United Drilling Tools Secures ₹149 Crore Work Order from Vedanta

United Drilling Tools Ltd (UDTL), an industrial equipment manufacturer, recently announced a major work order worth ₹1,486.62 million (over ₹149 crore)  from Vedanta Limited. The three-year order involves the supply of Oil Country Tubular Goods (OCTG), including casing, tubing, pup joints, and crossovers. These products will be used in offshore and deep basin applications. This development shows Vedanta’s reliance on UDTL’s capacity to manufacture oil and gas exploration equipment.

Industry Insights

The global market for OCTG, valued at USD 24.93 billion in 2023, is projected to grow to USD 46.61 billion by 2032. This expansion could present opportunities to cater to the increasing demand for tubular goods, particularly in oil and gas exploration.

Shareholding & Ratios

In the latest shareholding pattern, company promoters hold a 74.65% stake, retail investors own 24.66%, and Foreign Institutional Investors (FIIs) hold 0.68%. Key ratios showed that the return on capital employed increased from 6.17% in FY23 to 6.44% in FY24, while the return on equity dipped from 4.15% to 3.70%.

Company Profile

United Drilling Tools Ltd, based in India, is into the manufacturing of equipment for upstream oil and gas exploration. Its portfolio includes high-performance connectors, casing pipes, wireline winches, gas lift equipment, and downhole tools.

Financial Overview

UDTL’s financial performance has shown growth in recent quarters. In Q2FY25, the company reported a 50% increase in revenue, climbing from ₹34.62 crore in Q2FY24 to ₹51.88 crore. Net profit also surged by 86%, rising from ₹2.20 crore to ₹4.10 crore during the same period.

Following the announcement, UDTL shares gained traction, rising up to 7% in early trading. At the time of reporting, 11:44 AM, the company’s stock was priced at ₹283.25, showing an increase of 3.04% from its previous close of ₹274.90. UDTL’s market capitalisation currently stands at ₹578.23 crore. Whereas Vedanta’s stock is trading at ₹521.50, rising by 1.39% in today’s trading session.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.