Oil Country Tubular Ltd Q2 FY26 – When “Pipe Dreams” Become Pipe Nightmares (₹10 Cr Sales, ₹-21.6 Cr PAT, -63.9% Profit Collapse)

1.At a Glance

Oil Country Tubular Ltd (OCTL) – once the proud supplier of drill pipes to the oil gods – is today a ₹334 crore market-cap zombie dragging its pipe factory through losses thicker than crude oil sludge. The Q2 FY26 numbers looked like a low-budget horror film: ₹10 crore in sales, down55% YoY, and a₹21.6 crore net loss, plunging 63.9% deeper than last year’s already bleeding quarter. The stock, currently marooned at ₹64, has fallen 20.8% in 3 months and barely moved in a year (-0.64%), as if investors have accepted its fate like a tired rig worker waiting for his shift to end.

Debt is under control (₹24.9 crore), but returns are negative everywhere —ROE -15%, ROCE -8.4%,and interest coverage ratio of-12.2, which basically means: “Dear bankers, please don’t call.” Promoters still hold 56.7% (with 49% pledged, of course, because why not), and their dreams of a turnaround are about as believable as a PSU power company’s deadline.

But hey, operating margin is32.3%, which looks fancy till you realize the company made a “profit” mostly on paper, not pipes.

2.Introduction – The Drill That Lost Its Thrill

Once upon a time, Oil Country Tubular Ltd was the “Brahmastra” of India’s oil exploration industry. Founded in 1985 under the Kamineni Group, it was supposed to manufacture the backbone of the drilling business: casings, tubings, and drill pipes. You know — the very things that go underground so oil can come up.

But then, the 2010s happened. The oil cycle went into cardiac arrest, global drill demand fell, and OCTL joined the long list of companies that started attending NCLT meetings instead of board meetings. Between2020 and 2022, it spent nearlythree years under CIRP, a corporate ICU where companies go for “revival” but mostly come out with bandages and amnesia.

Post-revival, OCTL tried to act like it was back in business — even applied for delisting from BSE (without an exit option, because who needs shareholders, right?). NSE still lists it, though, like that one friend who refuses to leave the group chat.

So now, we have a company making ₹10 crore in quarterly sales but still proudly holding onto a ₹334 crore market cap. If optimism had a face, it would be holding a drill pipe painted gold.

3.Business Model – WTF Do They Even Do?

OCTL’s business is as tubular as its name — it manufactures and processesOil Country Tubular Goods (OCTG), which includecasing, tubing, drill pipes, tool joints, couplings, pup joints, and reconditioned oilfield accessories.

Basically, they make the metal pipes that go into oil wells — the kind of stuff that makes money only when the world is drilling furiously.

They also dojob work(37% of FY23 revenue) — re-threading, reconditioning, inspection, and internal coating — which sounds impressive until you realize it’s like a car mechanic trying to survive on reboring old engines while no one’s buying new ones.

Theirproduct revenue share in FY23was:

• Drill Pipe & Allied Products:55%
• Other Sales & Services:45%

Also, FY23 revealed the mother of all accounting punchlines —Other Income was 525 times operational income.That’s right, they earned more from “other” things (probably one-time items or revaluation) than from actual business.

So what’s the business model now? Imagine an oil pipe company where the pipes are fine, but the oil industry stopped calling.

4.Financials Overview – The Q2 FY26 Autopsy

Figures in ₹ Crores

Commentary:The September quarter results look like a rig that exploded mid-drill. Sales halved, EBITDA went negative, and PAT nosedived into red territory deeper than an