Asian Energy Services Ltd (ASIANENE) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day and welcome to the Asian Energy Services Limited Q2 and H1 FY27 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. From the management, we have with us today Mr. Kapil Garg, Managing Director, Mr. Aman Garg, Director, Mr. Sumit Maheshwari, Group Chief Financial Officer, Mr. Nirav Talati, Chief Financial Officer. As a reminder, all participant lines will be in the listen-only mode, and you will have an opportunity to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kapil Garg, Managing Director. Thank you, and over to you, sir.
Kapil Garg (Asian Energy Services Ltd): Thank you. Good evening, everyone. I welcome you all to the Q2 and H1 FY27 earnings conference call. Along with me, we have on the call Mr. Aman Garg, Director, Mr. Sumit Maheshwari, Group CFO, Mr. Nirav Talati, CFO of Asian Energy, and Adfactors PR, our investor relations advisers. I hope every- everyone had the opportunity to go through our financial results and investor presentation, which have been uploaded on the stock exchanges website and our website. I will begin by sharing some perspectives on the operating environment during the first half of financial year '27,
Kapil Garg (Asian Energy Services Ltd): and elevated crude prices drove global energy market volatility and reinforced the importance of energy security through domestic production. Governments are increasingly prioritizing investments in domestic production, operational efficiency, and resilient infrastructure, while higher energy prices have enhanced the attractiveness and the profitability of marginal fields. For India, with import dependency of 85% to 90% for crude oil and about 50% for natural gas, energy security has become an increasingly critical national priority. The emphasis on strengthening domestic exploration and production is reinforced by recent government initiatives like the Samudra Manthan alongside earlier initiatives like Discovered Small Field bid rounds, through which Oilmax has built an array of promising hydrocarbon assets. All these initiatives are creating significant opportunities for growth and expansion going ahead. On AESL front, the order book remains robust. The success of the Vedanta project execution is expected to accelerate adoption and outsourcing of integrated field development projects from producers, both private and public, creating long-term opportunities for AESL. The planned production ramp up at Indrora and Mewad fields is on track, bolstered by the drilling of three wells in calendar year 2026, all of which have been successful and are producing. The fourth well, where horizontal drilling technology is being deployed for the first time in the field, drilling is going at this very moment. We remain confident in achieving the target of 800 to 900 barrels of oil per day capacity. Moving on to key developments for the company during the period, a strategic milestone was approval of the scheme of merger by absorption of Oilmax Energy Private Limited into Asian Energy Services Limited by the NCLT Mumbai Bench. We have also received in-principle approval from the Ministry of Petroleum and Natural Gas in relation to the proposed merger, marking another important step towards its completion, and we now await final approval from them in the coming days for the implementation of the merger. This merger represents a significant milestone in our long-term growth strategy, transforming AESL from services business into an integrated energy platform. By combining our established services capability with Oilmax's upstream oil and gas and mineral assets, we aim to strengthen our presence across the energy value chain, improve operation efficiency, and build a more comprehensive business platform. Due to imminent merger between AESL and Oilmax, we believe it would be prudent to provide an update on the Oilmax activities. With respect to Oilmax, we achieved three important milestones in first half of financial year '27. Oilmax, the first one is Oilmax awarded the Kutch offshore hydrocarbon block forward under Discovered Small Field Bid Round number 4 in which it holds a 50% participating interest and has been designated as the operator. Subsequent to the quarter, Oilmax has also executed the revenue sharing contract with the Government of India for the awarded block, marking a significant step towards forward for the company's upstream journey into large offshore blocks. Major progress, second point is, major progress has also been also taken place with the connection of the DNPL pipeline in Assam to the wider IGGL network, which is in progress, and is expected to help all hydrocarbon producers in the Northeast, including Oilmax, in increasing natural gas offtake and realizing better prices. Third is Oilmax received a Letter of Intent for the Pakro vanadium and graphite block in Arunachal Pradesh, marking its entry into the critical mineral segment. We also signed a gas sales agreement for Tiphook with production is expected to commence in Q4 FY '27. These developments are aligned with our strategy of expanding our upstream asset base and diversifying into mineral assets with long-term growth potential. We see the global conditions creating opportunities abroad as well. Our international operations under Kuiper Group witnessed a recovery during Q2 FY '27 following certain operational challenges experienced at the beginning of the financial year due to the evolving geopolitical conditions in West Asia. Business activity returned to normal levels during the quarter. The most recent tensions particularly affecting Saudi Arabia continue to warrant close monitoring. Our operations in Saudi Arabia remain unaffected till now and overall project activity is on track.
Kapil Garg (Asian Energy Services Ltd): notwithstanding the impact on operating cost, we remain cautiously optimistic about the near-term outlook and excited by opportunities that will come from the region's post-war reconstruction as we focus on expanding Cyprus revenue to the guided US $100 million by financial year '30. On our mineral infrastructure segment, we have completed our first project in Rajmahal, Jharkhand, and two more projects are currently undergoing trials and commissioning. Along with a project we secured earlier from Gujarat State Electricity for Ukai TPS in in Gujarat, these recent developments give us great confidence in building and executing the mineral handling projects going ahead. Going by historical operational performance, we are anticipating large revenue booking in H2 from the segment and remain active in participating in all opportunities on the horizon, not only with Coal India, but also with other customers. As we enter the second half of financial year '27, our focus remains on accelerating project execution, strengthening our order book, integrating Oilmax operations with AESL, and maintaining CapEx and financial discipline. Now, I hand over the call to Mr. Sumit Maheshwari, our Group CFO, to talk about the financials.
Sumit Maheshwari (Asian Energy Services Ltd): Thank you, Kapil, sir. Good evening, everyone. Talking about H1 FY '27 financial performance, the company reported revenue from operations of INR 537.9 crores, a 148 148% increase on a YoY basis, more than doubling compared to INR 217.4 crore in H1 FY '26, reflecting a strong growth trajectory. EBITDA stood at INR 52.3 crore, up 148% on YoY basis, while EBITDA margins came in at 10%. Profit after tax stood at INR 29.8 crores, translating into a PAT margin of 6%. Coming to Q2 FY '27, the company reported revenue from operation of INR 266.7 crore compared to INR 102 crore in Q2 FY '26, growing 161% YoY. EBITDA for the quarter grew 235% YoY to INR 30.3 crores compared to INR 9.1 crore in the corresponding period last year, while EBITDA margin came in at 11%. Profit after tax for the quarter stood at INR 17.1 crore with PAT margin at 6%. For the oil and gas segment, revenue for Q2 FY '27 stood at INR 239.8 crores with an operating profit of INR 42.8 crores. For H1 FY '27, the segment reported revenue of INR 488 484.5 crores and a profit of INR 76.1 crore. In the mineral and other energy services segment, revenue for Q2 FY '27 amounted to INR 26.9 crores with a profit of INR 4.3 crores. For H1 FY '27, the segment reported revenue of INR 53.3 crore, while profit came in at INR 8.4 crore. Coming to our balance sheet, we continue to maintain a strong financial position with a gross debt to equity ratio of just 0.25, and on a net basis, we are almost a debt-free company. It further reflects the strength of our financial fundamentals and this provides us a strong foundation to pursue future growth opportunity while maintaining a disciplined approach to our capital allocation. While sequential revenue remained largely stable during Q2 FY '27, we delivered a strong performance at the EBITDA level, reflecting improved operational efficiency and profitability. Looking ahead, we are confident of delivering strong revenue in H2 FY '27 supported by our robust order book, accelerated project execution and a healthy pipeline of opportunity. We remain firmly focused on sustaining this momentum and are well on track to achieving our stated guideline guidance for the financial year. Thank you. We now open the floor for question.
Moderator: Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Siddharth Chouhan with 361 Capital. Please go ahead.
Siddharth Chouhan (361 Capital): Hi, sir. Thank you for the
Siddharth Chouhan (361 Capital): and, congratulations on good set of results. Couple of questions from my end, firstly, in the oil and gas segment, if I look on a sequential basis, EBIT has increased sharply, you know, despite revenue moderating, so can you share the reason for the same?
Kapil Garg (Asian Energy Services Ltd): Right. Siddharth, do you have any further question or?
Siddharth Chouhan (361 Capital): Yeah, I I do have two other questions, should I should I say them?
Kapil Garg (Asian Energy Services Ltd): Yeah, please.
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