Dolphin Offshore

Dolphin Offshore Enterprises is a leading provider of underwater services to the Indian oil and gas industry. Over the years, it has developed a diversified portfolio for undertaking turnkey projects involving sub-sea and marine services and as an EPC contractor. Most of the contracts given to the company are directly or indirectly for ONGC, with almost 95% of its work coming from the PSU. For Q1FY15, the YoY performance of the company is not too enthusing, with consolidated net sales for the quarter coming in at Rs.60 crore, down 46% and net profit was at Rs.24 crore, down 20%. Sequentially, topline fell 55% but in Q4, the company had a loss of Rs.11 crore on account of an exceptional expense. Thus in terms of bottomline, QoQ, it’s a turnaround this Q1. Noteworthy fact here is that company reduced its operating costs YoY by 71% and this was led by lower vessel charter and related cost, lower equipment related expenses and lower employee benefit expenses.

The big concern with this company is dependency on one company – ONGC. And this puts the company as huge risk. Also with competition increasing in this sector, going ahead, margins are expected to see some pressure. The company’s equity is at Rs.16.77 crore and EPS (face value Rs.10/share) stands at Rs.14.50 v/s Rs.18.15 in previous year. Promoter’s stake is at 54.83% of which 33.29% is pledged.