SEAMEC Ltd

The global oil demand is projected to reach 103.9 million barrels per day in 2025, with the offshore drilling market expected to grow from US$36 billion in 2023 to over US$80 billion by 2033, representing an 8% compounded annual growth. India's 7,500-kilometer coastline and government initiatives like Maritime Vision 2030, Sagar Mala, and 100% FDI in critical energy subsectors position the country for significant growth in the oil and gas sector. Seamec is strategically diversifying into offshore support vessels and accommodation barges to capitalize on this booming environment.

SEAMEC Ltd reported robust financial performance for Q1 FY26. Consolidated revenue increased by 4% year-on-year to INR 231 crores, up from INR 223 crores in Q1 FY25. Consolidated EBITDA saw a substantial 45% year-on-year growth, reaching INR 117 crores compared to INR 81 crores in the previous year, driven by a favorable operational mix and charter hire. Consolidated Profit After Tax (PAT) surged by 52% to INR 76 crores from INR 50 crores in Q1 FY25, while stand-alone ROC and ROE stood at 11% and 10% respectively.

The company demonstrated strong operational execution with a 93% efficiency factor across its fleet. Seamec Princess successfully completed its project 18 days ahead of schedule, generating additional revenue. Seamec 2 completed its dry dock well before the planned September 30th timeline, expected to return to the field by September 10th, saving 20 days. The company is actively acquiring Nusantara, expected to complete in August and deploy by December 2025, and Seamec Anant, anticipated to finalize by October 2025, further enhancing operational flexibility and capacity.

The UK business is integral to Seamec's global operations, particularly targeting the North Sea market. The project associated with this investment is now expected to complete in another 12 to 15 months (from August 2025), a delay from the initial March 2025 projection, though the impact on cost is minimal. While the UK subsidiary is projected to become cash flow positive by FY27, its operating losses were curtailed to INR 28 crores last year from INR 66 crores in March 2024. Concurrently, Seamec is expanding its presence in the Middle East, having successfully deployed SWORDFISH with Saudi Aramco for two years, leveraging its competitive cost structure and 25 years of experience.

Concerns were raised regarding management fees, which are approximately 3-4% of sales. Management stated that these fees are well within market benchmarks. To ensure transparency and fairness, the company has appointed Grant Thornton to conduct a comprehensive related-party transaction review. The report is expected shortly, and management has committed to taking appropriate steps based on its recommendations, indicating a willingness to curtail fees if deemed necessary.

Seamec has formed a joint venture in GIFT City with Arete Shipping, primarily to leverage tax savings and expand into the bulk carrier business. This partnership is expected to yield returns of 15-16%, which is significantly higher than the 7-8% returns from treasury investments. Arete Shipping contributes valuable experience and contracts in the bulk carrier segment, aligning with Seamec's financial planning to optimize returns and diversify its business model.