About The Company ( Website : http://www.deepindustries.com/ )
Market Cap: 539.03 Cr. Current Price : 184.60
Book Value: 92.50 Stock P/E: 10.68
Face Value: 10.00 52 Week High/Low: 215.80 / 108.00
The company operates in following business segments :
Gas Compression: First Company in India to provide high pressure Natural Gas Compression Solutions on contractual basis. Clients are mainly Gas Power Plants, National Grids and LNG Terminals
Work Over & Drilling Rigs: Key Player in India providing Onshore Workover and Drilling Rigs Services. Clints in this sector include Oil Producers – ONGC, Cairn, Essar, OIL India
Gas Dehydration: First Company in India to provide Natural Gas Dehydration Solutions on contractual basis. The customers in ths segment are Onshore Exploration Companies such as ONGC & OIL India
Exploration & Production: Oil & Gas Exploration & Production from conventional and unconventional resources in India and Indonesia
Deep Industries Limited started in the year 1991, with a primary objective of catering the demand for Oil and Gas Industry. It started with providing Air & Natural Gas Compressor Services on chartered hire basis. In this field the company commands a healthy market position and is also the first company in India to offer such services.
In the year 2006, company successfully diversified itself in providing Workover & Drilling Rig Services on chartered hire basis. Currently, company holds a strong fleet of Onshore Workover & Drilling Rigs ranging from 150 HP TO 1500 HP.
Deep Industries Limited successfully forayed itself in Exploration and Production segment and having various Onshore Oil and Natural Gas blocks, Coal Bed Methane Blocks awarded under different rounds of NELP and CBM bidding. After successful stint in Exploration and Production Business in the country, Deep Industries Limited has also been awarded Onshore Coal Bed Methane Block in Indonesia. The Company has grown up to be a “One Stop Solution” provider for every need in Oil and Gas field operations by catering various equipment and services under rental and chartered-hire basis
Financials:
| Quarterly Results (in Rs. Crore) | ||||||||
| Sep-14 | Dec-14 | Mar-15 | Jun-15 | Sep-15 | Dec-15 | Mar-16 | Jun-16 | |
| Sales | 25.43 | 26.08 | 22.75 | 27.26 | 34.24 | 52.69 | 54.88 | 64.39 |
| Expenses | 11.6 | 11.63 | 10.65 | 11.53 | 15.49 | 21.41 | 24.48 | 27.65 |
| Op Profit | 13.83 | 14.45 | 12.1 | 15.73 | 18.75 | 31.28 | 30.4 | 36.74 |
| OPM | 54.38 | 55.41 | 53.19 | 57.7 | 54.76 | 59.37 | 55.39 | 57.06 |
| Other Income | 0.34 | 0.32 | 0.43 | 0.24 | 0.34 | 0.17 | 0.12 | 0.24 |
| Depreciation | 2.78 | 3.34 | 1.86 | 3.31 | 3.52 | 4.4 | 9.2 | 6.85 |
| Interest | 2.97 | 3.07 | 2.25 | 2.51 | 3.75 | 4.05 | 4.72 | 6.56 |
| Profit bef tax | 8.41 | 8.36 | 8.41 | 10.15 | 11.82 | 23 | 16.6 | 23.57 |
| Tax | 3.09 | 2.79 | 3.88 | 3.42 | 3.81 | 9.67 | 3.78 | 7.26 |
| Net Profit | 5.32 | 5.58 | 4.53 | 6.73 | 8.01 | 13.34 | 12.82 | 16.31 |
| Annual Results (Figures in Rs. Crores ) | ||||||||
| Mar-09 | Mar-10 | Mar-11 | Mar-12 | Mar-13 | Mar-14 | Mar-15 | TTM | |
| Sales | 33.5 | 55.34 | 46.27 | 60.44 | 65.09 | 90.77 | 101.25 | 206.2 |
| Expenses | 14.96 | 24.44 | 20.52 | 31.71 | 29.12 | 38.45 | 46.27 | 89.03 |
| Op Profit | 18.54 | 30.9 | 25.75 | 28.73 | 35.97 | 52.32 | 54.98 | 117.17 |
| OPM | 55.34 | 55.84 | 55.65 | 47.53 | 55.26 | 57.64 | 54.3 | 56.64 |
| Other Income | 0.93 | 0.76 | 1.87 | 0.91 | 1.81 | 1.21 | 1.32 | 0.87 |
| Interest | 3.5 | 4.65 | 3.86 | 4.52 | 6.44 | 8.7 | 10.77 | 19.08 |
| Depreciation | 3.71 | 5.83 | 6.23 | 7.06 | 10.07 | 12.04 | 12.15 | 23.97 |
| Profit before tax | 12.26 | 21.18 | 17.53 | 18.06 | 21.26 | 32.79 | 33.4 | 74.99 |
| Tax | 4.64 | 6.81 | 5.67 | 6.03 | 9.12 | 12.74 | 12.13 | 24.52 |
| Net Profit | 7.62 | 14.37 | 11.86 | 12.03 | 12.14 | 20.04 | 21.27 | 50.48 |
| EPS (unadj) | 3.81 | 6.68 | 4.96 | 4.75 | 4.53 | 7.45 | 7.08 | 17.29 |
| Dividend Payout | 0 | 7.38 | 9.95 | 10.31 | 13.01 | 14.57 | 13.73 | |
| Share Capital | 20 | 21.25 | 23.5 | 24.88 | 26.25 | 26.25 | 29.2 | 29.2 |
Compounded Annual Growth Rates (CAGR)
| CAGR 10 yrs | CAGR 5 yrs | CAGR 3 Yrs | CAGR TTM | |
| Revenues | 33.95% | 12.84% | 18.76% | 103.11% |
| Net Profit | 34.94% | 7.97% | 20.87% | 127.80% |
The company has been posting good results and has been consistent in its performance. Net profit of Deep Industries in Q1Fy17 Results : rose 142.35% to Rs 16.31 crore in the quarter ended June 2016 as against Rs 6.73 crore during the previous quarter ended June 2015. Sales rose 136.21% to Rs 64.39 crore in the quarter ended June 2016 as against Rs 27.26 crore during the previous quarter ended June 2015
Assessment:
- Deep Industries enjoys Care A-/Crisil A- for Long term & Care A2+/Crisil A2+ rating for Short term bank loans
- The company has Technology Tie-Ups with reputed and experienced compressor packagers in USA for the supply of Gas Compression Package allowing company to provided these packages quickly.
- Market leader in Gas Compression and Dehydration business on a Contractual basis with 90% of the market share in compression Business
- There lies a vacuum in onshore rigs business with few experienced players exiting the market. The Company has been aggressively growing its Rigs business in this mid segment space
- The Government has made it mandatory to have gas dehydrated before insertion to the pipeline which gives immense opportunity to the company.
- The company has an extensive order book from reputed clients.
- Possible risks come from equity dilution & increase in debt level in execution of projects
- Promoter holding in the company stands at 70.08%
- No mutual funds are holding stake in the company
- Company has more than two decades of experience in Oil & Gas sector
- The company has three drilling rigs and 9 work over rigs for hydrocarbon exploration
- Order book stands at 845 crore to be executed in 2-3 years. 40% gas dehydration, 30 % work over & rigs, 30% gas compression.
- Exploration & Production business to start contributing from 2018-19, company is likely to shelve E&P business to subsidiary company & keep its focus on services.
- Out of 65 crores in Q1 Fy17 , Gas compression contributed 25 cr and Gas Dehydration contributed 22cr
- Focus on services could reap good dividends for the company if it can maintain this temp.
Standard disclaimer. I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk.