Our fair value for the stock reduces to Rs 166/share (10x Mar 20E EPS) from Rs 312/share. Koral Energy International terminated the five year O&M; contact awarded to Asian Oilfields 100% subsidiary Asian Oilfield & Energy Services DMCC (ADMCC) in Feb-17. This came in as a major negative surprise. The prime reason for contract cancellation is to reduce operating cost.

Our fair value for the stock is Rs 312 (10x Sep 19E EPS). Post the acquisition and change of management from Samara Capital to Oilmax Energy in August 2016, Asian Oilfield Services (AOS) has undergone a complete transformation. The company witnessed infusion of funds by the new promoters, and debt repayment of Rs 270mn. Also, reconciliation and settlement of old outstanding dues payable/ recoverable resulted in a cleanup of the balance sheet. The new management has focussed on ramping up domestic as well as overseas work contracts worth Rs 12.5bn.