Concall AI

Deep Industries Limited — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

Deep Industries delivered a strong Q3 FY26, with revenue up 43.1% YoY to INR 221.5 crores and PAT up 49.8% YoY to INR 71.3 crores, maintaining healthy EBITDA margins of 47.6%. The company's order book remains robust at INR 2,967 crores, providing multiyear revenue visibility. While a gas leakage incident at Rajahmundry caused a minor 2-3 month delay in PEC revenue ramp-up, it was swiftly contained without major financial impact, and the company continues to pursue growth opportunities across its four verticals.

Highlights

Revenue for Q3 FY26 grew by 43.1% year-on-year to INR 221.5 crores, demonstrating strong operational performance.
EBITDA for Q3 FY26 increased by 46.3% year-on-year to INR 110.1 crores, with a healthy EBITDA margin of 47.6%.
Net Profit for Q3 FY26 rose by 49.8% year-on-year to INR 71.3 crores, reflecting strong profitability.
The company's order book remains robust at INR 2,967 crores, ensuring multiyear revenue visibility.
A gas leakage incident at the Rajahmundry PEC site was swiftly contained within 5 days without any casualties or major financial losses, showcasing effective risk management.

Concerns

The gas leakage incident at the PEC project caused a minor delay of 2-3 months in the incremental revenue ramp-up from that specific well.
Dolphin segment experienced a one-off increase in operating expenses due to certain barge repairs required by the client.
The QIP process has been paused, indicating a change in the immediate capital raising strategy.

Key financials

2 periods

Q3 FY26

Revenue
₹221.5 Cr
YoY +43.1%
EBITDA
₹110.1 Cr
YoY +46.3%
EBITDA Margin
47.6%
Net Profit
₹71.3 Cr
YoY +49.8%

9M FY26

Revenue
₹642 Cr
YoY +57%
EBITDA
₹318 Cr
YoY +58%
PAT
₹204.3 Cr
YoY +59.7%

What they filed

Q1 FY27: revenue up 39.5%, net profit up 43.5% 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	131	155	167	200	221 +69%	222 +43%	249 +49%	279 +40%
Expenses	73	88	111	118	129	121	167	171
EBITDA	57	67	57	82	92 +61%	100 +49%	82 +44%	108 +32%
Margin	44%	43%	34%	41%	41%	45%	33%	39%
Other income	7	9	-245	13	21	10	-183	24
Interest	3	3	3	4	7	4	3	4
Depreciation	10	10	11	13	15	16	16	16
Profit before tax	51	62	-202	78	91 +78%	90 +45%	-120 +41%	112 +44%
Tax rate	19%	23%	2%	21%	22%	21%	-94%	20%
Net profit	42	48	-207	62	71 +69%	71 +48%	-7 +97%	89 +44%
EPS	6.00	6.81	-32.68	9.19	10.53	10.63	-2.24	13.34

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.

Capital allocation

high confidence

Capex Capex disclosed Regular capex for gas processing plants and rigs, as well as PEC capex, is funded through internal accruals and loans.

So, the regular capex of gas processing plants and rigs, we are being funded through internal accruals and loans. ... With regards to PEC capex also, we would be funding it through accruals and debt funding.
Debt Debt disclosed

Not really because we are generating some handsome cash from business, and we are very much comfortable on our debt levels as well. So we have a huge opportunity to raise debt as well as and when required. So largely we'll be able to manage without QIP.
M&A Kandla Energy Acquisition · Integrated · Consideration ₹[object Object] (undisclosed)

Interest was in acquiring hydrocarbon fluids for drilling processes.
INR 250 crores write-off last year, INR 208 crores doubtful receivables. Not expecting provisioning this financial year. Expected to start contributing from FY27, targeting second half.

So our interest in acquiring this particular company was largely the hydrocarbon fluids, which they use to manufacture in their good times. ... So as per original plan, it should start contributing from FY '27. ... We are targeting second half.
Liquidity Liquidity disclosed The company is generating handsome cash from its business and is comfortable with its debt levels, indicating sufficient liquidity for growth without the need for QIP.

Not really because we are generating some handsome cash from business, and we are very much comfortable on our debt levels as well. So we have a huge opportunity to raise debt as well as and when required. So largely we'll be able to manage without QIP.

Guidance & targets

Revenue

Revenue Growth Revenue · next financial year · High confidence >30-35%

So based on our existing order book, we are pretty confident that for next year also we would be having growth of more than 30%, 35%.

— Rohan Shah
Revenue Growth Revenue · year after next financial year · Medium confidence similar to next FY

And the similar growth we can expect next to next year as well, depending on the new orders which we are getting on a regular basis.

— Rohan Shah
PEC Project Annual Revenue Revenue · on a year basis · High confidence INR 150 crores

So our expectation from this particular project is around INR 150 crores on a year basis.

— Rohan Shah
Prabha DP2 Barge Revenue Revenue · current financial year · High confidence INR 100 crores

We are expecting around INR100 crores from that particular asset in current financial year as revenue.

— Rohan Shah

Legal

Arbitration Case Outcome Legal · next 3 to 6 months · Medium confidence order in 3-6 months

But best we anticipate that it should be in the next 3 to 6 months.

— Paras Savla

Asset Contribution

Kandla Asset Contribution Start Asset Contribution · FY27 · High confidence from FY27, targeting second half

So as per original plan, it should start contributing from FY '27. So we are working towards it. So in this particular financial year, we are not expecting anything out of that. ... We are targeting second half.

— Rohan Shah

What to watch in Q4 FY26

PEC project revenue ramp-up

next quarter / coming quarters

Current INR 20 crores in Q3 FY26, delayed by 2-3 months

Target Increased contribution, moving towards INR 150 crores annually

Why it matters

PEC is a new, high-potential project, and its ramp-up is key to future revenue growth.

contribution from PEC was somewhere around INR20 crores, which eventually would be ramping up over a period of time.

Risks & concerns

Gas leakage incident at Rajahmundry PEC site
medium

A gas leakage incident occurred at the Rajahmundry PEC site, leading to a 2-3 month delay in incremental revenue ramp-up from that specific well and the destruction of a rig, though insured.

During operations, there was a gas leakage incident, which was encountered at the site. ... there would be a little delay in the revenue ramp-up because of this, maybe around 2, 3 months delay in ramp-up of revenue. ... Rig has been destroyed. Certain portions of rigs have been destroyed. We have the necessary insurance for ensuring that our losses are recovered.

Management acknowledged

Q&A highlights

7 direct

Order book plateau and new orders from ONGC Direct

So regular tenders are being floated by various oil and gas producers, including ONGC. And we are regularly bidding those tenders related to our part of services. And I think for us, bidding tenders and getting orders on a regular basis is consistent over quarters. So, yes, it would be a continuous flow for us.

Addresses investor concern about order book growth and future revenue visibility from key clients, confirming a continuous flow of tenders.

Asked by Parth Agrawal

PEC project revenue contribution and ramp-up timeline Direct

So our expectation from this particular project is around INR 150 crores on a year basis.

Asked by Parth Agrawal

Impact of gas leakage incident on PEC project and revenue ramp-up Direct

So I would say there would be a little delay in the revenue ramp-up because of this, maybe around 2, 3 months delay in ramp-up of revenue. Other than that, we are not foreseeing any negative out of this.

Clarifies the operational and financial impact of a significant incident, reassuring investors about its containment and limited long-term effect.

Asked by Manan Shah

Kandla Energy acquisition rationale and financial implications (write-offs) Partial

So our interest in acquiring this particular company was largely the hydrocarbon fluids, which they use to manufacture in their good times. So those hydrocarbon fluids, we are using in our drilling processes, and that can be our, I would say, one of the major inputs while drilling wells.

Addresses a significant past event (acquisition with large write-offs) and clarifies the strategic intent behind it, even if the financial outcome was challenging.

Asked by Karn Bhargava

QIP status and impact on future growth/capex Direct

With regards to QIP, we have just paused that process as of now, and we are not going ahead with it. ... Not really because we are generating some handsome cash from business, and we are very much comfortable on our debt levels as well. So we have a huge opportunity to raise debt as well as and when required. So largely we'll be able to manage without QIP.

Provides clarity on a key capital raising plan and reassures investors that growth will not be hampered despite pausing the QIP.

Asked by Deepak

Impact of lower crude oil prices on the business Direct

So in our business, entire revenue is coming from services, which are more of support services to oil and gas sector. And these services are more of inevitable in kind of nature. And so it has very negligible or, I would say, least impact on crude oil price because whatever crude oil price would be, these services would be required.

Explains the company's business model resilience to commodity price volatility, a key sector risk.

Asked by Diwakar Rana

New opportunities, including CCUS and higher capacity rigs Direct

So our idea is to expand our services into each of these verticals, each of the capacities because with the process plant, we are running a few process plants. Our idea is to work on more of these such opportunities, which can help us expand not only the revenues, but also expand our profits. Likewise, we are also looking to get into a higher capacity rigs, which are the need of India today.

Highlights the company's strategic vision for diversification and growth into new, high-potential areas within the energy sector.

Asked by Sanjay Shah

India-US trade deal impact on capex (customs duty waiver) Direct

Yes, definitely. Though we can get the duty credit. But if duties would be reduced, it will definitely help us reducing our capex.

Identifies a potential positive external factor that could reduce future capital expenditure costs.

Asked by Shekhar

2 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

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.

Nine Months FY26 Performance

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.

Production Enhancement Contract (PEC) Performance and Incident

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.

Order Book and Revenue Visibility

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.

Strategic Growth and Diversification

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.

Capital Allocation and QIP Status

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.

Offshore Services and Asset Deployment

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.

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

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