

$8,770 per day.

The next question is from the line of Mahesh Kumar from MU Investment.

Am I audible? So I had a 3 questions. First on the revenue and the EBITDA. So we had a very good strong revenue in FY '26, around INR 652 crores, INR 2,000 crores, and EBITDA margin have also improved nearly 45%. So like as an investor, should we see this earnings level like sustainable earnings level? And can margin fluctuate depending on the vessel deployment and the dry docking schedules?

See, while we gave a guidance that we should be doing about 15% growth in revenue, the margin should be in the range of 40% to 42%.

Okay. Okay. And recently, like we acquired Seamec Agastya and also we're looking for acquisition of Seamec Anant. How much additional revenue potential can these vessels generate? And what utilization level are you targeting over the next 2, 3 years?

See, both the vessels are already on charter with ONGC. So deployment will not be issue. Depending on when Seamec Anant comes to Seamec fold, will clarify the potential of revenue. And Agastya is doing full revenue next year, that is for sure.

Okay. Okay. Okay. And lastly, sir, what percentage of revenue currently comes from international markets? And how do you plan to diversify the client base further in region like Middle East?

About 10% to 15% is the revenue that comes from international market. And definitely, depending on the vessel availability, we would like to tap that market.

The next question is from the line of Rishi Kothari from Capital Bridge Advisors.

Just wanted to know in terms of the growth that we are expecting for next year, what sort of risk that could hinder our growth? What potential risk that management in terms of business for us? Because, of course, the industry that we are is pretty much volatile in nature, right? So what risk factor we are considering for the business?

See, there is a war that's going on for the last 3 years. There is a new escalation that has happened recently. We don't know what will happen. One of the vessel is stuck in Dubai, depending on how this situation percolates. This can be a risk. There is another vessel which is right now running profitability in Saudi Aramco. If situation aggravates, that can be a risk. Other than that, we generally do not see any major risk or there can be a risk of rupee strengthening.

Okay. Understood. So in terms of business understanding, I just want to confirm that post any sort of oil and gas companies have actually discovered in the oil fields, correct? Post that, whatever sort of expansion part comes into, that's where we as a business come in, correct for them?

Yes, correct.

So by that, we will -- is there any [Indiscernible] discovery and everything that's stuck in oil and [Indiscernible] is everything that you will have the business. That's where we hire ship operators.

Sorry, your voice is not coming clear. So I'm not able to understand the query.

Am I audible properly now?

Yes. Now it is much better.

Yes. Just want to understand that the oil and gas company actually explodes the oil in the oilfield side. Post that, when it comes to extraction and maintenance of that oil, that's where our vessels come into picture as a business for them.

Correct. Correct.

Okay. And we don't see any sort of risk related to business at all look at the competitive landscape, are there any other companies involved in the same business?

We do not look at any kind of risk right now. And apart from -- see, we are one of the largest shipowner of these diving support vessels. And as far as others are concerned, they are like 1 vessel owner or 2 vessel owner kind of companies are there. So we got the biggest fleet of these DOCs.

Okay. Understood. So we don't see any sort of competitive or competition per se because from anyone in the industry, any sort of foreign players or MNC players we look at? Or is it just purely no competition at all per se at least under the business geography that we...

No, no. It never happened that we will not have any kind of competition. Competition will be there. But since we have one of the largest fleet of vessels, we have got our own strength and which -- that's why there are clients which have been working with us for quite a long period of time. So certain edge are there based on which we are able to get the business. And foreign vessel owner, again, because it is our home turf and there are certain protections provided by the government as well as entry barriers. So they are not that much keen on coming into India.

Okay. Understood. And that's where we think that this is one of the competitive advantages that company carries.

Of course, this is one of the things. But besides that, all the work is obtained on the competitive basis only, unless we are providing a competitive package, nobody is going to take that package.

And the rate of this package, the rental per day, whatever we charge to the client, it is decided based on market conditions, demand and is it -- we are a price maker or price taker for our price in terms of charging it?

No, it is neither a price maker or something like. It is a discovered price. Our client who has got the job, they bid on the basis of some different kind of thing. And then if the cost package is viable to them, then they definitely take the work with us. And as far as ONGC is concerned, the charter rate, they base it or benchmark it against the international charter rates.

So there are 2 different pricing mechanism for our clients to charge in a way?

Yes. So when we say the charter higher kind of rate at ONGC or other vessel owners, so it is the benchmark internal -- and when we are taking the spot market that EPC kind of job, so the price of the entire package, which they benchmark against their own internal estimate.

The next question is from the line of Tejas, an individual investor.

So regarding our U.K. investments, so we had -- I think I recall that last year, we had done this to ensure to get more business from Europe... So we were trying to get more business from Europe and because we believe in Norway and et cetera, had better rates. But we see an impairment charge in this subsidiary right now. So have we abandoned that? Or what is the progress on the U.K. subsidiary? Where are we in that? If you can just share some light on that?

See, we have not abandoned anything. The only thing is because of the current geopolitical situation, on a prudent basis, we have just taken that impairment. Otherwise, there is no potential impact.

This is just an accounting adjustment. Nothing is hampering us in terms of project execution.

So what's the progress on that, sir? Are we close to getting any contracts? Are we pitching anything? Do we see any progress? If you can share some inputs insights on that?

See, right now, we would like to refrain from it. As soon as we get some contract, we'll definitely announce. But the endeavor of the management and the company is that Seamec should be a growth-oriented company and contribute to the nation's growth. We have done it in 2026. We are confident for '27, '28, and we'll do every best effort, which is in the interest of the company and its stakeholders.

Okay. And sir, when usually when we have these vessels being deployed and for some reason, when there is it's off-hire for 10 days, 12 days for technical issues. So in that case, does that 10, 12 days amount gets deducted from our value? Or do you have to separately compensate to ONGC? How does it work on a broad level?

When the vessel is on off-hire, the company is not being paid for those off-hire days.

[Operator Instructions] The next question is from the line of [Indiscernible], an individual investor.

Sir, could you please share some details about the MSV Samudra Sevak contract and MSV Samudra Prabha contract, like what kind of revenue potential and margins can we expect?

See, we have already announced these contracts and the revenue potential of both the contracts and the tenure of the contracts is already declared on the stock exchange. I think that filing you can download or reach out to our IR agency, they'll provide you.

And both the contracts are up to 31st of March 2028.

Would that 18% for FY '27, 3 vessels are scheduled for dry docking [Indiscernible]. Can you say the [Indiscernible] for dry dock and [Indiscernible].

3 of our own vessels are due for dry docking and 2 of these vessels which we have taken from ONGC that O&M contract, which we have taken. So they will also be going for the dry docking during the year.

The next question is from the line of Amish Kanani from Knowise Investment Managers. Sorry to interrupt Mr. Amish sir. Could you please come more closer to your handset. Sorry Amish sir, your voice is breaking.

Congrats on a very good set of numbers. Sir, if I remember in Q3, you said Q3 margins were relatively high and peak and you were kind of cautioning us for not assuming such kind of high margins, but Q4 has been margin at a much higher level. The question is -- and there was some one-off in Q3, if I remember correctly, either on the expense or revenue line item. And still, our Q4 numbers are very good. So the first question, sir, is, is there any, again, one-off in Q4, which we need to kind of be aware of? And hence, you are guiding a lower level of margins for next year?

No, we are not guiding any lower level margins. Please understand. When we cautioned you in Q3, that has actually happened. Seamec Paladin has not operated for Q4. And even Q1, we are not seeing the operations till date, okay? So depending on the dry dock schedule and depending on the mix of the contracts, the margin profile may vary between 2%, 3%. But what we are saying, we are still be maintaining a stable margin of 40%, 42%. That is the guidance. We are not reducing our margin guidance. Secondly, there is no one-off in Q4. However, since you have raised this, Paladin is still stuck there. So for April, May, we are not seeing the revenue from there, depending on the geopolitical situation, will be clear for June.

Okay. Sir, one quick question and explanation in the sense. In the third and the fourth quarter, numbers are very high in and Q2 is seasonally off, right? So what my question was 2 parts. One, there is -- and also there is a benefit of, sir, rupee depreciation that you would have got. So in that context, sir, one annual margins will be lower than the Q3 and Q4 margin that we have posted. So that is what I was referring to an annual margin, which is lower than the average of Q3 and Q4. That's what I'm saying.

We generally don't talk about quarterly margins because there can be quarterly aberrations. Annually is what I'm saying because see, this is a big function -- while absolute EBITDA will always grow, but depending on EPC business grows or IMR business grows. So we generally guide that the margin profile is in the range of 40%, 42%. 1% or 2% higher depending on the utilization is always welcome.

And sir, quick -- two clarification here. Sir. Seamec 1 and 2 were old vessel and maybe we are assuming some higher dry dock or off-hire kind of a situation. And in that context, sir, my understanding, if you can clarify whether the O&M margins, the new 2 vessels that we have announced, which is only O&M margins. Will that be at a higher margin or blended EBITDA margin for the year is what we should build in?

So the blended EBITDA margin is more relevant because, see, depending on off-hire, depending on seasonality, things can really change. So what our intention is that we should grow revenues, we should maintain margin or improve margin on an annualized basis, which is still the case. And despite this war going on, we are saying that next year number should be encouraging.

And sir, one last clarification here. Seamec 1 and 2, have you assumed...two-entry, sorry.

So have we assumed any aggressive off-hire and offencing? And maybe with this kind of condition, there is a surprise on the upside, just as Seamec 2. As one of my colleagues would have said, is right now contracted till August 2026. Post August '26, it will go for a small dry dock. And then depending on the market conditions, we'll see whether we can deploy it on a spot market contract. Seamec 3, we believe that it did exceptionally well in this FY '26. And we believe and we are confident that the performance should continue for FY '27 as well.

The next question is from the line of Rahil Dasani from MAPL.

Just to confirm what you said last time, the rate of diamond vessel is right now at $8,000 to $10,000 and when it comes for renewal, it may increase 10% to 15%. But when I see similar OSVs currently used in the spot market, they are growing at INR 17 lakhs to INR 20 lakhs per day, which is more than double our rate. So why do you think there is this difference? And how should we understand that?

We'll be happy to know which vessels of similar capabilities are getting this kind of rate, if you have any info...

Diamond and [Indiscernible], these 2 vessels.

No, no, they are higher capacity vessels, and they are not being used as supply vessels. They are mostly -- if I recollect, they are on the geotech work and those kind of well stimulation work they have been done. So that's why they are getting more better number of rates. So there capability-wise, size-wise, they are much bigger than the diamond.

Okay. Got it. Got it. Okay. And similarly, you were just speaking about supplying to Aramco. We know you supply ONGC. So I would like to understand how easy or tough it is to get approved by vendors like ONGC, Reliance, Aramco, ADNOC and get them to -- and start supplying them with vessels because I believe this is very critical work that our vessels usually do.

Yes, it is a very lengthy process, and it is quite difficult process. So that's why these are the entry barrier, which companies enjoy like working for ONGC now we are working for so many years now. So we have got that advantage of prequalification. Similarly, now we are working with Aramco. So there are we have already created a track record of working for more than a year, almost like a year. So these are -- once we have delivered this, then only you will be able to bid directly to ONGC like we will not be -- right now, we'll not be able to bid directly to Aramco, but our vessel is working, which is creating a track record. So this is how you get qualified for bidding directly.

But how long will it take according to you to get approved by such high-level vendors like ONDC, Aramco?

It varies from vendor to vendor. Each vendor has got their own set of qualification requirements, which will be for the vessel also, which will be for the company also. So these are different, different kinds for each client.

Got it. Okay. And based on whatever I just from this call is that based on the shortage that we are seeing in the offshore segment and which you have also been saying and hence, for the next 2, 3 years, we will see a buoyancy in rates was a particular comment you said. So are we looking to aggressively expand in this segment? Or do you think the current market situation is not a good plan to and to add more offshore vessels at these premium rates maybe?

No, no. We definitely are seeing growth in the market and the shortage is there. But we are definitely not chasing the growth aggressively because these are all high CapEx items and not the small value. And once the growth tapers down, then it will become a drag on the balance sheet, and we don't want to do that one. So we are happy to just expand the fleet and keep it deployed. That is much more advantageous to us rather than having a large fleet and which is sitting idle.

Okay. Got it. And for example, one of the previous participants asked you regarding the upcoming ONGC tenders for which you said you will announce it with time. But if I were to just go a bit global because of all this war, we have seen a lot of oil and gas infra getting impacted in UAE and Dubai, and more on the Middle East side. So are we seeing more inquiries flowing in and hence, enhancing the shortage of these vessels even more or still no inquiries, no demand, no increased demand from that market yet?

See, there will be definitely demand, which will be coming because right now, the situation is -- it is just not closed. Rather due to this ongoing issues, there are some cause which has taken place that even though damage has taken place, but nobody want to repair those damage or increase their requirement because nobody knows how long this is going to continue. So till the time this issue settle down, you won't be seeing any kind of immediate kind of requirement. But yes, the requirement is going to go up from the now.

The next question is from the line of Tejas, an individual investor.

Regarding -- can you just share what was the contribution from our subsidiaries in top line and bottom line for FY '26?

See, there is no major contribution of our subsidiaries for FY '25, '26. Basically, we have pruned down the operations in Dubai, okay? We have sold a vessel last year. And there is another vessel which we might be selling in the coming year. Idea is that we should strengthen and focus on our core business and grow that business from strength to strength.

So sir, are you referring to either fall or garden to be sold off next year because the 2 bulk carriers that we have.

So one we are definitely looking at, depending on the market conditions. Post this war scenario, let the market open and then we'll be able to guide it properly.

Okay. But we'll retain 1. So we'll either poll out talent will retain and one will sold. Yes, that's the plan. So currently, there's no revenues being generated from those. Is it fair to assume in this -- at the current period of time?

The line has dropped. We take this as the last question. I now hand the conference over to the management for the closing comments. [Operator Instructions] Ladies and gentlemen, thank you for being on hold. The management line has been reconnected. Thank you and over to you sir. Sir, the line has dropped. We take this as the last question. I now hand the conference over to the management for the closing comments.

I thank you all the investors who have joined for this investor call and hope that all the queries has been reasonably replied to. Thank you. For anything else, you can definitely get back to our team for getting further information. Thank you.

Thank you. On behalf of Arihant Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.