United Drilling Tools Limited

Energy — Oil & Gas Equipment & Services · NSE

₹200.80+₹2.29 (+1.15%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by moderate debt load, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of United Drilling Tools Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

United Drilling Tools Limited, together with its subsidiary, manufactures and sells OD connectors and casing pipes, wireline winches, gas lift equipment, and downhole tools under the UDT brand in India and internationally.

IndustryOil & Gas Equipment & Services

SectorEnergy

Employees171

Annual revenue₹181 Cr

How does it make money?

Turns over ₹181 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 171 employees supports ₹1.06 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.06 Cr

Who are its competitors?

The closest listed comparisons in its industry are RELIANCE INDUSTRIES LTD, OIL AND NATURAL GAS CORP., BHARAT PETROLEUM CORP LT, INDIAN OIL CORP LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 10.4% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.4%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +53% while net margin moved +21% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+53%

Margin effect+21%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.79 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal

Quality vs. Valuation

Company Quality

69/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

65/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

19.9x

3Y Median

44.4x

40 monthly readings · mean 40.2x · range 19.9x–57.7x

Sector Median

6.9x

median of 4 sector peers

🟢Current valuation is approximately 55% below its 3y median of 44.4x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 190% above the peer median of 6.9x.

vs. its own history

Cheap

44.4x median over 40 months · -55%

vs. sector peers

Expensive

6.9x median of 4 peers · +190%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.9x

PEG

0.88

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 16.3% to 19.1% over 3 years.
Debt is being paid down
Total debt is down 36% over 3 years.
Cash generation is improving
Free cash flow is up 37% over 3 years.
Return on capital is rising
ROCE has improved from 6.0% to 10.4%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 watch

🟡Receivables growing faster than salesFinancial
Receivables up 93% against revenue up 53% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 16.3% to 19.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 36% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 55% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 93% against revenue up 53%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 190% above the peer median. That premium needs a reason that persists, or it closes.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 11% a year✓ 15.3% CAGR
Latest reported year was 8.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 17%✓ 19.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹35 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 10.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹408 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

19.9x

Fair

Fairly valued against the generic band

P/B Ratio

1.42x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹10.09

Profitable

Profitable on a per-share basis

ROE

6.8%

Weak

Weak capital efficiency

ROCE

10.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.15x

Moderate

Moderate leverage

Revenue Growth (YoY)

8.9%

Modest

Modest growth

Profit Growth (YoY)

47.6%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.20%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹35 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

17.8%

Good

Healthy core-business profitability

Net Margin

11.0%

Good

Strong bottom-line conversion

Current Ratio

10.05

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.79

Defensive

Steadier than the market

52W Range Position

43%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

222.7 / 224.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

27.6

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹118 Cr	₹130 Cr	₹168 Cr	₹181 Cr	+15.3%
EBITDA	₹19 Cr	₹21 Cr	₹27 Cr	₹34 Cr	+21.3%
EBITDA Margin	16.3%	16.3%	16.2%	19.1%	—
PAT (Net Profit)	₹10 Cr	₹9 Cr	₹15 Cr	₹19 Cr	+22.7%
EPS	₹5.03	₹4.63	₹7.38	₹9.4	+23.2%
ROE	4.2%	3.7%	5.7%	6.8%	—
ROCE	6.0%	6.2%	8.2%	10.4%	—
Total Debt	₹5 Cr	₹33 Cr	₹32 Cr	₹3 Cr	-13.6%
Free Cash Flow	₹26 Cr	-₹22 Cr	₹6 Cr	₹35 Cr	+11.0%

🟢 Revenue has grown at 15.3% a year over 3 years.

🟢 EBITDA has grown at 21.3% a year over 3 years.

🟢 EBITDA Margin has risen from 16.3% to 19.1% over 3 years (+2.7 pts).

🟢 PAT (Net Profit) has grown at 22.7% a year over 3 years.

🟢 EPS has grown at 23.2% a year over 3 years.

🟢 ROE has risen from 4.2% to 6.8% over 3 years (+2.6 pts).

🟢 ROCE has risen from 6.0% to 10.4% over 3 years (+4.4 pts).

🟢 Total Debt has shrunk at 13.6% a year over 3 years.

🟢 Free Cash Flow has grown at 11.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹308 Cr

Total Liabilities

₹28 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹39 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

82.9%

Corporate Actions

Dividend Rate

₹2.4

Ex-Dividend Date

16 Sept 2026

Peer Comparison

Company	P/E	ROE
RELIANCE INDUSTRIES LTD	21.9x	8.3%
OIL AND NATURAL GAS CORP.	6.4x	11.7%
BHARAT PETROLEUM CORP LT	7.3x	17.1%
INDIAN OIL CORP LTD	5.3x	15.4%

Recent News

1 positive2 mixed3 general

United Drilling Tools Share Price Fall: Key Valuation View

Univest, 12 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

United Drilling Tools Bags ₹38.85 Crore Vedanta Order

HDFC Sky, 02 Jul

United Drilling Yearly Results, Financial summary, United Drilling Yearly Earnings

The Economic Times, 16 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

United Drilling Tools Limited (NSE:UNIDT) Goes Ex-Dividend Soon

Simply Wall Street, 12 SeptCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

United Drilling Tools moves up 13.5% after bagging high-value order from ADiL

Alice Blue, 08 Apr

United Drilling Tools shareholders pass all six AGM resolutions

scanx.trade, 23 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Valuation

MiddlingProfitability · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

All 5 tripwires holding · see Key things to watch ↑