Investor Presentation Q1FY 27.pdf (3.1 MB)
Some key points:
Orderbook at all time high (761 cr).
No of rigs increased. So this result momentum might continue for some more quarter.
Orderbook contribution from private clients increased further as guided by management. (77:23 Private:Govt).
Disc: Biased, invested, DYOR.
The kind of rightward push that the company has been doing from a simple exploration drilling contractor with lumpy revenue is very attractive to me for the long run.
The only thing that I would like to observe is how will they manage to get enough cash to complete their capex (and even advance their JVs). Hopefully, the order book shift towards the private clients will help bringing cash quicker, but it is going to be really tight.
For those who are out of touch,
The business model shift: From two drill rigs in 2007 to ~40 rigs (able to drill 300–2,500 m) and 2.8 million+ metres drilled cumulatively, across six active domains — solid-mineral core/RC drilling, CBM exploration & production, aquifer mapping, 2D/3D seismic, underground drilling, and now mine ownership (Jharkhand coal) plus overseas mining JV (Oman).
If they are able to execute everything they are willing to execute (on time and with reasonable crediting techniques), then I see it re-rating by FY29.
Note: Not SEBI registered. Not investment advice or recommendation. Tracking the company with a satellite position. Views might be biased.
Can you please clarify how has this number (300-400 cr) been arrived at? Given the estimated value of coal reserve (at approx 84 MT), this number looks way too low. If we take the usual extraction period of 20-25 years, the 300/400 cr annual number looks off. Pardon my ignorance, I don’t much idea about the sector.
For FY27 and FY28, there could be an increase in the revenue because of this:
Reliance Industries has proposed a massive ₹2.73 lakh crore ($32+ billion) investment over 30 years to build India’s first integrated underground coal gasification (UCG) complex in the Eluru district of Andhra Pradesh.
Phase 1 (Exploration & Pilot - 2026–2027): Up to ₹3,000 crore allocated for initial exploratory testing and pilot feasibility.
This revenue number is on per year basis. Max extraction per year: 1 MTPA (as per management). For 3000 per Tonne (since the coal is W4 grade), you should arrive at the stated revenue number.(real time price data can be obtained from the Ministry of Coal’s National Coal Index (NCI)). Hope this answers your query.
