Deep Industries

Deep Industries reported robust financial results for Q3 FY26, with revenue increasing by 43.1% year-on-year to INR 221.5 crores. EBITDA grew by 46.3% to INR 110.1 crores, maintaining a healthy margin of 47.6%. Net profit for the quarter saw a significant rise of 49.8% year-on-year, reaching INR 71.3 crores, reflecting strong profitability and efficient cost control.

For the nine months ended December 31, 2025, the company's revenue from operations stood at INR 642 crores, marking a 57% year-on-year growth. EBITDA for the period was INR 318 crores, up 58% year-on-year, with an average EBITDA margin of 46.3%. Profit after tax for the nine months was INR 204.3 crores, reflecting a 59.7% year-on-year increase, underscoring consistent strong performance.

The PEC project at Rajahmundry progressed as planned, contributing approximately INR 20 crores in revenue this quarter and expected to reach INR 150 crores annually. A gas leakage incident occurred at the site, which was swiftly contained within 5 days without casualty. This incident is anticipated to cause a minor delay of 2-3 months in the incremental revenue ramp-up from this specific well, but the overall project with 40 wells remains on track and insured against losses.

The company's order book remains robust at INR 2,967 crores, providing strong multiyear revenue visibility. Management indicated a current bidding pipeline of approximately INR 800 crores, with a success rate of over 50% in some verticals. They expect good conversion of bids in Q4 FY26, potentially leading to higher order wins and a continuous flow of new contracts.

Deep Industries is actively expanding its services across its four verticals, including onshore drilling, workover services, gas processing, and production enhancement. The company is also evaluating new opportunities in carbon capture utilization and storage (CCUS) and biogas, aligning with India's growing energy needs and policy thrust towards energy independence. The focus is on disciplined execution and capital efficiency in these new areas.

The company generates handsome cash from its operations and maintains low debt levels, making it comfortable to fund regular capex (gas processing plants, rigs) and PEC capex through internal accruals and debt. The previously announced QIP process has been paused, as the company believes it can manage its growth plans without it, leveraging its strong cash generation and debt capacity and the opportunity to raise debt when required.

The company is seeing good demand for offshore support vessels, with its Dolphin asset contributing INR 30 crores in revenue and INR 13.5 crores in profitability this quarter, operating at 100% utilization. A rig expected for Q4 FY26 deployment is now anticipated in the first week of March, which will contribute incremental revenue. The Kandla Energy asset, acquired for INR 2 crores, is expected to start contributing from H2 FY27, primarily for its hydrocarbon fluids used in drilling processes.