Hi Sahil. I need a clarification. This stock is at ~7 PE. As you say the company is available at 300 crore. And it’s down more than 30% from peak and there’s is hope that revenue will go up. Why do you say that a lot of upside is already captured at such low valuation.
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Anyone attended AGM? Any new news/info revealed by management?
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Credit Rating report on 24th Sept
Management Guidance vs Ground Check
- The management’s revenue guidance from the last concall checks out when validated against current charter rates and expected operating days.
- Assumptions used:
- 340 operating days per rig
- ₹87.5/USD exchange rate
- Pioneer operating at $40,000/day in FY27
- If Pioneer is rechartered at $50,000/day, Revenue and EBITDA could be ~₹30 Cr higher.
The CRISIL report assumes a 32% EBITDA margin, which is slightly conservative compared to the 38–40% margin guided by management.
Thus, JDIL should still be able to generate ~₹600 Cr EBITDA over the next two years, with cash likely retained for refurbishment of rigs coming off charter.
Assuming nothing changes -
| KPI | FY24 | FY25 | FY26 | FY27 |
|---|---|---|---|---|
| Revenue | 617 | 828 | 925 | 900 |
| EBITDA | 139 | 241 | 296 | 288 |
| EBITDA % | 23% | 29% | 32% | 32% |
| EV/EBITDA (Current) | 4.2 | 4.2 | 4.2 | |
| Expected Market Cap | 1,710 | 1,668 | 1,635 |
I have recently came across two articles, both positive on the long term shortage of rigs in global market, but somehow I am unable to find value in current price unless day rates climb up to $90-100k/day for non-harsh deployment [Article #1, Article #2]
Request to please share counter views
Chat gpt used to re-phrame the post
Edit: JDIL has received the BGs furnished against money received from ONGC from Bombay highcourt. The same will be removed from balance sheet
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I was really impressed with the article 1 . But if crude oil prices remain at 60$ , jindal drilling can fall more
Profit Margins have really dipped this quarter, compared to last 3 quarters. The topline is also flattish QoQ, which was expected due to one of the rigs being inoperative. But lower margins was not expected at all, if someone has any understanding regarding this please share here.
Expenses are largely flat (185 Cr in Q2 vs 187 Cr in Q1). However, revenue has dropped by 16 Cr (6%) and correspondingly PBT margin has also dropped from 26% (67 Cr PBT / 254 Cr Revenue) to 22% (53 Cr PBT / 238 Cr Revenue)
This happens when your operating costs are fixed (Regardless of rig being operative or not, salaries have to be paid)
Jindal Pioneer remains the key triggering news. Hoping all these substack articles come true and it gets a rate higher than 60-70k$/day
Source for the numbers - Q2 PPT
Request any member who gets a chance to ask this question in con-call - By when is it expected to get re-hired? As per their earlier guidance, this was supposed to happen by Oct
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Management answered that there is a tender ongoing by ongc where they will participate.they were hopeful of getting north of 50k however the external environment has actually deteriorated since last order and lot of rigs are going to be available from other suppliers.
I guess they will definately get pioneer contracted in this round.however price may be lower. Major monitorable will be repricing for Discovery in first half of next year. The 3 owned rig will determine the profitability for future and considering pioneer will not fetch much, it will be more crucial that they get better rates for discovery.
Disclosure -invested
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