Jindal Drilling 'Shaping Up For Positive Cycle' On Crude Tailwind: SEBI RA Rajneesh Sharma

Jindal Drilling is “shaping up for a positive cycle,” citing rising crude oil prices, the completion of the Jindal Pioneer acquisition, and a strengthening technical chart setup, according to SEBI-registered analyst Rajneesh Sharma.

At the time of writing, shares of Jindal Drilling were trading at ₹672.50, up 0.6% on the day.

Sharma noted that Brent crude has risen approximately 11–12% in recent weeks to around $86–$87 per barrel, up from $77, and said offshore rig demand is positively correlated with sustained crude above $80. 

He added that management confirmed in its Q4 earnings call that rising crude supports upstream capex and rig demand.

At a current market price of ₹666, Sharma pointed to the company’s PE of 8.90x, ROE of 15%, and ROCE of 16.41%. 

Gross debt stood at ₹164 crore as of March 2025, but Sharma highlighted that liquid investments of ₹606 crore and ₹151 crore in loans to JV offset this, confirming management’s net cash position of approximately ₹110–131 crore as “accurate.”

He said the Jindal Pioneer acquisition, closed on March 5, 2025, was fully funded through internal accruals with no new debt and a deferred payment structure to be completed within one year. 

Sharma added that part of the earnings impact is already reflected in Q4FY25 results, with PAT at ₹53 crore and EPS of ₹18, up from ₹17 in the third quarter (Q3), and that full impact will be visible from the first quarter (Q1) of FY26 onward.

He cited an orderbook of ₹1,791 crore as of March 31, with ₹898 crore allocated for FY26, which management described as “conservative.” 

Rig-wise contract rates include Jindal Supreme at $88,859/day, Virtue-I at $80,633/day, and Jindal Pioneer at $36,500/day, rising to $40,000/day from July.

On pricing, Sharma said management attributed low rates in ONGC’s last tender to “competitor desperation,” which it does not expect to repeat.

He said management is targeting over $60,000 rates in upcoming tenders and confirmed efforts to diversify beyond ONGC into the Middle East and Mexico.

Sharma noted that management confirmed a strong, though indirect, correlation between crude prices and Jindal Drilling’s earnings, citing historical parallels with the 2017–2018 upcycle, when crude prices above $80 drove over $60,000 global rig rates.

On technicals, Sharma identified a descending triangle pattern on the weekly chart with support at ₹573–600. 

He said the stock is bouncing from this zone with strong volume and added that a breakout above ₹686 would open upside targets of ₹784 and ₹862, while a failure could trigger a retest of support or a decline to ₹500.

Sharma said the PEG ratio stands at ~0.74 and called the stock “undervalued and high-quality,” noting a fair price estimate of ₹1,315 and a 50% margin of safety.

The stock has declined 15.2% so far in 2025.

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