Summary
Jindal Drilling & Industries Limited - Q3 FY26 Earnings Call Summary Friday, January 30, 2026 12:00 PM
Event Participants
Executives 2 Kaushal Bengani (Deputy General Manager, Investor Relations & Finance), Raghav Jindal (Managing Director)
Analysts 5 Amit Agicha (H.G. Hawa & Company), Apoorv (Individual Investor), Mehul Panjuani (40 Cents), Pawan Nahar (Individual Investor), Siddharth Chauhan (Batlivala & Karani Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Other Income | Negative (Value not specified) | -100% YoY approx; Reversed ₹100 crores previously recognized gain due to Supreme Court appeal by ONGC. |
| Annual EBITDA Guidance | ₹350 crores | Flat YoY; Expected to remain consistent for FY26 and FY27 despite contract transitions. |
| Order Book (Q4 FY26) | ₹237 crores | Projected revenue trajectory for the final quarter of the fiscal year. |
| Net Debt | Debt Free | Management confirmed company remains debt-free with cash reserves for operations and acquisitions. |
| Outstanding Liability | ~$35 million | Remaining dues related to the acquisition of the rig “Jindal Pioneer”. |
| Refurbishment Capex | ₹50 - ₹100 crores | Per rig cost for dry docking; 3 rigs are scheduled for this in CY 2026. |
Geographic & Segment Commentary
- Offshore Rig Operations: The primary revenue driver with all rigs currently deployed except one (Jindal Pioneer) which is undergoing refurbishment. Strategic focus remains on Indian waters due to high mobilization costs for international competitors, though one rig is currently in the UAE.
- Non-Rig Services: Includes directional drilling and mud logging segments. Management noted these segments provide diversified EBITDA, with specific performance data provided in the supplementary investor presentation.
Company-Specific & Strategic Commentary
- Litigation Accounting: Management reversed a ₹100 crore gain (interest/forex on a ₹66 crore receivable) from a litigation with ONGC. While the Bombay High Court ruled in the company’s favor, the matter is now sub-judice in the Supreme Court, prompting a conservative accounting reversal.
- Rig Acquisition & Deployment: The “Jindal Pioneer” rig, acquired in March 2025, is being bid for a new 4-rig ONGC tender. The company is transitioning from a rental-heavy model to an ownership model to improve margins, though no current update exists regarding acquiring rigs from Maharashtra Seamless.
- Asset Maintenance: Three rigs are due for de-hiring and refurbishment in CY 2026. Management is conserving cash to fund these dry-docking expenses, which range from ₹50-₹100 crores per vessel.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA | ~₹350 crores (FY26/27) | Based on current contract visibility and steady operational performance. |
| Rig Demand | High (Short-term) | ONGC is expected to release tenders for 4 additional rigs shortly; global supply is tightening. |
| Day Rates | Gradual Increase | Management expects a step-by-step increase in domestic rates as international rig availability decreases. |
Risks & Constraints
| Risk | Context |
|---|---|
| Litigation Risk | The reversal of ₹100 crores in Other Income highlights the uncertainty of the Supreme Court verdict regarding the ONGC dispute. |
| Contract Repricing | Three rigs face de-hiring in 2026; while management is optimistic, any delay in re-tendering or lower bid rates could impact FY27 revenues. |
| Capex Pressure | The requirement for ₹150-₹300 crores in refurbishment costs and debt servicing for Jindal Pioneer ($35m) limits immediate aggressive dividend expansion. |
Q&A Highlights
Contracting & Market Dynamics
- Question: How do you view the upcoming repricing of rigs in FY27? (Siddharth Chauhan)
- Answer: ONGC is expected to issue a 4-rig tender soon. While there was a squeeze in the last tender, global supply is tightening as Saudi Aramco has resumed contracts, which should support higher rates in India. (Raghav Jindal)
Cash Allocation & Buybacks
- Question: With large cash reserves, is management considering buybacks or significantly higher dividends? (Amit Agicha)
- Answer: Cash is being conserved for the dry-docking/refurbishment of 3 rigs in 2026 and to pay the ~$35 million balance for the Jindal Pioneer acquisition. (Kaushal Bengani)
International Expansion
- Question: Are you willing to deploy rigs outside of India if rates are higher? (Pawan Nahar)
- Answer: Yes, the company is actively exploring international contracts and is registered with several global clients. However, Indian long-term contracts (3-5 years) remain the priority over shorter international stints. (Raghav Jindal)
Key Takeaway
Jindal Drilling reported steady operational performance for Q3 FY26, though the bottom line was significantly impacted by a conservative ₹100 crore reversal of Other Income due to ongoing litigation with ONGC in the Supreme Court. Structurally, the company is shifting toward owned assets, highlighted by the integration of “Jindal Pioneer,” though it remains burdened by a $35 million acquisition liability. Despite macro volatility, management guided for a stable EBITDA of approximately ₹350 crores for both FY26 and FY27. Strategic focus is now on the upcoming “dry-docking” cycle for three rigs in 2026 and bidding for new ONGC tenders to ensure continuous deployment. While the company remains debt-free, capital allocation remains focused on operational maintenance and asset payments rather than aggressive shareholder payouts. The outlook remains cautiously optimistic as global rig availability tightens, potentially driving a gradual recovery in domestic day rates.
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