The Indian Energy sector has seen remarkable progress over the years on the back of sustained investment in sectors such as refining, green energy and bio fuel with the petroleum and energy segment poised to play a defining role in shaping the global energy future. The current capacity is around 250 million metric tonnes per annum and is poised to reach 310 million metric tonnes per annum over the next five years time frame making the country among the top three refining hubs in the world. With many global refineries facing closure, the global energy market is expected to grow at a slower pace but India on the other hand is projected to stand out as a bright spot contributing nearly one third of the global energy demand over the next decade.
SEAMEC Limited is a leading provider of Diving Support Vessels and Offshore Support Vessels with a robust presence both in India and abroad. The company’s fleet includes 6 DSVs, 1 OSV, and 1 Accommodation Barge which are all equipped to meet diverse offshore needs. The company does two kinds of business, viz. EPC and IMR contracts with the mix now changing after Covid. While during pre Covid the margins used to be 20% but now post Covid the margins have increased to around 30% due to increase in the ratio of IMR contract which is a high margin business.
The company has entered into a memorandum of undertaking MOU with Directorate General of Shipping for a capital expenditure of Rs 1,000 Crores along with a MOU with HAL Offshore Limited for charter hire of MV Goodman for ONGC’s NLM9 Project. On the other hand, Seamec Princess commenced operations in the PRP Project and signed an addendum with Posh India Private limited for additional work of PRP VIII and Daman Upside Development Project. There has been a fresh hire contract of Seamec Glorious with L&T for a firm period of 150 days with option for extension. Plus, SEAMEC Swordfish resumed its operations after redressal of the technical defect.
The monsoon season has always been a lean season for Seamec in the offshore segment impacting mobilization and chartering activity but the company expects activity to pick up on the back of securing new contracts in the current quarter. The company management has clarified in its recent con call meeting that when oil is extracted in a oil field then there are different types of vessels which are used for oil exploration and different vessels used in providing services to an oil field which is already extracting oil. Due to a lean second quarter and its flagship vessel Seamec Swordfish having an unscheduled breakdown, the company posted Q2FY26 financial results with revenue of Rs 108 crores and EBITDA of Rs 18 crores.
Seamec is now fully occupied and contracted with ONGC and all its assets are deployed on hire. The company has also committed a large sum of Rs 800 crores for expansion of its fleet which would contribute positively to its cash flow and give new business opportunities. Seamec has a extremely bright future with all its vessels and barges currently working and under contract at higher charter rates plus having introduced four young vessels in its fleet, Seamec is expected to post solid next quarter financial results.
New vessels also require low maintenance and the company is therefore expected to post good EBITDA margins in the next few quarters. Fund managers and oil sector analysts are bullish on the Seamec stock currently quoting at Rs 1011 on the bourses with a 30% price appreciation over the next one year time frame.
