The ongoing turmoil in West Asia and elevated oil prices are prompting oil companies to step up capital spending. Kalpataru Projects International is looking to benefit from this increased investment through its oil and gas business.
During a conversation with NDTV Profit, Director Amit Uplenchwar said, two major structural shifts are underway in the global oil and gas sector, both benefiting the company.
"There is an increased emphasis on producing more oil and hence new wells are being made and trying to extract oil there and gas. There is also a massive shift happening in the way the supply chain of oil is moving," he said, pointing to new pipeline routes being built to reduce reliance on vulnerable shipment corridors.
He said Kalpataru's presence across the upstream, midstream and downstream segments positioned it to benefit from both trends.
"Over the next two to three, four years, I see tremendous opportunity for us, not just because of the West Asia crisis but also because of the oil prices being elevated which justifies capex for the oil companies at this time," he said.
The company expects the segment to contribute meaningfully to order inflows in the second half of the current fiscal.
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"In Q3, Q4, we expect one or two orders coming from our oil and gas business from overseas. Hopefully, Q3, Q4, we'll see anywhere between 3,000 to 4,000 crores of oil and gas order come in," Uplenchwar said, adding that this had been factored into the company's overall FY27 order booking guidance of Rs 30,000 crore.
He said margins in the segment remained strong.
"For our oil and gas business, our margins tend to be in double digit at a PBT level," Uplenchwar said, noting that overseas transmission projects in select geographies yielded similar returns.
The oil and gas push forms part of a broader diversification strategy that has lifted the company's blended profit-before-tax margin to 6.6%, which Uplenchwar described as among the highest in the EPC industry.
Kalpataru's order book stood at an all-time high of Rs 66,607 crore as of Q1, with international orders accounting for nearly 40% of the total, he said.
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