The oil stock surged by 8% following the acquisition of a 100% stake in Indra Offshore Services.

The oil stock surged by 8% following the acquisition of a 100% stake in Indra Offshore Services.

oil stock surged: Deep Industries Limited, a prominent oil stock, specializes in providing Air & Gas Compression Services, Gas Dehydration Services, and Drilling and Workover Services. Recently, the company’s stock surged by 7.85 percent following its acquisition of a 100% stake in Indra Offshore Services for Vertical Integration.

In terms of price action, Deep Industries Limited boasts a market capitalization of Rs. 3,602.24 Crores. During the day’s trading session, the company’s shares experienced a significant increase, reaching a day’s high of Rs. 581.95 per share. The stock eventually closed at Rs. 562.85, marking a 4.32 percent increase from the previous closing price of Rs. 539.55 per share. Over the past year, the stock has delivered an impressive return of around 115 percent, outperforming the Nifty Index.

The spike in stock price can be attributed to Deep Industries’ acquisition of Indra Offshore Services Private Limited on January 15, 2025. Indra Offshore Services is involved in providing Air & Gas Compression Services, Gas Dehydration Services, and Drilling and Workover Services, as well as exploring conventional and unconventional natural gas.

The rationale behind the acquisition of Deep Industries and the Target Company lies in their shared focus on providing services in air and gas compression, drilling and workover, and gas dehydration. Both Deep and Indra companies operate in the same industry, and the proposed investment is expected to enhance operational efficiency and benefit Deep Industries in achieving vertical integration.

Guidance & Capex
Deep Industries has set a revenue target of approximately Rs. 800 crore by FY26. The company anticipates a significant increase in order inflow over the next 3 to 6 months, given the bidding pipeline of around Rs. 800 crore for traditional business. Capital expenditure will be pursued after securing orders from clients, with current Capex requirements driven by the recently received ONGC order.

About the Company
Deep Industries specializes in providing oil and gas field services, with a focus on natural gas drilling, compression, and project management. They are pioneers in offering high-pressure Natural Gas Compressors on a chartered hire basis in India.

As the largest private sector company in this segment in India, Deep Industries commands a market share of over 95 percent in Air & Gas Compression Services. The company’s order book currently stands at approximately Rs. 2,622 crore, with multiple orders secured from Oil and Natural Gas Corporation.

Financials & Ratios
Revenue from operations saw a year-on-year increase of 29.70 percent, rising from Rs. 101 Crores in Q2FY24 to Rs. 131 Crores in Q2FY25, resulting in profits climbing from Rs. 30 Crores to Rs. 42 Crores. Deep Industries classifies its operations under Oil and Gas Field Services as a sole segment as of September 2024.

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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.

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