Deep Industries Ltd (NSE: DEEPINDS) Q2 2025 Earnings Call dated Oct. 29, 2024
Corporate Participants:
Paras Shantilal Savla — Chairman and Managing Director
Rohan Shah — Director Finance and Chief Financial Officer
Analysts:
Mukesh Panjwani — Analyst
Sudhir Bheda — Analyst
Nirvana Laha — Analyst
Gaurav Shukla — Analyst
Heet Jhaveri — Analyst
Parikshit Gupta — Analyst
Raghu — Analyst
Gaurav Sachdeva — Analyst
M. Kumar — Analyst
Pawan Kumar — Analyst
Srikar Sai — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Q2 and H1 FY25 Earnings Conference Call of Deep Industries Limited. From the management, we have Mr. Paras Savla, Chairman and MD; and Mr. Rohan Shah, CFO. We also have an Investor Relations team from Adfactors PR. [Operator Instructions]
I now hand the conference over to Mr. Paras Savla for his opening remarks. Thank you, and over to you, sir.
Paras Shantilal Savla — Chairman and Managing Director
Good afternoon, everyone. It gives me immense pleasure to speak to you all today as we present our second quarter and half-yearly performance. Thank you very much for joining this call. I hope you all would have gone through quarter two and H1 results and investor presentation that are available on our website and on our exchanges. I’m also joined by Mr. Rohan Shah, Director of Finance and CFO, who will assist me in answering your queries. After my brief, he will share financial performance of the Company in detail, and we’ll take then the questions.
A crucial factor in country’s growth is the energy sector, where efforts are being identified to reduce dependency on imports. India is the third largest importer of oil and gas, currently relies on imports for around 35% of energy needs. In FY24, the country imported 233 million metric tons of crude oil, a slight increase from FY23. This heavy dependence underscores the critical importance of increasing domestic production. To address these challenges, the government has opened more than 1 million square kilometers for exploration and production areas previously classified as no-go zones. The Open Acreage Licensing Program is added to these efforts. The 10th round of bidding for oil and gas assets is scheduled to take place early next year, offering fresh opportunities for companies like Deep Industries.
At Deep, we see immense benefits from OALP initiative. It aligns perfectly with our strategic objectives, allowing us to expand our footprint in oil and gas services sector. By leveraging the opportunities from OALP rounds, we are well-positioned to contribute to increasing domestic oil and gas collection, thereby supporting our country’s goal of achieving greater energy security.
Through OALP, India aims to enhance crude oil and natural gas production, which is vital for reducing imports and ensuring long-term energy independence. As the energy demands of the nation continue to grow, Deep Industries remain committed to playing a pivotal role in this transformative journey. In conclusion, as India continues on this part of economic expansion and strengthens its energy infrastructure, the potential for growth is immense. We at Deep Industries are excited to be part of this journey, helping to guide the nation’s progress while ensuring a sustainable energy future.
Now let’s review our quarterly performance. The second quarter and half year have demonstrated solid growth but by a strong flow of orders and a promising bidding pipeline, a key recent being INR1,402 crores production enhancement contract from ONGC set for a duration of 15 years. This contract aims to boost production from ONGC mature oil fields in Rajahmundry, aligning with ONGC’s goals to increase hydrocarbon output and enhance reserves. Through this contract, all services revenue linked to production increases. Although the contract spans 15 years and since it is a front loaded, majority of the revenue will be booked in first 10 years. This contract is the first of its kind from ONGC with more rounds likely to follow. Our public sector units and private clients are also introducing PECs, and with our 30 years in the industry, we are well-positioned to secure similar projects in the future.
Consistent with EBITDA margins of around 40% in other verticals, we anticipate margins above 40% for the production enhancement contract as well. Such high-value contracts with excellent margins are expected to significantly improve both our top and bottom lines. Execution of this contract will commence in seven to eight months, targeting the next financial year.
With this new order, our order book has been more than doubled. Growth is evident across all verticals, including this new PEC segment. We anticipate additional value-added contracts to be added in our order book in the coming three to six months alongside strong bidding pipeline conversation within our regular business vertical.
The update on the Barge asset Prabha is that the refurbishment is now in the final stage of completion, and we expect it to contribute to revenues from quarter four onwards. The refurbishment process has taken a little more time than our initial estimates. However, in such kind of major refurbishments, such delays can happen due to some unforeseeable circumstances beyond our control. Having said so, we have already started generating operational revenue from Dolphin, and are confident that synergies generated out of the acquisition of Dolphin Offshore would be ROE accretive for the Company as a whole. We are highly optimistic about the robust bidding pipeline, which will add further to our strong order book over the next few years. This optimism is bolstered by the promising and favorable macroeconomic scenario.
With a solid foundation and strategic positioning, we are well prepared to capitalize on the opportunities presented by this favorable environment. Our confidence is further reinforced by the positive economic indicators and market trends which suggest sustained growth and profitability. As we look ahead, we are committed to capitalize on these opportunities for maximizing shareholder value and achieve long-term success.
With this, I would now hand over Mr. Rohan Shah, who will share financials detail. Thank you for joining and patiently listening. Thank you.
Hello?
Operator
Hello. Yes, sir. Rohan sir is connecting.
Paras Shantilal Savla — Chairman and Managing Director
Hello? Hello?
Operator
Yes, sir, please go on. Paras, sir, should we begin the question-and-answer session?
Paras Shantilal Savla — Chairman and Managing Director
Yeah, yeah. Please go ahead. I think it’s now — Rohan Shah has to continue.
Operator
Yes, sir. Sir is connected.
Paras Shantilal Savla — Chairman and Managing Director
Yeah.
Rohan Shah — Director Finance and Chief Financial Officer
Thank you, Paras bhai. Investor friends, thank you for joining the call today. Happy to share with you another stellar quarterly and half-yearly performance of Deep Industries Limited. All the comparisons are on a year-on-year basis, which would provide fair evaluation.
Consolidated revenue from quarterly and half-yearly operations rose 29% to INR130.62 crore and 25% to INR254.07 crore. The strong growth momentum in top line comes from execution of our existing orders as well as consistent new order flows. Tight control over costing and operational efficiencies have helped us post growth in EBITDA to INR64.60 crores in Q2 FY25 with EBITDA margins of 46.9%, and for our half-yearly EBITDA, it has shown growth of 46% to INR126.04 crore. We have been maintaining the margins in the range of 45%, providing us decent cash flow to strategize our future growth trajectory.
Net profit for the second quarter and half year stood at INR41.54 crores, up by 40%, and INR80.29 crore, up by 32% year-on-year. Our order book has grown to INR2,622 crore, almost 119% higher than Q2 FY24. The financial year ’25 is shaping up to be a landmark year for us as we are on track to achieve our highest-ever revenue, EBITDA and net profit.
Building on last year’s strong performance, the second quarter has further strengthened our position for this fiscal year. With government initiatives expected to boost infrastructure, exploration and production sector investments, particularly in the energy sector, we anticipate maintaining our upward trajectory throughout the rest of the year.
With this, I now open the forum for question-and-answer. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Mukesh Panjwani from WC Securities. Please go ahead.
Mukesh Panjwani
Yeah. Hi, sir. Am I audible?
Rohan Shah
Yes.
Mukesh Panjwani
Yeah, sir. Congratulations for a great set of numbers.
Rohan Shah
Thank you.
Mukesh Panjwani
Sir, my question is regarding our asset that is Prabha. What is the status right now? Has the refurbishment completed? And from when we are expecting to get the revenues out of it? And what kind of revenues we should expect now?
Rohan Shah
Yes. So the refurbishment is in final stage, and we believe it should start contributing to revenue from Q4. The refurbishment process has taken a little more time than our initial estimates. However, such kind of major refurbishment, such delays might happen. So these are the circumstances which are beyond our control. But yes, having said so, it will start from Q4 and start contributing in revenue, yeah.
Mukesh Panjwani
Okay. And sir, what kind of revenues can we expect? Like in the last con call, you said that it would be like $50,000 per day.
Rohan Shah
Yes, in fact, $50,000 is what we expect minimum revenue per day. Currently, the rates are even higher than $50,000.
Mukesh Panjwani
Okay, okay. So it can be even better?
Rohan Shah
Correct.
Mukesh Panjwani
Okay, okay. And sir, how can we expect our H2 as compared to H1 in terms of revenue and profitability?
Rohan Shah
Yeah, it has been seen in past — in majority of years, our H2 has always been higher than H1, and so we believe this year will also continue the same trend, and our H2 would definitely be higher in terms of revenue than H1.
Mukesh Panjwani
Okay. That is there, sir. Sir, that is all from my side, sir. I’ll join the queue.
Rohan Shah
Thank you.
Operator
Thank you. The next question is from the line of Sudhir Bheda from Bheda Holdings. Please go ahead.
Sudhir Bheda
Yeah. Good afternoon, and first of all, congratulations to entire Deep team for giving the outstanding and historically high number for Q2.
Paras Shantilal Savla
Thank you.
Sudhir Bheda
So congrats. Sir, my question pertaining to FY26. See, there are two major events positively will contribute to the top line and bottom line. One is the production sharing enhancement contract, which will start, I think, from next year, and then deployment of barge, which you just said will be — revenue will start from the Q4 so that we will get the next year full-year operation of the barge. So two major reasons will be there, which will have a positive impact on the earnings. So considering this, what kind of growth do you foresee in FY26 as far as profit and top line is concerned?
Rohan Shah
See, we are quite bullish on these two opportunities. As you rightly said, these two opportunities will start contributing in FY26 like the barge should contribute full-year revenue and production enhancement contract should start contributing from FY26 onwards. So putting it all together, we believe we can have a growth of almost 35% year-on-year. Like last financial year, we closed somewhere around INR426 crores, and this year, we are expecting almost 35% growth to close FY25, and a similar amount of growth we are expecting for FY26. So our estimate says that we can close FY26 top line somewhere around INR800 crore.
Sudhir Bheda
Great. That is a great news. So again thanks for that. And sir, my second question is like if we see order book, the major contribution is like a production sharing contract. If you remove that, there is not much orders are coming in the last three, four months. So what are the pipeline of our core business orders for next two, three months?
Rohan Shah
So we are expecting a few big orders from our core business as well. So our core business order book is somewhere around INR1,250 crores, and we believe a few good amount of orders should come in the next three to six months. And considering the bidding pipeline of almost INR800 crore for our regular traditional business, it should continue to grow even further.
Sudhir Bheda
Great, sir. Thanks for the opportunity and once again, congratulations. Thank you.
Rohan Shah
Thank you, sir.
Operator
The next question is from the line of Nirvana Laha from Badrinath Holdings. Please go ahead.
Nirvana Laha
Hi. Thank you so much for the opportunity. Sir, I have a few questions on Dolphin. So on the Prabha contract, sir, last year, we had said that we expect to get it started in H1, then it got delayed to October and November, and now we are seeing Q4. So sir, with oil price fluctuating, investors are also getting a little jittery about the start of this contract. So if you can give us some more detail on why this is taking so much time, and also if you can say something about the nature of the contract we are looking at like I believe it’s possible to get a really long-term contract like five years plus and it’s also possible to get a shorter one. So what is our thought there, and what exactly is causing this delay? And are we now sure that from Q4 90 days of revenue we’ll get in FY25?
Rohan Shah
Yes, I agree to your point that it has been delayed than our initial estimates. See, this particular barge was idle for more than three years and was lying on port in Mexico. So of course, there is a lot of work has to be done. Our initial estimates were saying that it should not take this much time. But since — as and when we opened that machinery and barge, some other expenses or some other refurbishment came up, which we never anticipated. And so it has taken a long time than what we are estimating. However, as per our recent visit to the asset, it has almost completed the entire. Probably it will start putting into operation in December itself. However, we are considering it should contribute in revenue of 90 days considering from January onwards, that is for Q4 only.
So such a higher size of equipment, when you are refurbishing, this type of estimate changes are about to happen because this machinery was idle for more than three, three and a half years. However, we are quite bullish that it should immediately start operating and start contributing in revenue to the tune of what our initial estimate was of more than $50,000 a day.
Nirvana Laha
Sure, sir. Appreciate the answer. In terms of the contract, if you can say something more. Have you already signed with the client? Or how easy, or difficult is it going to be to sign? Like do we already have discussions going on with multiple clients? So if you can give us some color on that.
Rohan Shah
Correct. So currently, the discussions are already going on with potential clients, and we are evaluating both possible options, whether to put on a charter hire of long-term, more than five years plus, or to have a short-term charter hire. We are just evaluating the cost-benefit analysis, and whatever best would be in the interest of Company, we would go with it. So both long-term and short-term charters have their own pros and cons. So according to the best possible judgment, we should go with such contracts.
Nirvana Laha
Sure, sir. My next question is sir, if I look at the CWIP, the capital work in progress in Dolphin has increased sharply from INR47 crores in March to INR167 crores now.
Rohan Shah
Correct.
Nirvana Laha
So earlier, you had indicated last quarter that we are going to spend around $12 million, like INR100 crores for the final refurbishment of Prabha. So looking at this figure, has that cost of Prabha gone up, or is this you are putting capital to use for some other asset?
Rohan Shah
No. So the cost of Prabha is in the range of $12 million to $13 million only, so it’s INR100 crores, INR110 crores is for Prabha. Balance amount was original value of vessel, which was there in book, but the amount has been shifted from one subsidiary to another because the asset we have transferred from Mauritius subsidiary to Dubai. And so in Dubai subsidiary, it has now parked into CWIP, unless the entire refurbishment will complete. So this amount which you are referring to is including of original book value as well as refurbishment costs.
Nirvana Laha
Okay. Okay, all right, sir. And sir, coming to the other contract that Dolphin is currently executing a certain class of DSV, so how much revenue is pending from that contract for this financial year? And also if I look at H1 revenue, we have booked about INR25 crores, but almost everything has flown into receivable. So what are our payment terms with this client? When do we expect to get the cash for this revenue that we have executed? And how much more revenue can come from this contract in H2?
Rohan Shah
In H2, we are estimating something around $2 million to $3 million to be added into revenue from this particular contract. And with regards to the money flowing, it should start immediately after Diwali for this particular contract.
Nirvana Laha
Sure, sir. So what are the payment terms in such repair or asset-in-class contracts?
Rohan Shah
So in this particular contract, we have a billing methodology on stage-wise, and payment terms are 90 days, and so they are largely in the contract tenure only.
Nirvana Laha
Okay. And sir, the old receivables of Dolphin, which have been INR140 crores since we acquired the company by NCLT after settling all other dues, that has not moved at all so I believe that there are some arbitration awards that we have won, and this INR140 crore number should come down. So sir, please give some color on how much we have won, when is the cash expected to hit, and what is your outlook on the remaining receivables.
Rohan Shah
Yes. So out of those old receivables in three of our debtors, we have received arbitration award in our favor. Putting all together, it would be — as of now, I believe it would be more than INR33 crores to INR35 crores, which arbitration award is already received in our favor, just amount has to be flown to us. And in other debtors, we are pursuing for a recovery of the receivables, which we believe should definitely come to us.
Nirvana Laha
Sure, sir. When do we expect to collect those INR33 crores? When should the cash come in?
Rohan Shah
Yeah. Ideally, it should have come by now, but since these clients are PSUs, we’ll have to give some more time to them. Yeah.
Nirvana Laha
Sure, sir. I have three more questions on the stand-alone business. Can I ask or should I come back in the queue?
Rohan Shah
I would request if you can come in the queue again.
Nirvana Laha
Sir, thank you. I’ll join the queue again.
Rohan Shah
Thank you.
Operator
Thank you. The next question is from the line of Gaurav Shukla from Finvestors. [Phonetic] Please go ahead.
Gaurav Shukla
Sir, thank you for giving me the opportunity. Sir, one question — am I audible, sir?
Rohan Shah
Yes, yes. Please go ahead.
Gaurav Shukla
Sir, pertaining to debtor days, sir, continue increasing your debtor days. I want to ask a question about debtor days of your Company.
Rohan Shah
See, our normal debtor days are in range of 90 to 100 only. The debtors which are appearing high are inclusive of old debtors from Dolphin Group of almost INR141 crores, and — because of those old debtor, overall debtor days are appearing high. However, that is not the case. Those old debtors, if we can exclude, then our normal debtors are in range of 90 to 100 only.
Gaurav Shukla
Okay, sir. Some measures are taken for lowering the debtor days.
Rohan Shah
Yeah, yeah. So I think just before your question, we were discussing on that only, about the recovery of old debtors from Dolphin. And those recovery will definitely improve overall debtor days.
Gaurav Shukla
Okay, sir. Thank you, sir.
Rohan Shah
Thank you.
Operator
The next question is from the line of Heet Jhaveri [Phonetic] from Moneybee. Please go ahead.
Heet Jhaveri
Good evening. Am I audible?
Operator
Yes, sir.
Heet Jhaveri
Yeah. So my first question is we have an order book of INR2,622 crores. Is that including Dolphin Offshore, or is that separate?
Rohan Shah
No, it is separate.
Heet Jhaveri
Okay. So what is the order book for Dolphin in that?
Rohan Shah
So Dolphin, we have not yet signed any major contracts. The contracts which you are executing has a balance value of around $2 million to $3 million. So that’s not much significant in overall order book so we have not yet added those in the overall order book, yes.
Heet Jhaveri
Okay. And to reach this INR800 crore figure that you mentioned, will we be able to do that using our existing barges and the new contracts that we have with ONGC? Or will we expect to do a larger capex in the next coming year or so?
Rohan Shah
No. So our existing order book only will be sufficient to reach to that level. Of course, in production enhancement contract, we’ll have to do a certain amount of capex, but that has been staggered over a period of 10 to 12 years.
Heet Jhaveri
Okay. Thank you. That’s it from my side.
Rohan Shah
Thank you.
Operator
The next question is from the line of Parikshit Gupta from Fair Value Capital. Please go ahead.
Parikshit Gupta
Hello. Am I audible?
Operator
Yes.
Parikshit Gupta
All right. Thank you very much for the opportunity and congratulations on a great set of numbers. I have a couple of questions. I’m going to begin with the standalone business. So my first question is more on an opportunity level question. I understand that there are multiple blocks which have been awarded under the OALP program, however, I believe about 10% to 12% of those blocks are actually operational. So going forward, you also articulated that the government has increased exploration licensing in areas which were earlier a no-go. But on an industry-wide level, can you please talk about the production capabilities of these different blocks that are coming in picture as of now?
Rohan Shah
Yes. So with these different rounds of OALP and earlier, there were NELB rounds, CBM rounds and help rounds and all.
So all put together, to the extent I am in agreement that not all of these blocks are coming under development, but yes, whatever is coming under development will definitely, require services which we provide. And with these different rounds, new entrants in the industry are also coming up with bidding of these blocks. The companies which are not predominantly having interest in oil and gas are also getting in this bidding and they are getting awarded blocks. So for them, we can be a one-stop solution provider for developing their entire field. And so we believe with such awards and with such development programs, our opportunities will tend to increase.
Parikshit Gupta
I understand. And I’m new to this industry, so please pardon my lack of knowledge. But so far, I’ve seen that the recent new exploration regions, that include a significant amount in the offshore space. I understand that with the Dolphin acquisition and the Company’s trajectory towards the offshore services, but at this point, I’m not sure if you have offshore drilling and production capabilities.
Rohan Shah
Correct. So we do not have offshore drilling capabilities. In offshore, we would be starting with support services through Dolphin only. But with regards to onshore, we have our full-fledged range of services, and whatever opportunity is coming in onshore, we can easily tap them.
Parikshit Gupta
I understand. And if I may just ask a question about the order book of the standalone business. How much on a percentage split level would it be for drilling and workover as well as the gas processing, please?
Rohan Shah
Those breakup, as of now, I’m not having, but I can share separately. So you can be in touch with Adfactors and we’ll definitely share those breakups.
Parikshit Gupta
Understood. I have a couple of more questions, but I will rejoin the queue. Thank you very much.
Rohan Shah
Thank you.
Operator
The next question is from the line of Raghu [Phonetic] from Travest Capital. Please go ahead.
Raghu
Hello? Am I audible?
Rohan Shah
Yes.
Raghu
Congratulations on a good set of numbers. My question is just specifically regarded to the gas processing segment of ours. I just want to understand, generally, what is — who are the customers in the gas processing segment? Is it the city gas distributors, or is the national gas pipeline? Who are generally the customers there?
Rohan Shah
For us, customers are gas producers so like ONGC and Vedanta Cairn Oil & Gas are our larger customers for gas processing facilities.
Raghu
Okay. So the city gas fistributors, generally, they don’t use our pump sets for increasing the pressure in the pipeline? I’m really sorry, I don’t know, so I’m just asking.
Rohan Shah
Yeah, yeah. So for city gas distribution, the requirement of compressor is quite low versus which we operate on wells. And so in city gas distribution network, our services are not there because we operate with quite a huge amount of quantity of gas.
Raghu
Sure. And in the — for the customers like Vedanta and ONGC, the gas — how is the order structure generally? Is it a maintenance contract? Or is it just a one time installation, and then it runs for a particular lifetime? How is generally that particular business? Is it repetitive?
Rohan Shah
Yes. So these are service contracts, and largely, these contracts have been awarded in the range of three to five years. And on completion of those three to five years, they will come up for rebidding.
Raghu
Okay. Thank you so much, sir. And I have — yeah.
Rohan Shah
Our revenue generally depends on the quantity of gas we process.
Raghu
Okay. So it’s like an annuity contract. It’s not like a one time revenue booked and — so it’s a long time contract.
Rohan Shah
They are more of annuity contracts.
Raghu
Sure, sir. I have one last question. Regarding the recent ONGC order, I think in the initial comments, it was mentioned that it is — the payment is front-ended. Can you please explain why is it so? Why is the deal structured that way?
Rohan Shah
No. So the contract is for 15 years, but it is that we should bill majority of revenue in initial years because once you’ll take over the field and once we’ll start applying the technologies to increase the production, so majority of incremental production we should target in first 10 year itself, and so our billing in first 10 years would be the major one, and eventually, that incremental production will start dipping. So revenue in later part of years would be less than earlier part of years.
Raghu
Got it. Thanks for the answers. And just additional to this now because anyway we are going into taking responsibility of increasing production and all, do we have any idea of maybe bidding for the already discovered fields? Or do we have an idea to go into that line of business where we actually own the asset?
Rohan Shah
No, sir. We do have our similar kind of business in our different group company, but we do not have any idea to have such assets in Deep Industries.
Raghu
Thank you so much. That answers all my questions and have a great day.
Rohan Shah
Thank you.
Operator
Thank you. The next question is from the line of Gaurav Sachdeva from Sajag Fund House. [Phonetic] Please go ahead.
Gaurav Sachdeva
All right. Good afternoon, sir. Sir, my question is as ONGC and other major PSUs are going for $1 billion plans for this offshore drilling and government is also pressurizing, why is Deep Industries not entering into the offshore drilling rigs — workover rigs?
Rohan Shah
The offshore drilling rig segment is altogether a different segment with a huge amount of capex involved. For an example, my onshore drilling rig 1,000 horsepower drilling rig costs somewhere around INR45 crores to INR50 crores versus offshore drilling rig costs somewhere around INR500 crores to INR600 crores. And second, in this particular segment, our business is exposed to competition worldwide And so their rates are very variable and directly linked with crude price. So we believe that particular business is for deep pocket and a high-risk business And so as of now, we do not intend to enter into that segment.
Gaurav Sachdeva
Okay. And my second question is regarding this ONGC project we have bought. The revenue will be one like every year, we will be booking like INR100 crores, INR150 crores, or it will be a variable one?
Rohan Shah
Yeah. So our estimate says that every year, we should book more than INR100 crore a year.
Gaurav Sachdeva
Okay. Okay, thank you. That’s from my side.
Rohan Shah
Thank you.
Operator
Thank you. The next question is from the line of M. Kumar, [Phonetic] an individual investor. Please go ahead.
M. Kumar
Sir, one question that I have with our existing — in standalone business with the existing equipment that we have, what is the maximum revenue potential we can achieve?
Rohan Shah
See, our existing fleet, if we — we are just adding three rigs in our fleet. So if we consider that also as an existing equipment because that capex we have already started doing it. So on those particular numbers, if we’ll have to look at, then I would say we can book revenue of somewhere around INR460 crores to INR500 crores a year.
M. Kumar
This includes all segments, gas compression and onshore, all services, and everything you’re talking about.
Rohan Shah
Standalone Deep Industries, yes.
M. Kumar
Standalone, okay. Thank you, sir. Yeah. So now with the order book that is coming on our plate as we see, most probably, we have to start doing the capex maybe next year after these three new drill rigs that we are buying.
Rohan Shah
So in current financial year, we are adding three new rigs, which will definitely, start contributing in revenue probably in Q4, or in Q1 of next financial year. Our targets are that these rigs should start contributing in Q4 itself, well within the mobilization time allowed for those contracts.
And with regards to other new orders, depending on the client’s requirement, we might have to do capex for buying new equipment. And if client is okay with existing equipment, and if we have available equipment, we’ll definitely try to use our existing equipment first.
M. Kumar
Yeah. The reason for asking this question is that in the context of the bidding pipeline that we are talking about of a substantial nature, you may get a 30% out of that INR800 crores bidding pipeline that you are talking about.
Rohan Shah
Yes.
M. Kumar
We will have to reform this capex program because once we win the contract, we will have to do the mobilization and everything, et cetera. Right, sir?
Rohan Shah
Right. So as a policy, we always go for capex only after getting a confirmed order, and it varies from contract to contract, order to order that client is in requirement of new equipment or they are okay with existing equipment. So if that award demands for new equipment, then we should go for capex. Otherwise, we do not do capex.
M. Kumar
With respect to ONGC contract, do we need to do the — now that we have orders in hand, do we need to do any capex for that one? Or it’s going to be essentially services?
Rohan Shah
Yes, we will have to do capex for that contract as well. But since that contract is of long tenure, we have planned capex in different years. So initially, there will not be much capex but — as per existing plan, but yes, overall, we’ll have to do capex for that particular contract as well.
M. Kumar
That means we’ll start doing the capex after two-three years of revenue generation, or it’s going to be a little later than that?
Rohan Shah
The capex plan will be formalized once we take over that field and start implementing the strategy which we have planned.
M. Kumar
Okay. Okay, sir. Thank you.
Rohan Shah
Thank you.
Operator
The next question is from the line of Nirvana Laha from Badrinath Holdings. Please go ahead.
Nirvana Laha
Yeah. Thanks for the opportunity again, sir. Before moving to questions on standalone business, there’s one final clarification on Prabha. So the delay that is happening is more due to the asset refurbishment and not due to issues in getting a contract from a client, right? Is that understanding correct?
Rohan Shah
Absolutely correct.
Nirvana Laha
Okay, okay. Thank you. So on standalone, sir, you said that sometime back in the call that you are looking at a 35% growth so that means this year. So that means about consol revenues of INR575 crores or INR570 crores. And if I take out Dolphin revenues of around INR70 crores, that means on standalone, you’re aiming to do INR500 crores. Just now, you said that your total capacity that is there that can support a revenue of INR460 crores to INR500 crores so it seems like this is a bit of a stretch this financial year to do INR500 crores standalone revenue. So how confident are we that in H2, we will be able to do INR280 crores to meet this number?
Rohan Shah
No. So 35% growth I’m expecting on consolidated basis and not on a standalone basis. That is one. And out of INR570 crores, INR575 crores, which we are expecting on a consolidated basis, if we exclude Dolphin, then it remains with Deep Industries standalone, as well as its other subsidiaries which are contributing around INR40 crores, INR50 crores a year. So that put together INR500 crores and then INR70 crores comes to INR570 crores.
Nirvana Laha
Got it. So standalone, you’re aiming at around INR450 crores this year.
Rohan Shah
INR460 crores to INR470 crores. Yes, INR460 crores around.
Nirvana Laha
And sir, in one of the conferences — public investor conferences that you had participated in, in answer to one query for the Rajahmundry revenue enhancement project, you have said that the order book value of INR1,500 crores is calculated based on a gas price of $7, but you said that current gas prices are at $11. But sir, if I am not wrong, this Rajahmundry asset is under the APM price mechanism, right, and the current APM price is $7.7. So are you saying we’ll be able to sell this gas at a higher — at a non-APM higher price?
Rohan Shah
So this asset is not under APM price. The asset which we have got is not under APM price.
Nirvana Laha
Okay. So is it an HPHT field, or how is the pricing level?
Rohan Shah
Yeah, we can sell it at market price.
Nirvana Laha
Okay. Okay. Got it. That clarifies it. And sir, in the standalone balance sheet, there is a INR58 crore increase in loans to related parties so which subsidiary or this entity has it gone to, and towards what end has it been disbursed?
Rohan Shah
The loan of INR58 crores has been given to a company called Prabha Energy, which is our group company, and it’s a short-term loan recoverable within a year’s time.
Nirvana Laha
Okay. And the total balance outstanding with Prabha would be how much? I think there was already a balance outstanding — a loan balance outstanding, right?
Rohan Shah
The exact number I need to check. I can explain that or give data later on separately. As of now, I’m not having that particular data in hand, yeah.
Nirvana Laha
No problem, sir. And sir, one last question on Dolphin. So you said that the WIC number was looking big because of some transfer from one subsidiary to another, but if I look at the balance sheet, the balance sheet size itself has expanded with some other liabilities getting added on the liability side. So it seems like it’s not like from one head to another, but it’s an expansion of the balance sheet. So any comment there, or I can take it offline?
Rohan Shah
No. So primarily, the capex, which we are doing for Prabha has been funded primarily through the QIP which we had done initially, and with other loans from Deep Industries. So the liability which you are referring to is a loan from Deep Industries, which has increased.
Nirvana Laha
Okay. Okay, sir. All right, sir. Thank you so much and wish you all the best for the rest of the year.
Rohan Shah
Thank you.
Operator
The next question is from the line of Pawan Kumar [Phonetic] from Finvestors. Please go ahead.
Pawan Kumar
Thank you for the opportunity, sir. As we have added three new oil rigs that will be commencing operational by quarter one of financial year ’26, if I’m not wrong, what will be the expected revenue from each rig if it is 100% operational?
And my second question is regarding the rental days of Prabha after operationalization. It will be contracting for 365 days, or neglecting the metronized days. [Phonetic]
Rohan Shah
So rigs — we are adding three rigs, out of these three rigs, one is 1,000 horsepower drilling rig and other two are workover rigs, of which one is 100 ton and other is 150 ton. So all these three rigs are having different rates and we have already confirmed order for these rigs, and based on those orders only, we are importing them. So the revenue would definitely, be as per their orders, which we have already announced in past.
Exact number as of now, I’m not having, but I would say a 1,000-horsepower drilling rig should bill somewhere around INR3 crore a year — sorry, INR3 crores a month, and workover rig billing should range from INR50 lakh to INR75 lakh a month.
With regards to Dolphin, which Prabha, our daily rates are in the range of $50,000 to $55,000 per day, and working days, we should consider around 330.
Pawan Kumar
Right, sir. Thank you very much.
Rohan Shah
Thank you.
Operator
Thank you. The next question is from the line of Gaurav Sachdeva from Sajag Fund House. Please go ahead.
Gaurav Sachdeva
Sir, in the last con call, you said that you have also bidded for production enhancement. Any news on it?
Rohan Shah
No. It is still under evaluation. Yes, we have already bidded. As of now, no outcome is there.
Gaurav Sachdeva
And what is the value of that?
Rohan Shah
As of now, it is difficult to explain about the value unless it is awarded.
Gaurav Sachdeva
Okay. And sir, when is the ONGC expected to go for the second round of this production?
Rohan Shah
I think they are quite happy with the awards they had given in first round and they should definitely, come up with second and third round. But the timing, we cannot quantify as of now because it was a first kind of award they had given for this time. So maybe — so I don’t think we can estimate that timeline. Yeah.
Gaurav Sachdeva
Okay. And my last question is, sir, since our other — another some market-related investment so it will be always depend on the market, how market is fluctuating, the other income.
Rohan Shah
So my other income largely consists of interest from fixed deposits, debt mutual funds, and other arbitrage products. So largely, it is coming from that.
Gaurav Sachdeva
Okay. Thank you, sir. That’s all.
Rohan Shah
Thank you.
Operator
The next question is from the line of Parikshit Gupta from Fair Value Capital. Please go ahead.
Parikshit Gupta
Hello. Thank you again for the opportunity. Just to continue the questions. One question on the ONGC production enhancement contract. In the last conference, you did specify the revenue model for this. Would it be possible to listen to it once again, please, just to understand it better?
Rohan Shah
Revenue model, I didn’t get your question.
Parikshit Gupta
I mean you mentioned that some part of the payment is fixed, rest of it, about 65%, 70% is production-linked. So if you can just articulate that once again.
Rohan Shah
Yes. So the revenue is split in two different modes. One is fixed, which is for their existing production line, and whatever incremental production we achieve, we will get our services charge, which are similar, or let’s say, equivalent to 64% of revenue of that particular incremental gas.
Parikshit Gupta
Understood. Okay. Just a follow-up on this. I believe you mentioned that you can charge the market price for this particular region. However, looking at the overall natural gas story, liquefaction plants globally are getting added up, and domestic exploration, as you also articulated, is increasing which, all in all, hints us to a direction of moderation of natural gas prices. And while the contract was ordered considering $7 of natural gas price, do you think there is any chance of, in the near term maybe, the gas prices falling below that?
Rohan Shah
Not at all because currently, it is trading somewhere around $12.5 to $13 MMBtu, and price falling below $7, we don’t foresee even in rarest of rare thing kind of.
Parikshit Gupta
I mean because there is usually — I think in the APM model, the cap, the top line — the cap is about $6.5 if I’m not wrong.
Rohan Shah
So in APM, there is a cap. The cap is $7.7 or $6.5, I am not sure. But since we are not under APM, we do not have to worry about it.
Parikshit Gupta
Understood. Thank you. So my next question is about the other businesses, including the international business in the Middle East and the booster business, I think it’s called Raas. Can you tell us a little bit about those businesses performance in this quarter and a short to medium-term outlook for each?
Rohan Shah
So in Middle East, we provide various gas processing services from compression, dehydration, and processing to countries like Egypt and Oman, and this particular company is contributing around INR40 crores to INR50 crores a year and we believe it should continue contributing this similar amount with growth of around 10%, 15%.
With regards to booster compressor business, under Raas, we are not anticipating much growth because the GAs which have been awarded for city gas distributions are getting extensions and so the demand of those booster compressors is not picking up as per our expectation. So that particular company is contributing not more than INR15 crores, INR20 crores a year.
Parikshit Gupta
Absolutely. Thank you for that. And my final question is more like a fundamental one. I mentioned previously that we are new to this business so any investor who comes and evaluate an oil and gas company usually is attracted by the good valuations, ad such is the case with Schlumberger, such is the case with Deep Industries as well. However, the first risk that comes to mind is obviously, risk linking to the crude prices globally and considering a very uncertain year and possibly — I hope not, but possibly continuing over the next year as well. Can you talk a little bit about the Deep’s business as linked with global crude prices?
Rohan Shah
So our business is not at all linked with crude prices or their fluctuation because primarily, we are into services business, and our service contracts are fixed-price contracts for the tenure of contract. So once we have entered into a contract with X rate, those rates will continue for the tenure of contracts. They are not at all being affected by crude price.
Second, in our overall service mix, our major focus is on natural gas rather than on oil because in our drilling rigs or workover rigs, if my client is giving me to drill oil wells, then only we are exposed to crude oil. Otherwise, we are drilling gas wells also and oil wells also. Other than that, our entire service portfolio is pertaining to natural gas, which is not direct linked with crude oil prices. And since our entire business is largely domestic within India, so we haven’t seen any direct relation with crude oil prices in the last 30 years. In fact, we have seen some times where crude was going down and our services rates were increasing. So I don’t think we have any direct impact of crude price in Deep Industries business.
Parikshit Gupta
Understood. This was very helpful, sir. Just the final follow-up, if I may. Do you think the exploration, they come down? I mean, the velocity of exploration comes down when there is tensions in the global crude prices. It’s just my limited understanding of the industry, and I really appreciate your detailed answers so far.
Rohan Shah
See, generally, it is in — which everyone carries because developing a particular field and reaching to the production level, it’s not a one or two-month job. So if you will start increasing your exploration plans where crude oil is — crude is at lower level, then you can be able to position yourself to sell crude when it is going to a higher level. So it is not like a two, three months or six months job. Developing a field requires one, one and a half, two years’ time. And so I don’t think with reduction in crude price, exploration activities will start dipping. And largely clients which are PSUs, like ONGC, they largely run on national interest rather than making it profitable. And so to meet the country’s energy requirement, we haven’t seen such clients are reducing their exploration plans in any crude oil price. Yeah.
Parikshit Gupta
This was very helpful. Thank you very much, sir, for the answers and best wishes for the festive season.
Rohan Shah
Thank you. Thank you.
Operator
Thank you. The next question is from the line of Srikar Sai, [Phonetic] an individual investor. Please go ahead.
Srikar Sai
Sir, a very good afternoon. So it’s regarding our production enhancement contract business, sir. So would you say how many competitors we have, like the number of competitors — the major number of competitors like two or three, four, something like that?
And the follow-up is that there is another small company, I mean, compared to Deep, it’s a smaller company. So they have received a certain contracts which is worth nearly INR3,500 crores and same for 15 years of tenure, and I think this is the same production enhancement contract, sir. So can you please throw any light on it, sir?
Rohan Shah
Yes. So in first round of this production enhancement contract, a few other companies have also received similar kind of awards for different fields. So in this particular kind of business, the selection of field is very crucial because if you do not have any data or knowledge about geology of that particular field, then getting such a contract may not be that fruitful even if you get a contract for 15 years because you will have to understand and evaluate the geology of those particular fields well in advance before applying — before even applying for those fields because at the end of the day, your revenue is more linked with incremental production. And so we have been able to select the field, which we believe is very resourceful and from which we can definitely increase the production and get our best part of revenue.
Second, in increasing the production and developing this particular field, the experience and the equipment portfolio required to develop, or to increase the production is immense. So we, as a company with experience of more than 30 years in this particular field, can develop that particular field or increase the production by our internal fleet and our own manpower and technology versus if others are getting such contract, they’ll have to come to companies like us to develop their fields. So net-net, I would say it would be more beneficial to Deep than others in such kind of production enhancement contract.
Srikar Sai
Okay. Thank you, sir. Exactly. Sir, this is one another company that just like one or two months back, it was banned by ONGC for like two years. So can we say that this particular company like when they were not banned in this particular field like production enhancement contract field? Was this particular company just got banned by ONGC for two years, was it a competitor for us?
Rohan Shah
So I’m not sure which company you are referring to. Probably that Mr. Savla can reply, but unfortunately, he could not be continuing on this call. So we do not have answer to that, yeah.
Srikar Sai
Sir, the next question is regarding HF offshore [Phonetic] sir, like they have made a preferential issue from nearly $1.5 million for HF Hunter Shipping PTE, so what is that regarding, sir?
Rohan Shah
So that’s from the subsidiary of Dolphin, and not from Deep.
Srikar Sai
Okay. Sir,…
Operator
Ladies and gentlemen, that was the last question for today’s conference call. I would like to hand the conference over to Mr. Rohan Shah for their closing comments.
Rohan Shah
Thank you, everyone, for joining this call. It was a pleasure to reply to your questions. And if you have any further queries, you can definitely approach us through Adfactors, or you can directly connect us as well for any further queries. We would be happy to answer all your queries. Thank you.
Operator
[Operator Closing Remarks]