Operator: Ladies and gentlemen, good day and welcome to the Asian Energy Services Limited Q2 and H1 FY 2027 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.
Operator: Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.
Operator: I now hand the conference over to Mr. Kapil Garg, Managing Director. Thank you, and over to you, sir.
Kapil Garg: Thank you. Good evening, everyone. I welcome you all to the Q2 and H1 financial year 27 earnings conference call. Along with me, we have on the call Mr. Aman Garg, Director, Mr. Sumit Maheshwari, Group CFO, Mr. Nirav Talati, CFO Asian Energy, and Adfactors PR, our investor relations advisors. I hope everyone had the opportunity to go through our financial results and investor presentation, which have been uploaded on the stock exchange's website and our website. I will begin by sharing some perspectives on the operating environment during the first half of financial year 27, followed by the key strategic and operational developments across our businesses. During H1 FY27, the energy landscape was heavily impacted by the geopolitical tensions in the Middle East, where supply chain disruptions and elevated crude prices drove global energy market volatility and reinforced the importance of energy security through domestic production.
Kapil Garg: Governments are increasingly prioritizing investment 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 Round, 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 the AESL front, order book remains robust. The success of the Vedanta project execution is expected to accelerate the adoption and outsourcing of integrated field upstream and project from producers, both private and public, creating long-term opportunities for AESL.
Kapil Garg: A plant 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 the 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.
Kapil Garg: 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 operational 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 H1 FY27. The first one is Oilmax awarded the Kutch offshore hydrocarbon block covered under Discovered Small Field Bid Round number 4, in which it holds a 50% participating interest and has been designated as operator.
Kapil Garg: 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 forward for the company's upstream journey into large offshore blocks. Second point is, major progress has 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 Tiphuk, with production expected to commence in Q4 FY27. These developments are aligned with our strategy of expanding our upstream asset base and diversifying into mineral assets with long-term growth potential.
Kapil Garg: We see the global conditions creating opportunities abroad as well. Our international operations under Kuiper Group witnessed a recovery during Q2 FY27, following certain operational challenges experienced at the beginning of the financial year due to the evolving geopolitical conditions in West Asia. This has 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, notwithstanding the impact on operating costs. We remain cautiously optimistic about the near-term outlook and excited for opportunities that will come from the region's post-war reconstruction as we focus on expanding Kuiper's revenue to the guided USD 100 million by financial year 2030. On our mineral infrastructure segment, we have completed our first project in Rajmahal, Jharkhand, and two more projects are currently undergoing trials and commissioning.
Kapil Garg: Along with the project we secured earlier from Gujarat State Electricity for Ukai TPS in Gujarat, these recent developments give us great confidence in building and executing the mineral handling project 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 H2 of financial year 2027, our focus remains on accelerating project execution, strengthening our order book, integrating Oilmax operations with AESL, and maintaining CapEx and financial discipline. Now I will hand over the call to Mr. Sumit Maheshwari, our Group Chief Financial Officer, to talk about the financials.
Sumit Maheshwari: Thank you, Kapil sir. Good evening, everyone. Talking about H1 FY27 financial performance, the company reported revenue from operations of INR 537.9 crores, a 148% increase on a YoY basis, more than doubling compared to INR 217.4 crores in H1 FY26, reflecting a strong growth trajectory. EBITDA stood at INR 52.3 crores, up 148% on a 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 FY27, the company reported revenue from operation of INR 266.7 crores compared to INR 102 crores in Q2 FY26, growing 161% YoY. EBITDA for the quarter grew 235% YoY to INR 30.3 crores compared to INR 9.1 crores in the corresponding period last year, while EBITDA margin came in at 11%. Profit after tax for the quarter stood at INR 17.1 crores with PAT margin at 6%.
Sumit Maheshwari: For the Oil and Gas segment, revenue for Q2 FY27 stood at INR 239.8 crores with an operating profit of INR 42.8 crores. For H1 FY27, the segment reported revenue of INR 484.5 crores and a profit of INR 76.1 crores. In the Mineral and Other Energy Services segment, revenue for Q2 FY27 amounted to INR 26.9 crores with a profit of INR 4.3 crores. For H1 FY27, the segment reported revenue of INR 53.3 crores while profit came in at INR 8.4 crores. 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 opportunities while maintaining a disciplined approach to our capital allocation.
Sumit Maheshwari: While sequential revenue remained largely stable during Q2 FY27, 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 FY27, supported by our robust order book, accelerated project execution, and a healthy pipeline of opportunities. We remain firmly focused on sustaining this momentum and are well on track to achieving our stated guidance for the financial year. Thank you. We now open the floor for questions.
Operator: Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking their question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Siddharth Chauhan with 361 Capital. Please go ahead.
Siddharth Chauhan: Hi, sir. Thank you for the opportunity 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, despite revenue moderating. Can you share the reason for the same?
Sumit Maheshwari: Siddharth, you have any further question or
Siddharth Chauhan: Yeah, I do have two other questions. Should I say them?
Sumit Maheshwari: Yeah, please.
Siddharth Chauhan: Yeah. Secondly, in terms of the opportunity size which you are looking at from the perspective of upstream companies like ONGC, Oil India, and even Vedanta, outsourcing their fields on integrated service contract basis. Just want to know what is the entire size of the opportunity, and are there any tenders currently out there? That is my second question. Lastly, on the coal handling segment, any ongoing tenders out there where you are bidding? If you can share the quantum or the size of these contracts, I think that will be helpful. That is it from my end.
Sumit Maheshwari: Okay. Siddharth, answering your first question about the EBITDA increase, that is more reflecting our robust operation and financial performance. We have implemented a lot of cost efficiency measures, which has started yielding the results. Second, it is more of the project mix which we have executed in Q1 and Q2, and that has led to the sharp EBITDA increase as compared to a sequential basis from Q1 to Q2.
Kapil Garg: Yeah. With regard to the two other questions you asked about the integrated oil fields opportunities, Vedanta, as I mentioned in my earlier, based on the Vedanta success, ONGC has started to look at, and both Oil India has also started to look at. There are two tenders going on at this moment, as we speak, which we are looking to participate. In terms of size, I mean, some of these contracts are 15-year long, and they are about 5,000 barrels each. If I was to put a number, I would say between, let us say, INR 500 to INR 700 crores per tender per year for 15 years. These are the beginning, like I said, these are two projects which are currently on tender going on, and we expect more of those to come. Overall opportunity, you can calculate, is very, very decent size.
Kapil Garg: With regard to the question you asked for the coal handling plant, yes, there is a bid going on at the moment. Size is about INR 250 crore for that project, and little and more opportunities are in the pipeline.
Siddharth Chauhan: Understood. Understood, sir. Thank you so much for that, and all the best for the future.
Sumit Maheshwari: Thank you. Thank you.
Operator: Thank you. The next question comes from the line of Raj with DPI Capital. Please go ahead.
[Analyst] (DPI Capital): Hi, sir. Firstly, congratulations on the wonderful set of results. My first question is, sir, on the in-principle approval, how long do you think it would take time to get the approval from MoPNG for the Oilmax merger? Second question would be on the contribution from Project Kuiper on this quarter particularly, and we have given a guidance of INR 500 to INR 550 crore. How are we looking based on the current momentum in H1 in terms of meeting that guidance? My third question was just on the overall acceptance that you are seeing with the Samudra Manthan scheme and the other cases that have been announced by the likes of Oil India for drilling, by ONGC for drilling.
[Analyst] (DPI Capital): What is the scenario or change that we are seeing in the industry today because of all those initiatives being taken by the government in terms of orders, tenders coming up?
Kapil Garg: Okay. First question you asked was about MoPNG approval.
[Analyst] (DPI Capital): Yeah.
Kapil Garg: The in-principle approval is already in place. We would expect that we should receive the final approval soon. I mean, I would not like to put a number to the date because it is the government we are dealing with. Hopefully soon.
[Analyst] (DPI Capital): Okay.
Kapil Garg: The second question you asked about the Kuiper guidance. The Kuiper numbers we guided in the beginning of the year, we remain firmly on track to deliver the guidance of between INR 500 to INR 550 crores for the year. As I mentioned earlier when I was speaking, you all know that there is some crisis going on in the Middle East, which we are all watching very carefully. But luckily or fortunately, our operations are not impacted at this point in time. Going forward, we expect the numbers to be delivered.
[Analyst] (DPI Capital): Okay. Sir, any number on this quarter's contribution from Kuiper?
Sumit Maheshwari: Yeah, so this quarter, the difference between standalone and consolidated is the revenue from the Kuiper piece.
[Analyst] (DPI Capital): Okay. Got it.
Sumit Maheshwari: Kuiper has contributed roughly around INR 135 crore of revenue.
[Analyst] (DPI Capital): Got it, sir.
Operator: Yes, Mr. Raj, does that answer your question?
[Analyst] (DPI Capital): Yeah, just the third question on how the Samudra Manthan and the other investments announced by ONGC, Oil India, and the likes have been received. How is the bidding pipeline looking like? How the opportunity is playing out for you guys there?
Kapil Garg: Samudra Manthan, the detailed guidelines were only published last week.
[Analyst] (DPI Capital): Yes.
Kapil Garg: How the whole scheme would work. We are evaluating that, the detailed guidelines on how it will impact us and how we can use the opportunity. On a broader level, what we understand is that out of INR 84,000 crore which have been provided as Samudra Manthan, about majority chunk was for deepwater drilling. There we do not really have much role to play. But the matters which is directed towards building common infrastructure, pipelines, there could be potential for us to work with regards to the Samudra Manthan policy. Rather, as I just mentioned to you, the detailed guidelines were only published last week.
Sumit Maheshwari: Caesar will get benefited in the deepwater drilling.
Kapil Garg: Caesar will definitely benefit because one of the deepwater rigs which will come from outside to drill those wells will be an opportunity for Caesar directly.
[Analyst] (DPI Capital): Okay. Okay, Nathan. Because what we saw was that generally the market was a bit negative on the policy in terms of the repayment scheme that the Government of India has come up with, whether it is in terms of seven years or 50% of the cost being recovered. Any views on those particular guidelines, sir?
Kapil Garg: You are right. I mean, some of the foreign companies might take it a little bit on the slightly on the negative side, but of the domestic players who are already active here, for example, ONGC, Oil India, Reliance, British Petroleum, Vedanta, my view would be that they would certainly like to take advantage of the policy because they are already here and they want to do some of these things. This is my view on it. We have to see how it plays out.
[Analyst] (DPI Capital): Got it. Sir, regarding Northeast, just the last question from my end before switching back again. You mentioned that the gas pipeline would help in terms of realizations also, and we already know that Vedanta has a big unexplored block that is available there. What is this on your take on Northeast development in terms of the blocks that are not explored there and the potential gas cluster that is coming up? What can be the benefit that we can accrue from this?
Kapil Garg: Look, last 2, 3 years, we have been kind of hamstrung by the pipeline connectivity. We have been selling gas into the local grid, mainly primarily to tea gardens, a little bit to Brahmaputra Cracker and the Assam Power Corporation, because we are not connected to the wider grid. This is another gas grid which was supposed to be completed 2 years back, but slightly delayed. But now it has started to happen, and what we understand is that later this in November, the DNPL pipeline will be connected to the IGGL network. Some sections of the ONGC has already been connected to IGGL, and we are starting to see wider market opening up. For example, Indian Oil brings imported LNG for their 2 refineries operating in Assam.
Kapil Garg: That imported LNG will be replaced by domestic gas, which all the producers, including us, are producing in Assam. So, once the demand picks up for the domestic local gas, we think the pricing will improve. Right now, we are realizing about plus minus $7 per million BTUs, even though pan-India gas sells for more than $10. So, expectation would be that as the connectivity improves, this pricing gap would start to narrow down.
[Analyst] (DPI Capital): Got it, sir. Thank you. Thank you so much, sir.
Operator: Thank you. The next question comes from the line of Rajesh Chhajed with JAIN Investment. Please go ahead.
Rajesh Jain: Hello, sir. First of all, congratulations on the great set of numbers. I basically have two queries. Because Oilmax is going to merge with Asian Energy, if you can throw some light on the Oilmax revenue and profit of H1, and can you give us a guidance for the same for FY28, all three companies put together, Kuiper, Asian Energy, and Oilmax?
Sumit Maheshwari: Hi, Rajesh.
Rajesh Jain: Yeah
Sumit Maheshwari: As we told you, FY28 guidance, once the Oilmax merger is completed, we will start providing the detailed numbers and financials of Oilmax. The guidance we have provided for FY27, and as we already told for the Asian Energy, we are on track to deliver on the guidance. Once the merger is being completed, we, as an organization, we are providing the annual guidance, and which we will provide, that will include the next year guidance for Oilmax also. If you see, we have already provided the next two, three years, the long-term guidance for the company, combining Asian, Oilmax, and Kuiper, where we are targeting INR 3,000 crore of top line and INR 700 crore of EBITDA.
Sumit Maheshwari: We will continue with those guidance, and as and when the merger is being completed, the implementation is being done, we will start providing the necessary financial details and the guidance for the Oilmax also.
Rajesh Jain: All right. Thank you.
Operator: Thank you. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and 1. The next question comes from the line of Heena Parekh with Stark Loom Investments. Please go ahead.
Hina Parekh: Thank you for the opportunity. Firstly, congratulations on good set of numbers. I just wanted to ask that we have remained almost flat or degrown on the mineral and other services businesses on a YoY level, both in half yearly and quarterly. Could you please help me with the business that has led to the degrowth in this section? I had another question on the Duarmara plant. You indicated that we could start production in Q4 soon. It has still not started. When do you think that we could expect it to start?
Sumit Maheshwari: Okay, answering your first question about the mineral segment. As we explained earlier also, and if you have seen our PPT, generally the Q3 and Q4, which is the second part of the year, is we deliver and we execute more projects because of the seasonality and the monsoon season, which hits into the Q1 and Q2. We expect the momentum to pick up for the mineral segment in H2 of the year, and we definitely will be doing much better than the H1 in the H2. We do foresee the growth on the overall year basis from the last year numbers in the mineral segment. Coming to very specific things, the two new projects which have been awarded to us.
Sumit Maheshwari: Generally for 6 months, you spend more time into the engineering and all those things, so the revenue recognition is slightly slower, and then after 6 months, the revenue recognition improves. We do believe the H2, we will see a much better performance in this mineral segment as compared to H1, and we will see a better growth, and we will see a growth compared to the last year numbers also. Could you please repeat your second question? I just
Hina Parekh: Yes, yes. Perfect. Got it on that. Because on the plant, we indicated that we should start the production in Q4. Just wanted an update, like by when do you think we could expect it to start?
Kapil Garg: With regard to Duarmara, as you must be aware, Antelopus and NAM is our partner and operator in the field. During the call, they provided guidance. Well, it was drilled last year, encountered 3 zones. We were expecting the gas zone to be more prolific, but the oil zone came out better there, which kind of was a slight, I would have to say, it was a slight surprise to us. We are discussing with Antelopus now about the future plan, and we intend to go back and do more workovers and more testing. With regard to your specific question, when can you expect production to start? I would say Q1, FY28, or Q1 or Q2, FY28 would be more closer to what our expectations are right now.
Hina Parekh: Got it. Perfect. Thanks for the early heads and all the very best.
Operator: Thank you. Participants who wish to ask a question, please press star and 1. The next question comes from the line of Pawan Kumar with Agarwal Investments. Please go ahead.
Pawan Kumar: Hi, sir. Good evening. So congratulations on the good set of numbers. I have one question. How is the Vedanta project going on, and when we are expecting the revenue from the project?
Kapil Garg: Well, Vedanta project remains firmly on schedule, and we are expecting to complete all the CapEx elements during this financial year. So firmly on schedule as it was planned. We are already recognizing revenue for the work which we are performing on the quarter-on-quarter basis.
Pawan Kumar: Okay. Another question is, are there any active contracts that we are bidding for that are going to be coming out in the H2 of the year?
Sumit Maheshwari: As we told you, there is a very active bid pipeline for which we are working. We will not get into very specific details, but yes, both oil and gas side, we are actively working on three, four tenders right now, and we are expecting couple of more tenders to come. In the CHP side also, we have one active tender that is live right now for which we are planning to submit our bid, and then we are expecting couple of more tenders coming into normal. So the bid pipeline remains very robust and very active.
Pawan Kumar: Thank you. Thank you, sir. All the best.
Operator: Thank you. The next question comes from the line of Raj with PPR Capital. Please go ahead.
[Analyst 2]: Sir, I just wanted to get also better idea on the CBM in Satishwar that you already have in terms of the law. As of this quarter also, you stated that it is under development. Can you just give me a bit more detail on the potential at the project and what do we look for in the next 2 years regarding this project?
Kapil Garg: So Raj, we have got all the permissions required, including all the environmental clearances required. The contract has been finalized. The drilling is expected to start by middle of November, immediately after Diwali. The drilling results, it will take about 6 months for the drilling results to be simulated, based on which we expect the production as per our initial guidelines. It will take about 2 years to start the production, but the activity, as I just said, is going to start around 15 November.
[Analyst 2]: Got it.
Operator: Thank you. A reminder to all participants that you may press star and 1 to ask a question. The next question comes from the line of Tina Maheshwari with OPV Advisors. Please go ahead.
[Analyst 1]: Hello, sir. Congratulations on the results. First, I want to understand that since the anticipated merger is now being planned, like sanction by NCLT and MoPNG regulatory approval is pending, what is the capital intensiveness of this entire thing, and how will this help in achieving the overall growth for Avadh Pragati that you have indicated? Thank you.
Sumit Maheshwari: So, as we told, if you have seen our presentation, the Oilmax vertical, which is the E&P vertical, and we have a couple of mineral mines also. So for FY30, from the current production of 2,000 BOE per day, we are targeting to reach 10,000 BOE per day. So it will immensely benefit and immensely contribute to the growth of the company, which we are targeting. And in terms of the CapEx requirement and other things, as we told you, all these blocks are discovered blocks and already have necessary infrastructure and some wells in place. So we do not see too heavy investments in this particular sector in coming years. And this is particularly after the merger. As we ramp up our production of Oilmax E&P assets and Oilmax blocks, it will immensely contribute to the overall top line and bottom line of the company.
[Analyst 1]: All right. No, sir. Thank you so much.
Operator: Thank you. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and 1. Participants who wish to ask a question may press star and 1. Concluded. No further questions. Thank you.
Kapil Garg: If there are no further questions, thank you all for joining the call, and we look forward. If there are any additional questions you have, please reach out to our PR agency, and we will be very happy to answer those. Thank you so much. Good evening.
Operator: Thank you, sir. On behalf of Asian Energy Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
