Deep Industries wins Rs 88.15 crore work order from ONGC for gas compression services
- Deep Industries secured a confirmed Rs 88.15 crore work order from ONGC for three-year gas compression services.
- Total disclosed order book stands at Rs 421.82 crore, covering 1.61 quarters of average quarterly revenue.
- Order inflow decelerated from Rs 323.62 crore in Q1FY27 to Rs 98.20 crore in Q2FY27, though individual order sizes remain consistent.
- Q1FY27 revenue rebounded to Rs 302.60 crore with 38.77% OPM, recovering from a net loss in Q4FY26.
- Valuation at 22.4x P/E contrasts with a 6.89% ROCE, implying market expectations for improved returns.
*this image is generated using AI for illustrative purposes only.
Deep Industries has secured a confirmed work order worth Rs 88.15 crore from Oil and Natural Gas Corporation Limited (ONGC). The contract covers the hiring of gas compression services at Balol GGS-1, Mehsana, for a period of three years.
WHAT HAPPENED
Deep Industries received a confirmed work order valued at Rs 88.15 crore from ONGC for gas compression services at Balol GGS-1, Mehsana, spanning three years.
ORDER IN FINANCIAL CONTEXT
The Rs 88.15 crore order represents approximately 33.6% of the company’s average quarterly revenue of Rs 262.50 crore. The total disclosed order book stands at Rs 421.82 crore across 6 orders (sum of the N orders disclosed across the last 3 fiscal quarters shown in the table below), providing coverage of 1.61 quarters of average quarterly revenue. With a trailing twelve-month revenue of Rs 1050.0 crore, the current backlog indicates a moderate pipeline relative to recent sales velocity, suggesting steady but not explosive growth momentum in the near term.
COMPANY ORDER TRACK RECORD
Order inflow has decelerated significantly from Q1FY27 to Q2FY27, dropping from Rs 323.62 crore to Rs 98.20 crore. However, the current order value is consistent with the company’s typical per-order size, which generally ranges between Rs 49 crore and Rs 84 crore based on recent disclosures.
| Quarter | Total Order Inflow (Rs Cr) | Key Awarding Entities |
|---|---|---|
| Q2FY27 (Jul-Sep 2026) | 98.20 | Oil and Natural Gas Corporation Limited |
| Q1FY27 (Apr-Jun 2026) | 323.62 | Antelopus Selan Energy Limited (formerly known as Selan Exploration Technology Limited), Oil and Natural Gas Corporation Limited |
EXECUTION AND REVENUE QUALITY
Revenue growth remained robust in Q1FY27 at Rs 302.60 crore with an OPM of 38.77%, following a severe margin contraction in Q4FY26 where the company reported a net loss of Rs 7.20 crore and negative OPM of -50.81%. The recovery in Q1FY27 suggests that the operational issues impacting Q4FY26 were transient, restoring profitability and operational efficiency.
| Quarter | Revenue (Rs Cr) | Net Profit (Rs Cr) | OPM (%) |
|---|---|---|---|
| Q1FY27 | 302.60 | 89.10 | 38.77% |
| Q4FY26 | 273.70 | -7.20 | -50.81% |
| Q3FY26 | 231.40 | 71.30 | 45.22% |
REVENUE GROWTH - ORDER WINS TRANSLATING TO REVENUE
As Deep Industries has sustained order wins, with significant inflows in FY25 and FY26, its annual revenue has grown from Rs 608.50 crore in FY25 to Rs 960.30 crore in FY26, representing a YoY growth of +57.8% based on the latest annual data. This strong historical conversion of orders into revenue supports confidence in the execution of the new backlog.
WORKING CAPITAL AND EXECUTION CAPACITY
The company maintains a healthy current ratio of 2.69x and a low Total Liabilities/Equity of 0.23x, indicating strong liquidity to fund working capital requirements for existing contracts. Operating cashflow was positive at Rs 270.10 crore in FY26, generating free cashflow of Rs 33.70 crore after capex, demonstrating efficient cash conversion from operations.
WHAT TO WATCH
- Execution rate: Monitor whether quarterly revenue run-rate accelerates as the new gas compression contract commences.
- OPM trajectory: Watch for stability in operating margins post-Q4FY26 anomaly to ensure consistent profitability.
- Client concentration: ONGC remains a dominant client; assess if diversification efforts are progressing to mitigate single-client risk.
- Backlog conversion: Track the pace at which the Rs 421.82 crore disclosed order book translates into recognized revenue.
KEY OBSERVATIONS
- Margin stress: Net loss of Rs 7.20 crore in Q4FY26; execution stress visible in quarterly data, though recovered in Q1FY27.
- Valuation check (as of 08 Sep 2026): P/E of 22.4x against ROCE of 6.89%. At the time of this article, valuation was pricing in execution improvement not yet visible in return ratios. (P/E is price-derived and will change; ROCE is from audited financials)
- Backlog signal: Book-to-bill of 0.40x. At this level, execution capacity is not the binding constraint; new order acquisition remains critical for sustained growth.
Historical Stock Returns for Deep Industries
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +4.27% | +18.68% | +28.14% | +142.43% | +49.14% | +1,121.03% |
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