The Hindu Business Line : Quiet accumulation seen in Dolphin Offshore

The Dolphin Offshore Enterprises India stock has been witnessing quiet accumulation by a set of investors, who are betting on the company's unfolding business development plan.

The stock closed at Rs 268.25, up over a per cent, on the BSE after touching a day's high at Rs 273.

In the last one month, the stock gained by over 9 per cent.

Marine logistics

The company is making an entry into marine logistics business through the acquisition route and also expanding its offshore services assets.

So far, it has been providing full range of underwater services to the offshore oil and gas industry in India and abroad (Indonesia, Thailand and Seychelles). It has also been providing ROV services on ONGC drillships since 2000.

Dolphin Offshore owns equipment for air, mixed gas and saturation diving; under water welding and cutting; NDT inspection, CCTV and hydraulic equipment; and air lift equipment.

The company has over 20 years of experience in managing, operating and providing crew for various vessels.

It also conducts marine load-out, sea fastening and marine transportation operations, deploying various types of vessels including dumb barges, tugs, and offshore supply vessels.

Acquisition at Rs 13.5 cr

According to market analysts, implications of Dolphin's acquisition of Procycn Offshore Services, a private company owning 7 port-based tugs and one utility vessel, have been understood by a few on Dalal Street.

On Thursday, the company wrapped up the acquisition at a cost of Rs 13.50 crore.

Industry analysts said that apart from expansion into a related business, this acquisition would provide additional asset depth, which could be helpful for the company in leveraging balance-sheet on an expansion mode.

"Marine logistics is a stable business with decent margins. The acquisition would also give tax advantage as in the shipping logistics and offshore businesses, asset additions provide cushion from taxation on fluctuating incomes, dependant on international tariff cycles," a shipping expert commented.

Last May , Dolphin purchased a second hand anchor handling tug and one supply vessel for its offshore services business.

Industry insiders said that the company was apparently following a two-pronged expansion strategy. Some market players expect acquisition of a few more offshore vessels by Dolphin this financial year.

Dolphin also has well equipped fabrication yards, located just outside Mumbai. These provide turnkey onshore and offshore fabrication and installation services.