Jindal Drilling And Industries Limited — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Jindal Drilling reported a strong Q2 FY26 with a 32% QoQ revenue increase and a 116% QoQ PAT increase to INR 121 crores, largely due to a one-time litigation settlement. Despite a 13% QoQ dip in EBITDA to INR 93 crores and a decline in operating margins to 39%, the company's net cash position significantly improved to INR 295 crores. Jindal Explorer is set for redeployment, and Jindal Pioneer is undergoing refurbishment, with a bid for an ONGC tender expected soon, aiming for improved day rates.

Highlights

  • Total revenue increased by 32% QoQ.

  • PAT increased by 116% QoQ to INR 121 crores, driven by a favorable litigation outcome.

  • EPS for Q2 FY26 was INR 42.

  • Net cash position improved to INR 295 crores from INR 111 crores in March 2025, indicating strong cash flows.

  • Jindal Explorer is in final stages of refurbishment and will be redeployed within 7-10 days, increasing operational capacity.

Concerns

  • EBITDA decreased by 13% QoQ to INR 93 crores.

  • Operating margins declined to 39% in Q2 FY26 from approximately 42% in Q1 FY26.

  • Jindal Pioneer's refurbishment is ongoing, with deployment expected by Q4 FY26, but a contract is not yet secured.

  • ONGC continues to issue fewer tenders than expected, leading to a competitive bidding environment.

Key financials

  1. EBITDA ₹93 Cr -13.1%QoQ
  2. PAT ₹121 Cr +116.1%QoQ
  3. EPS ₹42
  4. Operating Margin 39% -7.1%QoQ

What they filed

Q1 FY27: revenue up 8.3%, net profit down 7.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue172 239 245 254 238 +38%242 +1%263 +7%275 +8%
EBITDA31 81 87 107 93 +200%72 −11%78 −10%104 −3%
Net profit16 49 53 56 121 +656%-37 −176%32 −40%52 −7%
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
    • Rig refurbishment (per rig) ₹70 Cr
    • Rig refurbishment (per rig) ₹120 Cr
    • New capital deployment for directional drilling tender
    Kaushal Bengani: "we have to undertake refurbishment on each of these rigs at the end of every contract, which is an expenditure of INR70 crores to INR120 crores, depending on the condition of the rig."
  • Debt Debt disclosed
    Kaushal Bengani: "As a company, we do not believe in borrowing and, therefore, we want to conserve the cash so that we are able to utilize it, when it is required."
  • Liquidity Liquidity disclosed Net cash position improved to INR 295 crores from INR 111 crores in March 2025.
    Kaushal Bengani: "Slide 11 refers to the net cash position of the company, which has improved rapidly to INR 295 crores from the net cash position of INR 111 crores in March 2025."

Guidance & targets

Profitability

  • Operating Margins Profitability · next quarters · Medium confidence 35%
    We expect operating margins to be in the range of 35%.

    — Kaushal Bengani

Day Rate

  • Jindal Pioneer Day Rate Day Rate · upcoming tender · Medium confidence $65,000
    We -- our aim would be to come up to the 65 level.

    — Raghav Jindal

Contract

  • Jindal Explorer Contract Day Rate Contract · 3 years from November 2025 · High confidence $35,606
    Jindal Explorer has been recontracted at $35,606 per day, and the new contract is from November 2025 onwards. This is the day rate that will be in place for the next 3 years.

    — Kaushal Bengani

Deployment Timeline

  • Rig Refurbishment Duration Deployment Timeline · per rig · High confidence 4 to 6 months
    So once the contract ends, then it takes anywhere between 4 to months for the refurbishment to be completed.

    — Kaushal Bengani

  • Virtue-I Redeployment Deployment Timeline · after October 2026 contract end · High confidence end of April or early May 2027
    So in this particular case, it would be end of April or early May 2027.

    — Kaushal Bengani

What to watch in Q3 FY26

Jindal Explorer Redeployment

within 7-10 days (by end of November 2025)
Current In final stages of post refurbishment approval
Target Operating with ONGC

Why it matters

Successful redeployment will increase the number of operating rigs and contribute to revenue.

Jindal Explorer is currently in its final stages of post refurbishment approval and will be redeployed in another week to 10 days.

Risks & concerns

  • Competition and Day Rate Pressure

    medium

    High competition in tenders can force the company to accept lower day rates, as experienced with Jindal Explorer ($35,606/day vs. industry average of $80,000/day).

    Management acknowledged

  • Dependence on ONGC Tenders and Market Demand

    medium

    ONGC is issuing fewer tenders than expected, and the company's profitability is directly tied to increased oil and gas expenditure in India, which is currently in flux.

    Management acknowledged

  • Forex Fluctuation Impact

    low

    While currently mitigated by hedging and natural hedges (dollar-denominated income), significant dollar devaluation could still impact financials if not fully covered.

    Management acknowledged

Q&A highlights

7 direct
Jindal Explorer Day Rate & Future Contracts Direct
Jindal Explorer has been recontracted at $35,606 per day, and the new contract is from November 2025 onwards. This is the day rate that will be in place for the next 3 years. ... Our aim would be to come up to the 65 level.

Analyst questioned the low day rate for Jindal Explorer compared to industry averages, and management clarified it's a fixed contract while aiming for significantly higher rates for upcoming tenders like Jindal Pioneer.

Asked by Raman K.V.

Rig Valuation & NAV Direct
Rig Discovery-I was acquired in March 2019 for $75 million. Rig Jindal Supreme, was acquired for, I think, approximately $17 million in November 2021. And Rig Jindal Pioneer was again acquired for $75 million in March of 2025. ... the value of the current rigs that we have should increase with increased production over the world... Prices remain as what we are talking about in mid-70s to the 90s depending upon, again, the supply and demand.

Analyst sought clarity on the balance sheet valuation and potential market value of the rigs, which management addressed by providing acquisition costs and market outlook for rig values.

Asked by Faisal Zubair Hawa

Forex Fluctuation Impact Partial
Our income is all in dollars, so we hedged the dollars as well. So for us, gaining in dollars is a good thing since rupee is depreciating. ... 3 of our rigs are rented. Therefore, the income and rental is also in dollars. So there is a natural hedge and generally rupee has depreciated. ... We don't have that sensitivity analysis with us right now.

Analyst inquired about the impact of dollar devaluation on financials, and management explained their natural hedge and hedging strategy, but could not provide a quantitative sensitivity analysis.

Asked by Dinesh Kulkarni

ONGC Litigation Award & One-Time Income Direct
The award that we have received was on account of a favorable high court decision. That was a receivable from ONGC denominated in U.S. dollars, which was at INR66 crores in our books. Over the period of past 14, 15 years, that INR66 crores became INR166 crores. So the outcome of that was, when we won the case, then INR66 crores was booked as the receivable and the additional INR100 crores on account of forex fluctuation and interest was booked as other income.

Analyst sought clarification on the INR 100 crores income, and management detailed its origin as a one-time gain from a long-standing arbitration case, clarifying its impact on current quarter's profitability.

Asked by Manikanth

Operating Margin Outlook Direct
We expect operating margins to be in the range of 35%. ... The first was that one of our rigs, Jindal Explorer, it was not deployed for the entire quarter. And the second reason was that there was some effect of forex fluctuation, which was booked in other expenses.

Analyst noted the decline in operating margins from 42% to 39%, and management explained the reasons and provided guidance for future margins.

Asked by Manikanth

Jindal Pioneer Deployment & Day Rates Direct
Jindal Pioneer... We have a tender from ONGC coming out, which has already come out, and we expect to fill it and it is due in December first week. The rates, we would obviously try and get better rates. Our aim would be is where we bid last time around the 60s.

Analyst questioned the timeline and potential day rates for Jindal Pioneer, and management outlined the bidding strategy and target rates for the upcoming ONGC tender.

Asked by Manikanth

Cash Utilization & Acquisitions Direct
We've already doubled the dividend that we would normally pay out in the most recent financial year... we have to undertake refurbishment on each of these rigs at the end of every contract, which is an expenditure of INR70 crores to INR120 crores... we are looking at another opportunity. We've just won a tender in the directional drilling as well.

Analyst asked about the use of significant cash reserves, and management detailed their capital allocation strategy, including dividends, funding rig refurbishments, avoiding debt, and exploring new business segments.

Asked by Manikanth

Future Rig Acquisitions Direct
Nothing as of now. No.

Analyst inquired about plans for acquiring new rigs in FY27 or FY28, and management provided a clear, concise answer.

Asked by Nishita

2 min read 6 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

Jindal Drilling reported a robust Q2 FY26, with total revenue increasing by 32% quarter-on-quarter. Net Profit After Tax (PAT) saw a significant jump of 116% QoQ to INR 121 crores, translating to an EPS of INR 42. This sharp increase in profitability was primarily driven by a favorable outcome of a 15-year-old litigation, which resulted in INR 100 crores being booked as other income.

EBITDA and Operating Margin Dynamics

Despite the strong top-line and PAT growth, EBITDA for Q2 FY26 decreased by 13% QoQ, from INR 107 crores to INR 93 crores. Operating margins also saw a decline, moving from approximately 42% in Q1 FY26 to 39% in Q2 FY26. Management attributed this dip to the dehire of two rigs, Jindal Explorer and Jindal Pioneer, for refurbishment, as well as the impact of foreign exchange fluctuations.

Rig Operations & Deployment

Jindal Explorer is in the final stages of refurbishment and is expected to be redeployed with ONGC within 7-10 days, bringing the total operating rigs to five by the end of November 2025. Jindal Pioneer has also commenced its refurbishment, anticipated to conclude by Q4 FY26. The company plans to bid for an upcoming ONGC tender for four rigs in the first week of December, aiming for day rates in the mid-$60s, a significant improvement over the $35,606 rate secured for Jindal Explorer due to past competitive pressures.

Capital Allocation & Cash Position

The company's net cash position significantly improved to INR 295 crores in September 2025, up from INR 111 crores in March 2025. Management emphasized a strategy of conserving cash to fund future rig refurbishments, which typically cost INR 70-120 crores per rig, and to avoid external borrowing. They also noted doubling the dividend payout in the most recent financial year.

Strategic Expansion & Cash Utilization

Beyond rig refurbishment, Jindal Drilling is actively exploring new growth avenues. The company recently won a tender in directional drilling, which will involve deploying new capital. Management indicated ongoing evaluation of other sectors and areas within the drilling segment, though no concrete announcements were made regarding further acquisitions or new business lines.

Market Outlook & Competition

Management acknowledged that ONGC continues to issue fewer tenders than anticipated, creating a competitive domestic market. While the industry's current day rates are in the $70,000-$90,000 range, past competitive bidding forced Jindal Drilling to accept lower rates. The company is also evaluating opportunities with other operators and international players, where prices might be better but operating expenses are higher.

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

More Oil, Gas & Consumable Fuels earnings calls