Deep Industries wins order worth ₹1,402 crore from ONGC, doubling the company’s order book, shares rally 18%

Deep Industries reported that the contract is for the production enhancement operations in mature fields of Rajahmundry Asset of ONGC. The company reported that the order will span over 15 years. Deep Industries’ order book at the end of June 30, 2024, stood at ₹1,246 crore.

Paras Savla, managing director of Deep Industries, said the project will allow the company to extend its expertise in production enhancement contracts (PEC). The PEC frameworks will help the company boost revenue and profitability.

“Production Enhancement Contracts (PEC) are aimed at increasing the production of hydrocarbons from the aging, depleted and mature fields typically spanning around 15 years beyond the original life of the asset,” he said.

In August, the company had announced that it had received an order from ONGC worth ₹63 crore. The order was to hire services for a skid-mounted modular type gas separation system and gas compression units including operation and maintenance at Rokhia GCS Tripura Asset.

In Q1FY25, Deep Industries reported a 24.9% year-on-year (YoY) rise in net profit to ₹38.74 crore. The company’s consolidated income for the quarter came in higher by 21.9% to ₹123.45 crore.

The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter climbed 26.4% YoY to ₹61.43 crore. However, the EBITDA margin for the quarter declined to 45.7% from 46.4% in the corresponding period last year. Meanwhile, the net profit margin for the quarter saw a slight decline to 28.8% from 29% in the same period last year.

Shares of the company have risen by nearly 78% since the beginning of the year. The stock has gained over 73% in the past year.