Deep Industries Limited — Call Transcript 2025

May 8, 2025

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May 08, 2025

To, Corporate Relations Department BSE Limited

To,

Corporate Relations Department Corporate Relations Department BSE Limited National Stock Exchange of India Ltd. 2[nd] Floor, P.J. Towers, Exchange Plaza,Plot No. C/1, G-Block, Dalal Street, Bandra Kurla Complex, Bandra (E), Mumbai – 400 001 Mumbai – 400 051. SCRIP CODE : 543288 SYMBOL : DEEPINDS

Sub: Transcript of Earnings Call pertaining to Audited Financial Results for the Quarter and Financial Year ended on 31[st] March, 2025 held on 02[nd] May, 2025

Respected Sir/ Ma’am,

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed herewith the transcript of audio call recording of the Company’s Earning Call to discuss the Audited Financial Results (standalone and consolidated) for the Quarter and Financial Year ended on 31[st] March, 2025 held on 02[nd] May, 2025.

The Transcript will also be made available on the Company’s website at https://www.deepindustries.com/call-transcript.html.

Thanking you,

For, Deep Industries Limited

SHILPA Digitally signed by SHILPA SHARMA SHARMA Date: 2025.05.08 16:46:36 +05'30'

Shilpa Sharma Company Secretary & Compliance Officer M.No.: A34516

Encl: a/a

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“Deep Industries Limited Q4 FY '25 Earnings Conference Call” May 02, 2025

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MANAGEMENT: MR. PARAS SAVLA – CHAIRMAN AND MANAGING DIRECTOR – DEEP INDUSTRIES LIMITED MR. ROHAN SHAH – WHOLE TIME DIRECTOR (FINANCE) AND CHIEF FINANCIAL OFFICER – DEEP INDUSTRIES LIMITED

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Moderator:

Ladies and g entlemen, good day, and welcome to the Deep Industries L i mited Q4 FY '25 Earnings Co n ference Call, hosted by Adfactors PR. From the management, w e have Mr. Paras Savla, Chair m an and Managing Director; and Mr. Rohan Shah, Wh o le-Time Director (Finance) an d Chief Financial Officer, to take the discussion forward.

As a remind e r, all participant lines will be in the listen-only mode and there will be an opportunity f or you to ask questions after the presentation concludes. Should you need assistance du r ing this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded.

I now hand t h is conference over to Mr. Paras Savla from Deep Industries. T h ank you, and over to you, Sir.

Paras Savla:

Good evenin g , everyone. It gives me immense pleasure to speak to you all t o day as we present our fourth qu a rter and full year performance for the financial year 2025. Th a nk you very much for joining t h is call. Our quarter 4 and FY '25 results, press release and in v estor presentation are available on our website as well as on exchanges. I believe you all h a d a chance to go through it.

I am joined b y Mr. Rohan Shah, Director Finance and CFO, who will assis t me in answering your queries. After my brief, he will share the financial performance of the c ompany in detail, and we will t h en take your questions.

The Indian o il and gas sector is undergoing a transformative phase driv e n by progressive policy and g r owing demand. The Oilfields Amendment Bill passed in Lo k Sabha in March 2025 has re d efined the sector's trajectory. By expanding the definition o f mineral oils to include shal e gas and unconventional hydrocarbons, streamlining disp u te resolution and incentivize e n hanced oil recovery techniques, this legislation is unlocking new opportunities for explorati o n and production.

Complement i ng this, the 10th round of the Open Acreage Licensing Polic y launched during India Energy Week 2025 leverages AI-driven seismic data analysis to accel e rate the discovery of new reser v es. These reforms align with India's goal to expand its exploration area to 1 million squar e kilometers by 2030, signaling a robust push towards self-relia n ce.

At Deep Ind u stries, we are strategically positioned to thrive into this evolvi n g landscape. Our expertise in d rilling and workover services directly supports the nation's f o cus on EOR and unconventio n al hydrocarbons, the key pillars of the amendment bill.

As India ram p s up exploration, our capabilities will play a vital role in tap p ing into new and marginal fiel d s. Additionally, our proficiency in our value-added services l i ke charter hire of entire gas pr o cessing facilities and integrated project management aligns s e amlessly with the government's ambition to double natural gas production to 60 billion cubic m eters and enhance its share in th e energy mix.

In line with t h is vision, Deep Industries Limited through its group company, Dolphin Offshore Enterprise, h a s taken a significant step in expanding its offshore services. B e luga International

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DMCC, a w h olly-owned subsidiary of Dolphin Offshore, has entered i n to a 3-year lease agreement w i th Ballast Shipping, a Mexican company for the deployme n t of Prabha DP2 accommodation barge.

This strategi c move is poised to enhance Deep Industries’ global footpri n t in the offshore services sect o r, thereby leveraging the strong operational capabilities of it s group entities. It underscores o ur commitment to innovation and growth, positioning us to capitalize on emerging op p ortunities in the global energy market.

Our strategy i s clear; enhance operational efficiency, adopt cutting-edge tech n ologies and seize emerging op p ortunities. We are actively exploring production enhance m ent contracts and charter hirin g of entire gas processing facilities, segments poised to drive our growth in the coming year s . These initiatives not only bolster our services portfolio, but also contribute significantly t o India's energy security and economic development.

Looking ahe a d, Deep Industries is committed to leverage the supportive policy framework and favorable ma r ket conditions to deliver sustained value. With India's energy demand projected to grow fast e r than any major economy, reaching 11 million barrels per day by 2045 and natural gas c onsumption forecast to hit 550 million cubic meters per d ay by 2030, the opportunities are immense. We will continue to innovate, collaborate, a nd lead into the dynamic sect o r, ensuring that your company remains a cornerstone of India's energy future.

With this, I i n vite Rohan Shah to provide a detailed overview of the financ i al performance of quarter 4 an d FY '25. Following his remarks, we will be happy to address a ny questions you may have. T h ank you.

Rohan Shah:

Thank you, P arasbhai. Investor friends, thank you for joining the call toda y . Happy to share with you an o ther stellar quarterly and full year performance of Deep Indu s tries Limited. All the comparis o ns are on a year-on-year basis, which would provide fair evalu a tion.

We would li k e to inform that during fourth quarter, there was one-time loss of INR251 crores reported und e r exceptional items due to cleaning exercise post acquisition of Kandla Energy and Chemica l s Limited from liquidation and Dolphin Offshore Shipping Li m ited from CIRP. We have sho w n both amount with and without these exceptional items in pr o fit and loss and in investor pres e ntation.

For fair com p arison purpose, it would be worthwhile to consider PAT witho u t considering this exceptional i t em. Other details are on a consolidated basis as follows. Rev e nue from Q4 FY '25 rose to I N R167.2 crores, up by 39.7% year-on-year. For full year re v enue, operational revenues ju m ped by 35% to INR576.13 crores. The strong growth mom e ntum in top line comes from e xecution of our orders as well as consistent new order flows. T ight control over our costing a nd operational efficiencies have helped us post 27.4% year- o n-year growth in EBITDA to I NR62.5 crores in Q4 FY '25. For full year EBITDA, it has g r own by 35.3% to INR263.8 cr o res with EBITDA margin of 43%. We have been maintaining EBITDA margins in the range o f 41% to 44%, providing us a decent cash flow to strategize our future growth trajectory. N e t profit or PAT attributable to owners for the fourth quarter, e x cluding one-time

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exceptional loss, was at INR41.9 crores, up by 17.8% year-on-year. F o r full year, PAT attributable t o owners stood at INR161 crores, up by 31.6%. As on date, ou r order book stood at INR2,960 c rores.

We are happy t o inform that Board of Directors have recommended a final di v idend of INR3.05, that is 61% o n the face value of Rs. 5 per equity share, subject to approval of shareholders of the company a t the ensuing annual general meeting.

As we look a head to FY '26, Deep Industries is well positioned for a bri g ht and promising future. Build i ng on our strong performance in recent years, we are confide n t in our ability to maintain this positive trajectory. As Parasbhai said, our success is driven by a solid foundation of operation a l excellence, a sharp focus on cost optimization and a steadf a st commitment to innovation. T hese strengths enable us to seize new opportunities as they a rise in the energy sector.

With this, I n o w open the forum for question-and-answer. Thank you.

Moderator:

The first que s tion is from the line of Pankaj from Equirus Securities. Please g o ahead.

Pankaj: Yeah Hi. Th a nk you for this opportunity. So if I see the consolidated pe r formance and if I compare qua r ter-on-quarter, so like the margins of the company is in d e cline, so like the margins are i n a decline from around 43% to 34%. So like what is the reason behind it?

Rohan Shah: So on a qua r terly basis, as we consolidated newly acquired companies i n addition to their exceptional i t ems, there are certain other expenses also which were consolid a ted under Q4 and that is the re a son particularly for a drop in margin in Q4. If you look from y ear's perspective, full year pers p ective, they are in line.

Pankaj: So what is th e quantum of the expenses?

Rohan Shah: These are in t he range of around INR10 crores to INR11 crores for the quart e

Rohan Shah: These are on e -time, of course. So it would not be a recurring kind of… Pankaj: Okay. And o u r guided margin would be 40% to 43%?

Rohan Shah: Yeah. Pankaj: Got it.

Got it. And a lso talking about the Dolphin Offshore book. So like this C W IP of the Dolphin Offshore has reached to around INR222 crores. And I think in the last call, w e were discussing that the barg e renovation expense took around INR110 crores to INR120 c rores, maybe. So like what is t h e composition of the CWIP?

Rohan Shah: Yes. So in a d dition to refurbishment costs, we included the book value of b arge as well into CWIP. So pu t ting book value as well as refurbishment costs, it has reached t o this level.

Pankaj: So I'm sayin g like what is the life of this asset?

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Rohan Shah:	Yes, it would be almost 15 years.
Pankaj:	And also iny our notes, maybe like you have mentioned that one of the --l ike our subsidiary
	Beluga Intern ational has made an investment of around $2.2 million in H F Hunter. So like
	what kind ofi nvestment like are we looking into this company?
Rohan Shah:	Yeah. So that investment is for joint venture with HF Offshore. And under this JV, we have
	acquired one Anchor Handling Tug. So our stake in that investment wou ld be 37%. So it
	would be addi tion to our fleet for offshore services.
Pankaj:	Got it. Ando ne last question on exceptional loss. So like you have poste d around INR250
	crores of exce ptional loss. So like what exactly comprises this? Like you ha ve mentioned that
	was on accou nt of cleaning up. So like what exactly comprised of this cleani ng exercise? Does
	it comprise of asset write-down or liabilities provisioning or what?
Rohan Shah:	Yeah, it is p rimarily consisting of writing-off of inventory and receivabl es, which are not
	recoverable.
Pankaj:	Okay. So like whole of the write-off is non-cash in nature?
Rohan Shah:	Yeah, yeah.T hese are non-cash items. And it is just an accounting effect,w e'll have to take it
	in consolidati on.
Pankaj:	Do you havea ny update on INR108 crores of ONGC arbitration award?
Rohan Shah:	Yes. So that -- out of that INR108 crores, 75% we already have received. And ONGC had
	challenged th at arbitration into civil court where again, we got order in our favor. But ONGC
	has now appe aled to a higher court. And so we are waiting for higher court to get it cleared.
Pankaj:	Okay. And ju st one more question. Like you have mentioned that the Ka ndla Energy will
	result in back ward integration. So like what kind of margin benefit we can expect from this
	acquisition?
Rohan Shah:	Yeah. So sinc e many chemicals and fluids would be useful, so we believe in our operating
	margins, wec an have an improvement of more than 2% to 3%, at least on am inimum side.
Moderator:	The next ques tion is from the line of Viral Shah from Ambit Wealth.
Viral Shah:	Yeah hi, good evening Sir.
Paras Savla:	Good evening.
Viral Shah:	Sir, basically, a couple of questions. One, auditors have given opinion. So iti s pertaining to the
	newly acqui red entity right, Kandla and Dolphin, right, that is what...
Rohan Shah:	Correct.

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Viral Shah:	Could you ela borate more into this matter? What is it related to by auditors have given some
	opinion on to this on the receivables front.
Rohan Shah:	Since this acq uisition happened in only last day of the financial year, so we are in process of
	evaluating tha t receivables in full. So currently, as on 31st March, we belie ve that we should
	take all those receivables to next financial year because without evaluating an d finalizing on its
	recoverability , we should not take any action. So with regards to receivabl es for Kandla, we
	are continuing them.
Rohan Shah:	See, our acqu isition cost for taking Kandla is very miniscule against what we are getting as
	receivables in all other properties and experiences. So we would defin itely try to take
	maximum ben efit out of it.
Viral Shah:	Got it. So aso f now, when you look at this provisioning which we have done , so everything is
	done and dust ed or there is something more expected going forward?
Rohan Shah:	So as of now, whatever provisioning we have done, that was very clear from upfront like, this,
	whatever is re quired, we have already provided. And with regards to this oth er provisions, we
	will take the decision based on our evaluation, and we believe that majorit y of them can be
	recovered.
Viral Shah:	No, no. So ag reed. So as of now, we have made the entire provisioning or th ere is some more
	expectationw hich can come in, whatever the assessment which you want toc ontinue?
Rohan Shah:	So as on date, whatever was required, we have done entire provision.
Viral Shah:	And for both the thing, right, Dolphin and -- so Dolphin there can ben o more surprises,
	Kandla there can be some expected. Is the understanding correct or no?
Rohan Shah:	Yeah, yeah.S o I think for both of these companies, whatever was required,w e have provided.
	So surprises, I'm not sure for any of them would be there. But yeah, at the end of day, it's an
	acquisition. S o post evaluation only.
Viral Shah:	And you didm ention that there are INR11 crores or INR12 crores of extra ex penses. So if you
	add them back , you are at the same margins of last quarter, right? Is the under standing correct?
Rohan Shah:	Correct.
Viral Shah:	Ok got it so...
Rohan Shah:	See, at the en d of day, acquisition cost for acquiring both this company p ut together is just
	INR9 crores for us. And so against INR9 crores, these two companies wit h their properties,
	their receivab les and their experiences with their assets is coming in. So we believe these two
	can give us a great amount of push going forward.
Viral Shah:	Got it got it.U nderstood, Rohanbhai. So lastly, two more questions from my end. One, what is
	the update on this product enhancement contract? Where are we, ONGC?

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Rohan Shah: In productio n enhancement contracts, we have taken over the charge on the field in first week of April. An d we have started doing groundwork there. So we have -- this en t ire field is now in our control. A nd baseline production, we are continuing with baseline pr o duction. And we have started a pplying our efforts for increasing production. So as we have s aid before, it will take 5 to 6 m onths to reach to the incremental production level. So we are q uite poised to get incremental p roduction by H2. Viral Shah: That was rea l ly nice. Lastly, Parasbhai was mentioning on the new oppor t unities, which are expected. Co u ld you throw some more light onto this space per se? What i s the bid pipeline expected? A n d are we bidding for new tenders and such tenders going forwa r d? Paras Savla: We have me n tioned that the 10th round of OALP is already there, one more round of DSF4 is already out. S o likewise, and many such PECs are also -- are not out, they a r e supposed to get out very soo n . So we see in front of us a lot of opportunities in various biddi n g rounds. So that is the biggest hope we have, as we go forward. The government is also quite excited to be selfreliant and w ant the Indian producers to produce more oil and gas. So ah e ad of us, we feel there are im m ense opportunities in the sector. Viral Shah: Got it, Paras b hai. But in terms of numbers, can we quantify something wh i ch can be coming for this first h alf? Is there something possibility in first half or second half...? Paras Savla: I think there i s -- Rohan said -- from second quarter onwards, you may ha v e -- you may see some numbe r s coming up in a big way with these PECs and all. And as we go forward, these numbers will definitely be reflected to what our expectations are. Viral Shah: Got it got i t .. So, lastly, Rohan Bhai, apart from this exceptional ite m , which we have recovered w h ere we have booked around INR251 crores, is there a possibil i ty that something can be revers e d positively as well going forward? Rohan Shah: Something c a n be? Sorry. Viral Shah: Reverse posi t ively. This is a negative part of it, but can we reverse the positive part of it as well, somethi n g which can be recovered from the... Rohan Shah: No. Not fro m these two targets. Viral Shah: Not from...Got it ....done. Moderator: The next que s tion is from the line of Sudhir Bheda from Bheda Family Offic e . Sudhir Bheda: Yeah good a ft ernoon sir and thank you. congratulations for the good operati o nal numbers. Paras Savla: Thank you. Sudhir Bheda: Sir, my quest i on is, first, with the new opportunity and new avenues of segm e nt coming up this year as far a s revenues are concerned, like production enhancement and t h en Dolphin barge and as you m entioned, other opportunity in the second half and this acq u isition, the recent

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acquisition o f Kandla. So what kind of revenue growth do you see in this c ur rent year, of '2526? And of c o urse, profitability, what is your guidance for this year, current y ear?

Paras Savla:

So our expec t ations with the kind of order book that we have, we are very, v e ry confident. And on a very co n servative side, we expect a minimum growth year-on-year of 2 5 % or maybe even 30%. And o u r profits would always -- should be in line with what our curr e nt numbers are in the same rati o s as we go forward to 20% to 30%.

Sudhir Bheda:

Great. And sir, as I look at the consol balance sheet, so your receivable num b ers have doubled from INR27 6 crores to INR588 crores. I believe that is a receivable of tha t recently acquired Kandla Che m icals.

Rohan Shah: Correct. So w e have categorically given note for these receivables. So as y o u rightly said, the number is pri m arily because of the receivables of these two targets which we have acquired. Sudhir Bheda: Okay. And si r , now we have to take INR250 crores hit and we have spent, I think, only INR9 crores on tho s e acquisitions. Of course, you have explained, but can you ela b orate the rationale behind acqui r ing these two companies and taking the heat on the balance s heet? So whether the networth of the main Deep Industries will be affected? How this enti r e transaction was done, actuall y ? Rohan Shah: No. So even a fter taking this onetime loss, net worth of Deep is positively affected only. So it has increased only. So even after this hit, net worth of Deep is not affected n e gatively. Second, the primary r a tionale for acquiring these two targets is more related to busi n ess expansion. So with regards to Kandla Energy & Chemicals, they were into manufacturing of various hydrocarbon fluids and chemicals. And as you are aware that in our integrated project management a nd under production enhancement contract, we are consum i ng so many such chemicals an d hydrocarbon fluids. So by acquiring this, this can be a go o d opportunity of backward int e gration by which our operating margins, we have an opportun i ty to improve our operating margins significantly. So primarily, that was the reason for acquiri n g Kandla. And with reg a rds to Dolphin Shipping, they are already having a few tugs r u nning already into Indian Oceans. And by that acquisition, we can immediately increase our fl e et in our offshore services. Moderator: The next que s tion is from the line of Raman KV from Sequent Investments. Raman KV: I want to un d erstand working capital cycle and as well as the receivables w ith respect to the company. So my understanding is INR363 crores of receivable is of the co m pany adjusted for the recent ac q uisition, right? Rohan Shah: Correct. Raman KV: And how mu c h of this is like within 90 days and after 90 days, like... Rohan Shah: These receiv a bles are old receivables of old management. So we have rec e ived this with our acquisition o f these companies with miniscule costs.

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Raman KV: No, no. I'm talking about the company level receivables, okay, INR36 3 crores of Deep Industries re c eivables, how much of this -- what percentage or percent of this receivable is 90 days? Rohan Shah: So if you re m ove that INR363 crores, then balance receivables are my regul a r receivables from Deep and ot h er subsidiaries. And majority of them would be 90 days. I wo u ld say more than 70% to 80% w ould be 90 days and balance would be more than 90 days. Raman KV: Okay. And si r , my question on the write-offs part, sir, you did say the write-off is with respect to the invent o ry and receivables and it's like a non-cash items. So are we -- w ith respect to the receivables f r ont, are we expecting this INR208 crores of receivables in th e coming years in FY '26? Or is it like you have totally written-off the INR208 crores of the re c eivable? Rohan Shah: No. So we h a ve kept those receivables outstanding because evaluation is g o ing on. And since we have recently acquired and taken control over the company, so a l l documents and supporting w e are going it through. And we are quite hopeful to recover out of this receivables as well. Raman KV: Okay. And si r , my last question is with respect to the Dolphin Offshore reve n ue. We have seen that -- Dolph i n offshore in Q4 did around INR20 crores of revenue, can we expect in FY '25, the Dolphin O ffshore revenue to be around INR120 crores? Rohan Shah: FY '26, we a r e expecting revenue of almost INR100 crores, for sure. we c a n book more than this if we wil l add a few more projects in Dolphin. But as on date, we are f o r sure for INR100 crores. Raman KV: Okay. Thank you so much. Moderator: Thank you. T he next question is from the line of Mr. Balasubramanian fro m Arihant Capital. Please go ah e ad. Balasubramanian: Good evenin g Sir. Thank you so much for the opportunity. Sir, my first q uestion regarding right now, th e oil prices are hovering around $60 per barrel. Generally, if oil prices goes below $60, it's ver y difficult for like oil exploring companies to make mone y . I just want to understand a t the scenario, is there any slowdown of getting new contrac t s or execution of current contr a cts? I understand w e have around nearly INR2,900 crores kind of order book at this point of time. And how mu c h is from short-term and long-term contracts, is there any execution of this? And is there any d e lay getting in new contracts? This is my first question, sir. Paras Savla: Okay. As far as the sentiment goes, as I had mentioned earlier, there is a lot of excitement into the sector. S o the theory goes that even -- see Government of India larg e ly companies like ONGC or Oi l India, they have a mandate to keep producing oil and gas i rrespective of the prices going w ay low or bit high because their endeavor is always to produc e oil.

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Now 20, 30 y ears, we have seen that the drilling activities as far as the PS U s are concerned, they have be e n following a very strong mandate of energy sufficiency. So in all these years, we have seen that this is -- the scenario has not much impacted to the PSUs.

And as we g o ahead with the private sector, I think when the crude oil price s , assumingly they go low, it giv e s a great opportunity for them to do a capex because wheneve r the prices have to go up they would be still able to get all the services and everything and ot h er costs at a very reasonable ra t e. It is nothing more than a deferred capex. Those who have a n understanding of this diploma t ic understanding, they would definitely keep going and w e keep doing this investments.

Thirdly, our c ontracts are of a fixed-price nature assuming that we have a co n tract for the three years, the pri c es may go, it does not have any impact on commitments and o ur services. They are fixed for that period. And therefore, we are not impacted on the crude oil prices, even if they have to go low or even if they have to go high. But we believe th a t in either of the conditions w e have seen in all these years, our businesses have not been i m pacted because of any of these c hanges.

Balasubramanian: Got it Sir. Sir, my second question regarding capex of INR500 crores for this year, for this capex? And w e're also planning for QIP and when we are going to close for that?

Rohan Shah:

See primaril y , we would be doing capex of INR500 crores, of which more t h an INR350 crores would be for equipment. We would be adding a few more rigs and other pro c essing equipment in this financ i al year. And we are also evaluating a few opportunities of acq u isition as well. So all put toget h er, INR500 crores is our plan for this financial year. But havi n g said so, we are quite comfor t able on our liquidity position. So we would definitely look f o r good time to go ahead with Q I P.

Moderator: Thank you. T he next question is from the line of Nirvana Laha from B a drinath Holdings. Please go ah e ad.

Nirvana Laha: Hi. Thanks f o r the opportunity. Sir, my question is regarding the DP2 Barge so the contract that Dolphi n Enterprises -- Dolphin Offshore declared, it said that the contract is worth INR281 cror e s of net of opex over three years. So sir, does that mean if I divide it by 3, that comes to ar o und INR94 crores. So does that mean that from this cont r act, the EBITDA recognized b y Dolphin Offshore would be around INR94 crores? Because i t says net of opex. So is that un d erstanding correct?

Rohan Shah: Yes. So you h ave rightly understood it. So since it is net of opex, almost the revenue would be EBITDA. I w ould say almost, but yes.

Nirvana Laha: Got it. And sir, what will be the estimated cost below EBITDA in ter m s of interest and depreciation?

Rohan Shah:

Depreciation, interest cost and administrative costs would be there.

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Nirvana Laha: Any idea on quantification there, sir, I'm just trying to see how much th a t flow through to PBT?

Rohan Shah: Would be a l i ttle early to say, but would not be much. So percentage -- it w ill be difficult to quantify as o f now. Nirvana Laha: Okay. And s i r, how much losses are left to be set off in Dolphin Offshore a s a whole for tax purposes? Rohan Shah: So Dolphin O ffshore India has more than INR100 crores carry forward los s , but this revenue would be bo o ked in Dubai. So there, we will have a tax of 9%. Nirvana Laha: Okay. And si r , for this regarding this exceptional item loss, so can you clarif y something? So if I look at H1 c onsol equity for Deep Industries, that is around INR1,500 cror e s. And FY '25 and consol equit y is around INR1,820 crores even after this write-off. So if I ju s t subtract the two numbers that INR320 crores plus INR250 crores, so is it correct that by pa y ing INR9 crores, what we act u ally initially added for our book value of equity was around INR500 crores or INR550 cror e s. And from there, we have taken INR250 crores write-off to a r rive at the present balance sheet. Is that right? Rohan Shah: Correct. It is m ore or less what you are saying is right. Nirvana Laha: Okay. Last q uestion, sir, in Kandla Energy, Dolphin Shipping you said t h at there are some tugs, which a re operating. Those are the operating assets. In Kandla Ene r gy, I missed that commentary, what are the kind of operating assets that we have gotten from t his acquisition? Rohan Shah: So they have factory land and machinery. So we'll just have to revive that machineries and we'll have to s tart working on it. Nirvana Laha: Okay. And y o ur earlier guidance, sir, of 40% revenue growth for FY '25 a nd maintaining or improving E B ITDA that holds even after this write-off and then you're co m ing to terms with these acquisi t ions, there are no changes in those kind of guidance? Rohan Shah: Yeah, yeah, t h at guidance will continue to be hold because based on our e x isting order book, we will defi n itely be growing on -- See, if you see on operational reven u e front, we have grown this y e ar 35% and that is what exactly we were envisaging. And for F Y '26, also, we are envisaging growth of more than 30%-or-so. So that growth will continue to b e there. Nirvana Laha: Okay. Alrigh t Sir. All the best, thank you. Moderator: Thank you. T he next question is from the line of Deepak Poddar from Sapp h ire Capital. Please go ahead. Deepak Poddar: Sir, on this P rabha that expected to generate additional revenue from first quarter, right? So what is the q u antum, I mean, per quarter, this can add to your revenue from q uarter...

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Rohan Shah:	It is primarily $30,000 a day. So proportionately we'll definitely have reve nue starting from
	Q1. So we are expecting more than almost 55 to 60 days revenue from Q1 an d then definitely.
	So in this con tract on a yearly basis, you will have a revenue of more than 33 0 days.
Deepak Poddar:	Correct. 330d ays yearly revenue at $30,000 per day?
Rohan Shah:	Correct.
Deepak Poddar:	Okay. So giv en this kicker in your revenue, I mean, do you also expect a quarter-on-quarter
	revenue wills ee improvement from fourth quarter to first quarter?
Rohan Shah:	Yeah. Of cou rse. So quarter-on-quarter, growth would definitely be there be cause the revenue
	from bargew as not there in last Q4. So it would definitely be added . And from Q2 end or
	from Q3 start ing will have additional revenue from production enhancement as well. So Q-on-
	Q growth isa lso quite visible.
Deepak Poddar:	Quite possible , right, on Q-on-Q? Because this first quarter, you will havea benefit of Prabha
	2. And froms econd quarter onwards, you will have a production enhancem ent benefit, right?
	And what wou ld the production enhancement additional revenue that can kick er in?
Rohan Shah:	So our prima ry estimate says that in H2, we can have a revenue of around INR65 crores to
	INR70 crores from production enhancement.
Deepak Poddar:	In H2, that is about INR35 crores to INR40 crores per quarter.
Rohan Shah:	Correct.
Deepak Poddar:	Okay. So sir, in second quarter also, you expect a similar jump. I mean that's where your
	kicker will sta rt, right?
Rohan Shah:	No. So our ex pectation is it will take Q3, but we are trying, if we can get som e revenue in end
	of Q2.
Moderator:	The next ques tion is from the line of Rajesh Jain from R&K Capital.
Rajesh Jain:	Good evening . You mentioned that you are expecting an increase in opera ting margins as a
	result of thea cquisition of Kandla Energy. So how much increase you are exp ecting? And then
	if you're expe cting an increase in the margin, so then the PAT growth must be more than the
	revenue grow th of 25%, 30%, right?
Rohan Shah:	Yeah. So PA T will definitely improve in line with incremental operating margins, and that
	would definite ly be reflecting in PAT as well.
Rajesh Jain:	But how much improvement you are expecting in the operating margins, how many bps?
Rohan Shah:	I just expect that it should improve more than 2% from first year and then probably we can
	improve furth er too.

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Rajesh Jain: Okay. So yo u 're expecting a 2% increase in FY '26 in the operating margins a t a consol level?

Rohan Shah: Correct. Rajesh Jain: And sir, how much tax rate should we estimate for FY '26, blended tax rate f o r the full year? Rohan Shah: See, tax rate f or my overseas revenue from Dolphin would be 9% and my e n tire India business would be 25 % . Rajesh Jain: Okay. Fine. A nd sir, like what is the bid pipeline now? Rohan Shah: The bidding pipeline as of now is somewhere around INR550 crores-o r -so. And we are expecting -- i n fact, we are bidding almost every month, we are bidding 1 or 2 projects. So this bidding pipel i ne would continue to be there or will be growing. Rajesh Jain: Sir, the orde r book that you mentioned, INR2,960 crores, that is executab l e over how much duration? An d in particular, how much order book is executable over FY '26 and FY '27? Rohan Shah: So out of IN R 2,960 crores of order book, INR1,400 crores is executable o v er a period of 10 years. And b a lance, you can consider 2.5 to 3 years. Moderator: The next que s tion is from the line of Manan Shah from Moneybee Investme n t Advisors. Manan Shah: Yeah hi. Th a nks for the opportunity. Regarding these two acquisitions, ar e we carrying any liabilities als o in these or the liabilities have been written-off? Rohan Shah: No, since on e acquisition is from CIRP and another is from liquidation, so all liabilities have been cleaned off. So it's a clean-slate. Manan Shah: Understood. A nd this Kandla, which we acquired, was that an operational a s set or since when has that asset not been operating? So I mean, I don't think we will be able to straight away start manufacturin g from that asset, right? We'll have to invest something into th a t -- into the plant and machin e ry to revive that asset or it is an asset that we can i mmediately start commercialising? Rohan Shah: No. So you a re right. So they were non-operational for, I think, more than 2.5 to 3 years. So we'll not be a ble to immediately start them. But yeah, we'll have to do so m e work on it, but that would n o t be much. Manan Shah: Okay, unders t ood. So but, I mean, this asset is capable of then generating w h at sort of revenue or what sort o f capacities does this asset is capable of? Rohan Shah: See, primaril y , our focus is to first, try to take benefit out of backward integration. So in addition to b a ckward integration, whatever market we would be doing is still under evaluation. Manan Shah: Okay. And t h e receivables that are there for Kandla, what type of com p anies are these, I mean...

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Rohan Shah: They are larg e ly Indian companies. Manan Shah: Indian comp a nies only. Okay, who would have a similar profile like us? Rohan Shah: Yeah, would b e many like whoever is consuming chemicals and fuels. Manan Shah: But these che m icals, you mentioned primarily get consumed in processing o f gas, right? Rohan Shah: Yes. So they h ad a variety of chemicals. A few of them are primarily for our kind of business. Manan Shah: Okay. Understood. Moderator: Our next que s tion is from the line of Parin Gala from Mavira AMC. Parin Gala: Sir, my quest i on was relating to the accumulated losses of the acquired entit i es. Sorry, if that's a repeat question. But what I understood is Dolphin has a INR100 cr o re carry forward accumulated l oss. Is that correct? Rohan Shah: Correct. Dol p hin Offshore Enterprise has this accumulated loss in income ta x , yes. Parin Gala: Okay and ho w about the second acquisition of Kandla? Rohan Shah: No, they do n ot have much accumulated loss. That's in few lakhs. Parin Gala: Okay. Sir, se c ond question is regarding the Dolphin. So from the existing - - you said that we are expecting a minimum of INR100 crores of revenue in FY '26. So this is in addition to the existing, so w e already have that in operation, right? So is any spillover fr o m the current FY '25 going int o '26, plus we are expecting INR100 crores or INR100 crores is o ld plus new? Rohan Shah: Yes. So som e spillover from '25 and then balances, it would be like from t his barge. And of course, we w ould be getting profit from our joint venture as well, where w e are having that anchor handl i ng tug. So since it is a JV with 37% stake, it would not come under line-to-line consolidation, but it would have a contribution at profit level. Parin Gala: Okay. Okay. S ure. Thank you Sir. Moderator: The next que s tion is from the line of Vimox Shah from Goyam Labdhi Finte c h. Vimox Shah: Thank you f o r the opportunity. Yes. Congratulations for the good set of nu m bers. So most of the question s were answered earlier, so I have just one question, sir. C ould you please elaborate on t he nature of capex required for these PECs over the next few y ears? And how it aligns with t h e overall FY '26 capex plan? Rohan Shah: So capex for PEC would largely be in laying in connecting wells as well a s for drilling few wells, Largel y , that would be the capex. And other than that would be o pex. So whatever capex we ha v e planned, we have considered PEC full capex in that as well.

Vimox Shah: Okay. Got it. T h ank you

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Moderator: The next que s tion is from the line of Ankur Sawariya, an individual investor.

Ankur Sawariya: Good evenin g all. Congratulations on a good set of numbers. Most of m y questions was answered. O n e question is regarding the QIP. Since you have spoken a b out the QIP, our performance h as already gotten better, but the valuation of our company has come down. So is there a ballpa r k figure which you think below which you will not take the QI P ? Rohan Shah: See, direct b a llpark figure is something difficult to quantify. But definite l y, in this type of market, we w ould not do it because we are quite comfortable on liquidity fr o nt. And so for us, it is not some t hing that we want fund immediately. So we can definitely wait for a good time. Paras Savla: And also, we are not very panic about the situation. Ankur Sawariya: Yeah. But do you also have a last date before which we have to complete th e QIP? Rohan Shah: No, no. So th a t approval lasts for 1 year. Ankur Sawariya: Yeah. So is it possible that if in case you do not get your desired valuation, y o u can also forego the QIP, is th a t possible, sir? Rohan Shah: So currently, what we believe is that we'll have to wait for a few months . That is what we believe. Othe r wise, other than that, we have not thought of. Ankur Sawariya: And one thin g more, sir, regarding your exceptional losses that you have se e n in your balance sheet. It is -- a s I understand, it is not a cash loss, but a book accounting loss. But whatever you have kept as r eceivable can, in future, they also become an exceptional los s in future balance sheet? Rohan Shah: Yeah. So it's a little early to see on it because we are evaluating their reco v erability. And so out of that to t al receivables, there can be a possibility that we cannot recov e r all. So there can be a possibili t y. Ankur Sawariya: Yes. And wo u ld that help us in future to reduce our taxes? Rohan Shah: Taxes, I wou l d say since it is under consolidation, so it is not a tax benefit a s a whole. But yes, for that parti c ular company tax benefit is there. Moderator: The next que s tion is from the line of Amit Kumar, an individual investor. Amit Kumar: Thank you f o r the opportunity. Sir, as per my understanding, I can underst a nd that we have a cash outflow of INR9 crores by acquiring Kandla Chemicals and Dolphin a nd INR251 crores of onetime lo s s hitting Q4. So how -- what benefits we are going to get in te r ms of top line and bottom line i n next maybe 2 to 3 years? Rohan Shah: See, as we a r e discussing on this Kandla, it has a receivables of more th a n INR200 crores, where which we are evaluating to recover what best we can do out of it . Secondly, as we speak, we ar e working on backward integration and benefit out of it, which are quite a decent benefit whic h we are foreseeing with improvement in our operating margi n s. So in terms of

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value or perc e ntage, it is difficult to quantify, but it would definitely be qui t e a big than what we have paid .

Amit Kumar: Okay. Thats t h e only question. Thank you. Rohan Shah: Thank you. Moderator: The next que s tion is from the line of Pujan an Individual Investor. Pujan: Yeah hi, Tha n k you. All of my questions are answered. If you can answer, w hat is the value of land in Kand l a acquisition? Rohan Shah: So land is ha v ing value of around INR1.5 crores to INR1.75 crores. Pujan: Okay. So not much material? Rohan Shah: Yeah. Pujan: And also, c a n you elaborate on this INR251 crores tax loss -- sorry, I NR251 crores of exceptional l o ss, was it forecasted when we acquired this entity? Rohan Shah: Sorry? Pujan: Was this loss forecasted when we acquired this entity? Rohan Shah: No. So they h ad inventory on books and we were of the impression that w e could be able to recover a fe w of it -- but when we've taken a control, we found that it's e n tirely needs to be written off. S o loss was forecasted, but not that full. But as you are aware that we have just paid INR2 cr o res for acquiring Kandla. So monetary-wise it is not at all affe c ting us. Pujan: Thank you all o f my other questions were already answered regarding the loss. Rohan Shah: Thank you. Moderator: The next que s tion is from the line of Srikar Sai, an individual investor. Srikar Sai: So sir, its reg a rding offshore supply vessels. So does Dolphin Shipping actu a lly have like latest anchor handl i ng tugs or platform supply vessels or are they age 1970s or 1980s? Because if you see the p revious their annual reports, we could see them as 1975 or 1980 like Kamrup, Ganga, Dolp h in all of this. And most of them are actually sold off. So how many are actually operational a n d ready to even go for dry docking? Or are we trying to b ring second-hand anchor handl i ng tugs of platforms supply vessels? Rohan Shah: Yeah. So the vessels you named, they are sold, they are liquidated. So t h e tugs, which are available are small tugs and they are currently running, but the vessels whic h are liquidated or auctioned th e re also, we have a possibility of getting money because thos e money are lying with court -- m aritime court, where you can have your claim in that amount a s well.

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Srikar Sai: Okay. Sir, ju s t one off-topic question. It's regarding the latest offshore jack- u p rig race. So they said that the b idders were like offering for like $35,000, $45,000, so is it ac t ually affecting the offshore seg m ent like the entire segment or if that's a technical blip? Are t here any signs of stress becaus e of crude oil going down and bidding rates going down? Is t here any negative impact, sir, o n offshore? Rohan Shah: In offshore d r illing, the market is global and offshore drilling rates be jac k -up or be it semisubmersible. These rates are largely directly linked with crude oil price bec a use the market is global and al l global players are competing with each other. And that is the p rimary reason we are not focus i ng on those offshore drilling equipment. Srikar Sai: And one last q uestion regarding the traditional services, sir. So this particul a r INR2,960 crores order book, I think it also comprises the Dolphin's INR284 crores order or is it excluding INR284 cror e s? Rohan Shah: Yes, it is incl u sive of INR281 crores of Dolphin. Srikar Sai: Since last 1 t o 2 months, we have in time like last 2 to 3 months, we hav e n't had any major contracts get t ing awarded. So are we waiting any tender getting awarded, s ir or is there any pricing comp e tition or something like that? Rohan Shah: If you'll see o ur traditional service contracts are not that big. So they are - - in numbers, they are so many, but individual contracts are having value, which is not that si g nificant. So that's how our traditional services business operates. And those small contracts, w e are getting often. So generally w e tend to announce the contracts which are material in nature i n terms of value. Srikar Sai: Okay. Got it, sir. Thank you. All the very best and that’s it from my side. Rohan Shah: Thank you. Moderator: Thank you. T he next question is from the line of Rajesh Jain from R&K C apital. Please go ahead. Rajesh Jain: Thanks for t h e follow up. Sir, can you give more details on the production enhancement contract, wh a t is your success rate, how confident you are on the success and how are you going to enh a nce the production and what is the risk that this contract ca n be terminated if there are no s i gnificant enhancements in production? Paras Savla: We have don e the basic reservoir understanding, geology or understanding. A nd we are of the view that we definitely have to do some amount of work which are related t o either work over or doing air i n jection and continuing on doing various services to enhance t he production. To our understa n ding and with our data, we are very, very confident that we w ould be definitely able to enha n ce the production. So now there are two things that we are g o ing to do one, we are going to e nhance the production from the existing wells that have been d r illed.

Secondly, m a ybe a year down the line our plan is that we would be drilling new wells and we already have t he data, we have the understanding that what kind of producti o n could be hit. So

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all net debt p ut together, we are very, very confident that – see we have b e en operating into this field for t he last more than 15 years, I would say. And we have a reason a ble idea about the geology arou n d these fields.

So the produ c tion, we have seen some of these fields have declined to a dras t ic stage in the last 10 years -15 y ears. And I won't say that putting a little effort, but literally p u tting a little effort would enhan c e a good amount of production. And then with drilling a fe w more wells that would be a c o mplete game changer. So to our mind, we are very confident that we should be able to get th e best of the production from these fields.

Rajesh Jain:

Paras Savla:

But is there a risk that the contract can be terminated also, let's say, 2 years o r 3 years down the line, there is no significant enhancement, is there a risk that the contract can be terminated? How is the a g reement structured?

By the virtu e of any agreement, not with this agreement, any agreement like any other agreement al w ays there is a clause of termination. But usually, these kind of services or these kind of contracts are not meant for terminating, these are always to enhan c e the production. We've been c oming in from the services background, we have a fair un d erstanding on the equipment, f a ir understanding of the geology.

So, therefore , we believe that having a huge scope in front of us, there is n o reason for either party to ter m inate the contract because it is going to be a win-win situati o n for both of the parties. So g o ing to an extent of termination is something that is to a wild o f thought. It could be with any c o ntract. So that possibility is something that we really don't see.

Rajesh Jain:

Just you had m entioned to a previous participant that you paid only INR2 c r ores for acquiring Kandla Ener g y. And then to my earlier question where I'd asked yo u how many bps improvement you are expecting in the margins, you said around 2% imp r ovement you are expecting thr o ugh this Kandla acquisition. So are we saying that on a conso l e revenue of, let's say, around I NR600 crores or even INR700 crores, the 2% of that comes to around INR12 crores to IN R 14 crores.

So you are e x pecting that by making a payment of INR2 crores to acquire t his company, you will be maki n g an improvement in your EBITDA by -- to the extent of INR12 crores to INR14 crores within a year?

Paras Savla:

So we had m entioned that there is some amount of investment that we h a ve to do with the existing thin g s and the assets that Kandla has. So it is not something that with INR2 crores immediately r ush to INR12 crores. There would be some amount of investm e nts, which would be done on t h e plant for setting up all these facilities. And having said that, i f that is done, that will definitel y yield that kind of a result.

I need not go back on the examples of how Dolphin was acquired. So, if you see the example of Dolphin, i t is a clear testimony of what we are seeing it today. In Dolphin also our acquisition w as miniscule, but among them we got a property worth m o re than what our acquisition was and with the more of arbitration claims and the barge and al l those stuff. So in

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the compani e s where you tend to acquire from liquidation or from a CIR P process, there is always a goo d amount of possibility to get that kind of profits. So it is not ne w to us now.

Rajesh Jain: How much a d ditional investments you may need to make in the Kandla busi n ess? Paras Savla: One is we ar e working towards it, but my gestimate would be that it would b e less than INR10 crores, not e v en that much. Rajesh Jain: Okay. Then i t's a super acquisition, sir, I must really congratulate you. S ir, in the January concall, you had mentioned that FY '25 will not only be the highest e ver revenue and EBITDA, bu t also the highest ever net profit in the history of the company. Now which is the net -- which h as been impacted by the onetime loss. You have obviously de l ivered the highest ever revenue and EBITDA and if not for the exceptional loss, maybe you w o uld have done the highest ever n et profit also. But -- so was this onetime write-off not decid e d in the previous quarter? Paras Savla: No, it was n ot decided in the previous quarter. And as you very rightly said that it is an exceptional. B ut if you have to bar this onetime loss, which is a noncash thing, if you see that what we hav e committed in January, it is absolutely same what we had co m mitted in January. So our num b ers in terms of our top line or EBITDA or maybe even o u r bottom line are meeting wha t we said in January. Moderator: Thank you. L adies and gentlemen, that was the last question for today . I now hand the conference o v er to Mr. Rohan Shah for closing comments. Rohan Shah: Thank you, e v eryone for joining this call. It was pleasure interaction with y o u all. If you have any further q u eries, you can definitely approach us through Adfactors PR o r you can directly connect us. W e would be happy to answer all your queries. Thank you. Moderator: On behalf of D eep Industries Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.

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