| Change in Ownership
The company is presently managed by Divinus Fund, a Category II Alternate Investment Fund (AIF) registered under the SEBI (Alternative Investment Funds) Regulations, 2012. The fund operates through its trustee, Mitcon Credentia Trusteeship Services Limited, and is represented by its investment manager, Midas Alternative Investment Manager Private Limited (Midas). The fund has demonstrated capability in structuring investment opportunities and driving business growth through a disciplined approach to financial stewardship and operational improvements. Acuité believes that this transition in ownership is likely to strengthen strategic direction and governance, enabling more prudent capital allocation, sharper execution focus, and better long-term decision-making for sustained business stability and growth.
Improvement in profitability margins albeit decline in scale of operations
The company reported net revenue of Rs. 341.83 crore in FY 26 compared to Rs. 396.79 crore in FY25, reflecting a decline of around 13%. This decrease is primarily attributable to the timing gap between completion of existing contracts and redeployment of rigs to new contracts or locations. The operating profit (EBITDA) improved to Rs. 71.23 Cr. in FY 26 against Rs. 35.40 Cr. in FY 25 and Rs. 7.53 Cr. in FY 24. Accordingly, EBITDA margin improved to 20.84% in FY 26 against 8.92% in FY 25 and 2.57% in FY 24. The EBITDA margins in rigs business are volatile because costs are relatively fixed, but revenues depend on rig utilization over the year, pricing, and contract dynamics, leading to uneven profitability year-to-year. Accordingly, the net profit rose to Rs. 11.61 Cr. in FY 26 against Rs. 6.05 Cr. in FY 25 and Rs. (13.74) Cr. in FY 24. Furthermore, till July 2026 (4M FY 27), the company booked net revenue of Rs. 105.99 Cr. with EBITDA of Rs. 28.74 cr. (27.12%) and PBT of Rs. 6.05 Cr. (5.70%).
Acuite expects the company's revenue and profitability to remain inherently volatile over the medium term, given the nature of the rig-leasing business, where earnings are largely dependent on rig utilization levels, contract renewals and redeployment timelines. Nevertheless, the company's established presence in the oil and gas services sector, healthy operating profitability, and ongoing deployment of rigs with reputed counterparties which is expected to support its business risk profile. Further, the company's ability to secure new contracts and improve fleet utilization levels will remain key monitorable.
Moderate Financial Risk Profile
The financial risk profile of the company is moderate marked by comfortable net worth and moderate gearing level. The tangible net worth of the company improved to Rs. 170.73 Cr. in FY 26 against Rs. 158.79 Cr. in FY 25. The improvement is mainly due to accretion of profits into reserves. The gearing ratio deteriorated at 1.19 times in FY26 compared to 0.47 times in FY25. This increase is primarily attributable to the execution of the Master Settlement and Restructuring Agreement (MSRA) in August 2025 which also includes the lease liabilities as well as acquisition cost for the 8 rigs. Accordingly, TOL/TNW deteriorated to 1.79 times in FY 26 against 0.94 times in FY 25. Debt/EBITDA stood at 2.76 times for FY 26. Acuite believes that financial risk profile of the company will improve in near to medium term on the account of no debt funded capex planned and timely servicing of the debt obligations as per MRSA.
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| Intensive Working Capital Operations
The company’s working capital operations are intensive, as reflected in GCA days of 225 days in FY26. This is primarily driven by high inventory holding of 109 days and other current assets, including unbilled revenue. Elevated inventory levels are inherent to the rig leasing business, as the company is required to maintain adequate stock of spares, fuel, and consumables once rigs are deployed. However, the company benefits from relatively timely realization of receivables, with collections typically within 30 days from lessees. Accordingly, debtor days remained low at 25 in FY26, supporting the overall working capital cycle. Acuite believes that the company’s working capital cycle will continue to remain intensive, given the inherent nature of its operations.
Tender-Based Industry
The company operates in a highly competitive industry, wherein revenue visibility is closely linked to its ability to secure contracts through a tender-based bidding process. The tendering environment is competitive, with bids often awarded on the basis of the lowest quoted price, which exposes the company to margin pressures. The dependence on securing new contracts through competitive bidding also adds uncertainty to future revenue flows. Acuité believes that the tender-based nature of the business will continue to expose the company to competitive risks.
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