Deep Industries Ltd

Deep Industries reported a robust Q4FY26 performance, with revenue rising 49% YoY and 12.3% QoQ to ₹2.5 billion, surpassing market expectations. Growth was driven by strong traction across most operational segments, although the PEC business was partially impacted by a fire-related disruption. The company’s ability to sustain execution momentum despite operational challenges has reinforced confidence in its long-term growth trajectory.

While operational performance remained strong, profitability came under pressure due to elevated expenses. EBITDA grew 45% YoY to ₹819 million but declined sequentially as other expenses surged sharply during the quarter. A significant portion of this increase came from provisions related to legacy receivables from Dolphin Offshore. Additionally, the company reported a large non-cash exceptional write-off linked to older receivables from its Kandla entity. Despite these adjustments, adjusted profit after tax still rose 50% YoY to ₹630 million, highlighting resilience in the core business.

Deep Industries continues to maintain a strong order book exceeding ₹30 billion across drilling, gas processing, workover, and production enhancement services. The company also has an active bidding pipeline of ₹5–6 billion, excluding upcoming PEC opportunities. Management expects new contract wins in higher horsepower drilling rigs and PEC projects during H1FY27, which could further strengthen revenue visibility over the next two years.

The company has outlined an ambitious ₹3 billion capex plan for FY27 focused on PEC expansion, higher-capacity rigs, and gas processing assets. Deep Industries is also evaluating additional investments in 2000 HP drilling rigs through joint ventures, reflecting confidence in rising demand for high-capacity energy infrastructure. Beyond traditional oil & gas services, the company is exploring opportunities in green hydrogen, coal gasification, geothermal energy, and offshore fleet expansion to diversify future revenue streams.

Despite temporary delays in the PEC project following the Andhra Pradesh gas leak incident, management reiterated its expectation of 25–30% revenue growth with sustainable EBITDA margins of 42–45% over the medium term. The company believes its diversified business mix and expansion into higher-margin segments will improve earnings stability and support long-term growth. Analysts continue to remain constructive on the stock, expecting healthy revenue and EBITDA CAGR over FY26–FY28.

Deep Industries’ latest quarter highlights a company balancing near-term operational challenges with strong long-term growth visibility. A large order book, aggressive capex strategy, expansion into emerging energy segments, and stable margin guidance are keeping investor optimism intact. The stock’s movement reflects growing market confidence that Deep Industries could emerge as a stronger and more diversified energy infrastructure player in the coming years.