Seamec Limited — Investor Meet, 19-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

Financial Performance: Seamec Limited reported a Q2 FY25 revenue increase to ₹110 crores, up 12% from ₹98 crores in Q2 FY24, with standalone revenue rising 32%. EBITDA also grew by 26% year-on-year to ₹38 crores, while profit after tax switched to a profit of ₹0.2 crores from a loss of ₹14.5 crores. Additionally, the company boasts a net cash surplus of ₹178 crores, with ROCE improving to 14% and ROE at 16%.

Future Outlook and Growth Drivers: Management highlighted the offshore services sector as a key growth area, emphasizing sustained global demand driven by India's rising energy needs and government initiatives favoring energy security. They aim to capitalize on this with their advanced fleet to support major clients like ONGC, Aramco, and AdNoc in exploration and production activities.

Order Book and Operational Updates: Seamec secured a charter agreement for its vessel Seamec-3 for underwater inspection work, completing the contract recently. Their barge, Seamec Glorious, initiated its second fair-weather season with ONGC, while the Seamec Princess resumed operations for a pipeline project.

Analyst Q&A Insights: Analysts inquired about contract repricing, expected margins, and updating working capital. Management confirmed contracts typically span three to five years, and repricing occurs upon contract renewals, reflecting an anticipated positive trend. Working capital stands at 75 days, with efforts to improve this further.

Strategic Focus Areas: Management's confidence in growth is underpinned by an observable trend toward long-term contracts and a commitment to enhancing financial metrics like ROC and operational efficiencies.

Investor Insight: With robust financial health and a strategic focus on expanding offshore services, Seamec appears well-positioned for growth, indicating a positive outlook warranting close investor attention.