Deep Inds

Deep Industries Limited, a diversified oil and gas company, provides air and gas compression, work over, and drilling rig services in India. The company is also involved in the exploration and production business of oil, gas, and coal bed methane. For Q1FY16, the company posted  a very dull and staid set of numbers. Net revenue earned was flat at Rs.27 crore and net profit came in at Rs.7 crore v/s Rs.6 crore in previous Q1. QoQ, it has jumped up 55%.

During the quarter EBITDA came in at Rs.16 crore, up 7% and margins improved on the back of lower expenses at 59% v/s 57% (YoY). The company recently signed a contract with ONGC for hiring of Gas Dehydration System for 5 production installations at their Rajahmundry Assets for a period of 3 years. The value of the contract is of Rs 278 crore. With oil prices falling, this company unlike the OMCs will be impacted but if it manages to keep good volumes, only then will it be able to mitigate the falling crude oil price effect. Promoters have been shoring up their stake in the company and total holding of the promoters increased to 69.47% from 69.13% (YoY). Both FII and DII have less than even 0.5% stake in the company.