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Asian Energy Services Limited — Q4 FY25 earnings call

Call held 19 May 2025

Management summary

Asian Energy Services delivered a strong Q4 and FY25, with FY25 revenue growing 52% to ₹465 crores and PAT increasing 65% to ₹42.2 crores. The company announced the strategic acquisition of Kuiper Group for $9.25 million, a debt-free entity, to expand its O&M services globally. Despite a temporary slowdown in the seismic segment and Q4 margin compression in one project, management provided robust FY26 revenue guidance of ₹650-700 crores (excluding Kuiper) and expects recovery in the affected segments, maintaining a healthy financial outlook.

Highlights

FY25 Revenue grew 52% YoY to ₹465 crores, meeting guidance.
FY25 EBITDA increased 67% YoY to ₹72.3 crores, with EBITDA margin expanding to 15.5% from 14.2% in FY24.
Q4 FY25 recorded the highest ever quarterly revenue of ₹215.4 crores, an 81% increase YoY and 135% sequentially.
Acquisition of 100% stake in Kuiper Group for $9.25 million, a zero-debt company, expected to expand global O&M capabilities.
Proposed dividend of ₹1 per share for FY25, reflecting commitment to shareholder returns.

Concerns

Q4 FY25 Oil & Gas segment experienced margin compression due to cost escalation in one specific project, though recovery is expected.
Seismic business revenue slowed to ₹72 crores in FY25 from ₹120 crores in FY24, but management expects recovery to previous levels.
Trade receivables increased from ₹135 crores to ₹224 crores in FY25, largely due to heightened Q4 activity and retention money, which management clarified as healthy.

Key financials

2 periods

Headline

Revenue from Operations
₹465 Cr
YoY +52%
EBITDA
₹72.3 Cr
YoY +67%
EBITDA Margin
15.5%
PAT
₹42.2 Cr
YoY +65%
PAT Margin
9.1%

Q4

Revenue from Operations
₹215.4 Cr
YoY +81% QoQ +135%
EBITDA
₹33.7 Cr
YoY +35%
EBITDA Margin
15.6%
PAT
₹22.6 Cr
YoY +54% QoQ +174%
PAT Margin
10.5%

What they filed

Q1 FY27: revenue up 135.7%, net profit up 116.7% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	98	92	215	115	102 +4%	235 +155%	338 +57%	271 +136%
Expenses	82	79	184	104	94	207	290	250
EBITDA	15	13	31	11	8 −47%	28 +115%	48 +55%	21 +91%
Margin	16%	14%	15%	10%	8%	12%	14%	8%
Other income	2	3	4	3	-4	4	0	4
Interest	1	1	2	2	2	4	3	4
Depreciation	4	4	5	5	5	4	5	4
Profit before tax	13	11	29	8	-3 −123%	24 +118%	40 +38%	17 +113%
Tax rate	27%	26%	23%	28%	48%	27%	18%	25%
Net profit	9	8	23	6	-4 −144%	18 +125%	33 +43%	13 +117%
EPS	2.07	1.84	5.03	1.24	-0.85	3.90	7.11	2.46

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue

₹680.5 Cr Total

Mineral & Other Energy (FY25) ₹272.6 Cr 40.1%
Oil & Gas (FY25) ₹192.4 Cr 28.3%
Mineral & Other Energy (Q4 FY25) ₹109.1 Cr 16.0%
Oil & Gas (Q4 FY25) ₹106.4 Cr 15.6%

Capital allocation

high confidence

Capex $9.25 Mn Kuiper acquisition funded by 5-year loan and cash; AGCL capex recovered within 3 years.
- Acquisition of Kuiper Group $9.25 Mn
- AGCL BOOT project ₹40 Cr
In FY '26, there's one capex, which is definitely the acquisition of the Kuiper, which we have already informed. And as we told you, we have got one project of AGCL on the BOOT basis where some capex has already happened in the last year and some capex will happen into this year. ... The capex amount which we'll be incurring this year on that particular project will be between INR40 crores to INR45 crores.
Debt Net ₹80 Cr

So, as you must have seen, we are a positive cash company. After excluding whatever the short-term debt we have, we have roughly around INR80 crores of net cash and bank balances.
Dividend ₹1/share (final)

In addition, in recognition of our strong financial and operational performance in FY '25, we are pleased to propose a dividend of INR1 per share, subject to shareholders' approval.
M&A Kuiper Group Acquisition · Pending regulatory · Consideration ₹[object Object] (cash)

Expand integrated operation and maintenance capabilities, diversify service offering and scale global presence across high-growth domestic and international markets, specifically Middle East and Southeast Asia.
Zero-debt company, acquired on cash-free, debt-free basis. Net assets acquired are above acquisition price, so no goodwill or depreciation impact on Asian's books. Current EBITDA margins are 8-9%.

The acquisition of 100% stake in Kuiper Group, which is based out of UAE from private equity firm Gulf Capital for a total consideration of USD9.25 million in an all-cash transaction. ... With revenues of approximately USD68 million in the year ending December 2024 and a proven track record of profitability, Kuiper brings deep industry expertise... EBITDA margins are roughly around 8% to 9% current level of EBITDA margins, and we do definitely see good scope in improvement of those margins. ... we are acquiring the Kuiper on debt-free basis. And as we told you, the current assets which we will be getting with the Kuiper, which will be over and above what the acquisition price we will be paying. So, in our books, we do not see any depreciation will be coming of the Kuiper acquisition because there won't be any goodwill creation.
Liquidity Cash ₹80 Cr · Undrawn ₹110 Cr Company is a positive cash company with robust cash flows. INR157 crores raised via preferential warrants, with INR110 crores still undrawn. Working capital limits are lined up with banks, and Kuiper acquisition is not expected to require significant additional working capital.

So, as you must have seen, we are a positive cash company. After excluding whatever the short-term debt we have, we have roughly around INR80 crores of net cash and bank balances. ... we successfully raised INR157 crores through the issuance of preferential warrants. ... So, there's a almost undrawn amount of INR110 crores is also available there. ... So, we do not see any additional requirement for any funds or any new additional working capital requirement for that particular business.

Guidance & targets

Revenue

Total Revenue (excluding Kuiper) Revenue · FY26 · High confidence ₹650-700 crores

Excluding revenue from the Kuiper Group, which will be recognized post acquisition, we expect revenues in the range of INR650 crores to INR700 crores, reflecting a robust year-on-year growth of 40% to 50%.

— Kapil Garg, Managing Director

EBITDA

EBITDA EBITDA · FY26 · High confidence ₹110-120 crores

EBITDA is also projected to rise to INR110 crores to INR120 crores, indicating a 52% to 66% increase

— Kapil Garg, Managing Director

PAT

Profit After Tax PAT · FY26 · High confidence ₹70-75 crores

while profit after tax is expected to grow by 66% to 78%, reaching between INR70 crores to INR75 crores.

— Kapil Garg, Managing Director

EBITDA Margin

Standalone Asian EBITDA Margin EBITDA Margin · FY26 · Medium confidence 17-17.5%

See, currently on the Asian standalone business without Kuiper, we have given a guidance of EBITDA margins of roughly around 17%, 17.5% for the next year.

— Sumit Maheshwari

Revenue Split

Revenue Split (Infra vs Oil & Gas) Revenue Split · FY26 · High confidence 50-50

Yes. So, we are looking roughly around 50% - 50%, between 45% to 50% coming from our Infra segment and another 50% is coming from our oil & gas segment. That's what we have been looking in our guidance.

— Sumit Maheshwari

Project Completion

CHP Projects Completion Project Completion · FY26 · High confidence 3 projects

Out of the 6 projects we have been currently doing, three projects are likely to be completed into this financial year, two projects by September, October, we'll be completing and 1 project by December.

— Sumit Maheshwari

Retention Release

Retention Money Release Retention Release · FY26 · High confidence ₹25-30 crores

But as I mentioned to you earlier also, there will be a retention release of roughly around INR25 crores to INR30 crores from the business.

— Sumit Maheshwari

What to watch in Q1 FY26

Kuiper Group acquisition completion

Next quarter (Q1 FY26)

Current Expected by end of June 2025

Target Completed

Why it matters

This is a major strategic acquisition that will impact the company's global presence and O&M capabilities, and its completion is a prerequisite for combined guidance.

The acquisition is expected to be completed by the end of June this year.

Risks & concerns

Kuiper Group revenue volatility
medium

Kuiper's CY24 revenue was $68 million, down from $82 million in 2022, attributed to Saudi Arabia de-hiring offshore assets and slowing projects, though management states numbers are picking up again.

Analyst downplayed
Q4 FY25 Oil & Gas segment margin compression
low

One specific project's delay and associated cost escalation led to Q4 O&G EBITDA of ₹11 crores on ₹106.4 crores revenue, but management is in discussions for recovery expected in Q1 FY26.

Analyst acknowledged
Seasonality in execution for seismic and infra businesses
low

The Q4 was heavy, but seismic and infra are subject to weather-related issues. Management suggests focusing on YoY growth and expects reduced cyclicality with O&M and Kuiper acquisition.

Analyst acknowledged

Q&A highlights

7 direct

Mineral segment order flow and new tenders for coal handling plants Direct

in last 6 months, there was definitely a slowdown into the tendering activities also, which has led to some slow order inflow for us also. ... But now the tendering activities has picked up recently. We have submitted a bid for a large tender, which we are expecting to open sometime in near future.

Addresses a key segment's order book visibility after a slowdown, indicating potential recovery and future growth drivers.

Asked by Siddharth Chauhan

Kuiper Group's current order book and revenue coverage Direct

Kuiper Group is not into a typical EPC type of the business order book. They have a long-term master services agreement and long-term commitment with their key client, and they are especially into O&M business. ... they have a minimum 2 to 3 years of coverage for this revenue for next year, for coming years.

Clarifies the nature of Kuiper's business model (O&M, long-term contracts) which is different from typical EPC, providing revenue stability.

Asked by Siddharth Chauhan

Kuiper Group's turnover decrease from 2022 to 2024 Partial

the business has remained stable for the entity which we have acquired between $70 million to $75 million per annum. And definitely, the last year, there was some dip into the Kuiper business turnover because Saudi Arabia has de-hired some offshore assets and have slowed down some offshore projects, which has led to the temporary dip into the numbers in the last year. This year, whatever we have seen, the numbers have again started picking up.

Addresses a potential red flag regarding the acquired company's declining revenue, providing context and indicating a recovery trend.

Asked by Deepak Rawat

Increase in trade receivables for FY25 Direct

largely on account of the heightened activities, which has happened into the Q4, which has led to the increase into the debtor. And you remember, we have talked about some retention money. ... Out of that INR224 crores of the overall receivables, roughly around INR55 crores of receivables pertains to retention, which will release some part will get released in FY '26.

Explains the significant increase in receivables, attributing it to higher Q4 activity and retention money, alleviating concerns about collection issues.

Asked by Deepak Rawat

Q4 FY25 margin decline in the Oil & Gas segment Direct

in one of our particular project where part of the project has been done into the Q4, there has been the cost escalation. So, in the Oil & Gas segment, that's the reason the margin for the Q4 specifically in the oil & gas segment has slightly tapered off. ... Now the project is going to get completed into the Q1, and we are already in discussion with our client for recovery of those cost escalation.

Identifies a specific, one-off reason for margin compression in a key segment, with a clear path to resolution and recovery expected in the next quarter.

Asked by Ankur Gulati

Client concentration, specifically regarding Coal India subsidiaries Direct

if we talk about Coal India because all our coal handling projects are with Coal India and their different associates and subsidiaries, then if you put all of them together, then definitely the concentration will be more than 20%. But if we talk about an individual contract, so out of the all individual contracts also, not a single contract comprises 20% of our overall order book.

Clarifies that while Coal India as a group is a large client, individual contracts and subsidiaries are diversified, mitigating concentration risk.

Asked by Amit Agicha

FY26 capex plans and funding Direct

In FY '26, there's one capex, which is definitely the acquisition of the Kuiper, which we have already informed. ... The capex amount which we'll be incurring this year on that particular project will be between INR40 crores to INR45 crores. ... we have secured a 5 years loan acquisition funding. So, part of the funding will be done through that acquisition financing, which we have secured for a tenure of 5 years and the part will be utilized our cash and bank balances.

Provides specific figures for planned capex and details on how the major acquisition and project capex will be funded, assuring financial stability.

Asked by Amit Agicha

Financial impact of Kuiper acquisition on Asian Energy's books, specifically depreciation Direct

we are acquiring the Kuiper on debt-free basis. And as we told you, the current assets which we will be getting with the Kuiper, which will be over and above what the acquisition price we will be paying. So, in our books, we do not see any depreciation will be coming of the Kuiper acquisition because there won't be any goodwill creation.

Clarifies that the acquisition structure (net assets > acquisition price) means no goodwill or additional depreciation will be recognized, which is a positive financial outcome.

Asked by Shaurya Yadav

3 min read 7 chapters

Detailed narrative

Strong FY25 Performance and Robust Q4 Growth

Asian Energy Services delivered a strong FY25, with revenue from operations reaching ₹465 crores, marking a 52% growth over FY24. EBITDA for the year stood at ₹72.3 crores, a 67% increase, with the EBITDA margin expanding to 15.5%. Q4 FY25 was particularly strong, recording the highest ever quarterly revenue of ₹215.4 crores, an 81% increase YoY and 135% sequentially, with a PAT margin of 10.5%.

Strategic Acquisition of Kuiper Group

The company announced the acquisition of a 100% stake in UAE-based Kuiper Group for $9.25 million in an all-cash transaction, expected to close by June 2025. Kuiper, a zero-debt company with approximately $68 million in revenues (CY24), will expand Asian Energy's integrated O&M capabilities and global presence, particularly in the Middle East. The acquisition is structured such that the net assets acquired exceed the purchase price, avoiding goodwill and additional depreciation on Asian's books.

FY26 Guidance and Segment Outlook

For FY26, excluding Kuiper, Asian Energy projects revenues between ₹650 crores and ₹700 crores, reflecting a 40-50% YoY growth. EBITDA is guided to rise to ₹110-120 crores (52-66% increase), with PAT expected at ₹70-75 crores (66-78% increase). The revenue split is anticipated to be roughly 50% from Infra and 50% from Oil & Gas. Management expects a recovery in the seismic segment, aiming to return to FY24 revenue levels of ₹120 crores.

Order Book and Tendering Activity

The current order book stands at ₹973 crores, covering 70-75% of the FY26 revenue guidance. While the Mineral segment experienced a slowdown in tendering activities over the last six months, management noted a recent pickup, with bids submitted for a large tender and three specific tenders eyed for the next 2-3 months. The company is optimistic about filling the remaining 30% of its FY26 order book from new inflows in CHP, seismic, and O&M segments.

Capital Structure and Liquidity

Asian Energy maintains a strong financial position, operating as a positive cash company with approximately ₹80 crores in net cash and bank balances (excluding short-term debt). The ₹157 crores raised through preferential warrants in FY25, of which ₹39 crores has been received, further strengthens its financial foundation, with ₹110 crores remaining undrawn. The Kuiper acquisition will be partly funded by a secured 5-year loan, and working capital needs are supported by existing bank limits.

Receivables Management and Q4 Margin Impact

Trade receivables increased from ₹135 crores to ₹224 crores in FY25, primarily due to heightened Q4 activities and ₹55 crores in retention money, which is expected to be released in FY26. Management clarified that ₹150 crores of debtors are less than 90 days, indicating robust collection. A temporary dip in Q4 Oil & Gas segment margins was attributed to cost escalation in one specific project due to execution delays, with discussions underway for recovery, expected to be completed in Q1 FY26.

Indrora Cluster Development and Client Concentration

The company has received environmental clearances for one field within the Indrora cluster and plans to commercialize it in FY26, with drilling activities planned. Clearances for the Cambay field are still pending. While Coal India, as a group, represents a significant client, management emphasized that individual contracts and subsidiaries are diversified, with no single contract or customer accounting for more than 20% of the overall order book or revenue, respectively.

This is an AI-generated summary of a publicly available earnings call transcript.

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