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IDBI Capital Report
We visited the site and met the management of Deep industries Ltd. for an insight into the company’s business. The company specialises in providing oil and gas support services including natural gas compression services (37% contribution to revenue with a 60% Ebitda margin), drilling and workover rigs services (33% to revenue with a 42-45% Ebitda margin), natural gas dehydration services (10% to revenue with 60% Ebitda margin) and Integrated project management services (20% with a 27-28% Ebitda margin).
The order book of company has grown significantly in the last three years and currently stands at ~Rs 12 billion which gives them a visibility of three years as per trailing twelve months sales.
As per management, outsourcing work for compression of gas is expected to increase from 30% currently and Deep Industries stands to benefit from this.
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