United Drilling Tools Ltd Q2 FY26 – From Oilfield Glory to Boardroom Drama: ₹5560 Lakh Sales, ₹572 Lakh PAT, and One Very Interesting Management Shake-Up
1. At a Glance
Ladies and gentlemen, welcome to the oil circus where the rigs drill deep and the boardroom drills deeper. United Drilling Tools Ltd (UDTL), India’s largest upstream drilling equipment manufacturer, just dropped its Q2 FY26 numbers — and oh boy, this one’s got all the masala: ₹55.6 crore revenue (up 75.6% QoQ) and ₹5.72 crore PAT, an EPS of ₹2.81, and a fair bit of boardroom reshuffling thrown in for free.
At ₹198 a share, this ₹405 crore market-cap company is playing in the heavyweight league of oilfield engineering, rubbing shoulders with ONGC and Halliburton (and occasionally, CBI too — but we’ll get to that spicy bit later).
With 74.6% promoter holding, a P/E of 26.7x, and a not-so-oily ROE of 5.79%, the stock’s performance has been flatter than a dry well — down 16.7% over the last year. But Q2 FY26’s performance shows flickers of life. Exports, ONGC orders, Vedanta deals, and a shiny ₹250–280 crore order book are the new fuel.
Still, investors can’t help but wonder — will UDTL’s profits finally gush like crude, or will the boardroom soap opera keep spilling the oil?
2. Introduction
United Drilling Tools Ltd is like that engineering student who knows everything about torque, friction, and pressure — but still ends up in HR trouble. Founded in 1985, this Noida-based manufacturer has built its reputation on delivering complex oil drilling tools, gas lift equipment, and heavy-duty connectors.
Over four decades, it has transformed from a modest supplier to ONGC to a global exporter, shipping to markets like the US, UK, and Singapore. The company proudly holds ~70% market share in India’s upstream drilling tools space — quite literally the “only one” in its niche.
But here’s the twist: while oil prices surged worldwide and E&P (exploration and production) budgets expanded, UDTL’s stock has underperformed badly. Why? Partly due to declining sales growth (-16.4% TTM) and partly because its operational rhythm has been as uneven as crude viscosity in winter.
And just when investors thought Q2 FY26 would be a quiet quarter, the company spiced things up: management reshuffle, CBI headlines, and a fresh set of multi-crore orders. It’s like the oilfield version of Sacred Games — drilling rigs, boardroom politics, and regulatory subplots, all in one frame.
3. Business Model – WTF Do They Even Do?
So, what does UDTL actually do — apart from keeping the press release section busy?
In simple terms, United Drilling Tools manufactures high-precision oilfield equipment used for drilling, extraction, and well operations. These aren’t your regular nuts and bolts — these are massive, multi-start casing connectors, wireline winches, and gas lift systems that determine whether a well gushes oil or sulks dry.
Product Divisions:
Connectors: The “Fast Make-Up High Performance Connectors” are the unsung heroes of drilling rigs — connecting casing pipes during exploration. UDTL’s designs are so specialized that they’re used in everything from offshore subsea rigs to onshore pile-driving projects.
Casing Pipes: The company supplies entire pipe systems — not just connectors — to giants like ONGC and Vedanta.
Wireline Winch Units: Used in both offshore and onshore reservoir operations, these winches are like the spinal cord of well intervention.
Gas Lift Equipment: For wells that need an artificial push (gas injection to lift oil), UDTL’s gear is crucial.
Downhole Tools: The company’s reaming tools and drill accessories make it possible to work across diverse rock formations.
With four certified plants in Noida and Gujarat and multiple ISO and API accreditations, the company combines domestic production prowess with export potential. ONGC, OIL India, Adani, and Schlumberger are all clients — basically, UDTL sells to the people who actually make oil happen.
So yes, while everyone tweets about crude prices, UDTL quietly builds the tools that make crude possible.
4. Financials Overview
Now let’s dive into the numbers — because nothing is sexier than a crisp table full of percentages and sarcasm.
Quarterly Results (₹ crore)
Metric
Q2 FY26
Q2 FY25
Q1 FY26
YoY %
QoQ %
Revenue
55.60
51.88
31.67
7.17%
75.6%
EBITDA
8.57
6.72
5.53
27.5%
55.0%
PAT
5.72
4.10
2.91
39.5%
96.6%
EPS (₹)
2.81
2.02
1.43
39.1%
96.5%
The revenue jump of 75% QoQ screams recovery, and the profit doubling shows operational efficiency is finally kicking in. But the YoY growth (just 7%) is still underwhelming, reminding us that one strong quarter doesn’t make a drilling season.
Margins improved to 15.41% (up from 13.6% last quarter) — maybe because ONGC finally started paying on time.
5. Valuation Discussion – Fair Value Range Only
Alright, let’s crunch some numbers before the oil cools.
EPS (TTM): ₹7.46
Industry P/E: 34.5x
UDTL P/E: 26.7x
So, fair value range (based on relative valuation):
Lower Band (25x) → ₹7.46 × 25 = ₹186
Upper Band (35x) → ₹7.46 × 35 = ₹261
Now, EV/EBITDA check:
EV = ₹432 crore
EBITDA (TTM) = ₹27 crore
EV/EBITDA = 15.8x
Peer median = ~18x → gives a fair value range of ₹200–₹250.
And finally, DCF sanity check: Using 10% discount rate and modest growth (since oilfield cycles swing harder than a pendulum), fair range lands between ₹190–₹260.
