Seamec Limited (Seamec) was incorporated on Dec 29th, 1986, with the name of Peerless Leasing Pvt. Ltd. The Technip Group holds
78.24% stake in Seamec ltd. The Company's principal activity is to provide support services including marine, construction and diving services to offshore oilfields in India and abroad.

Seamec operates 4 multi? purpose support vessels (MSV) for diving and provides underwater/subsea engineering and construction, maintenance, inspection of under? water structures, rescue? operations and fire? fighting and other support services for offshore oil/gas installations located in India or abroad

Seamec is a debt free company. The company has cash balance of Rs. 63.5 crs as of December 2008 as compared to Rs. 60.72 crs in Q2 CY08 The company reported strong growth in revenues of 65.3% to Rs. 100.38 crs in Q2 CY09

Seamec reported an EPS of Rs. 17.5 for Q2 CY09 as compared to Rs. 7.19 in Q2 CY08

The company is currently trading at a P/E of 2.45x based on its H1 CY09 annualized earnings Seamec has a ROE of 14.6% for CY2008 as compared to
13.5% for CY2007

Based on CY 2008 earnings, Seamec is currently trading at a P/BV of 2.01x, EV/EBITDA of 1.2x, EV/ Sales of 0.94x and Market Cap/ Sales of 1.65x

Seamec Limited was incorporated on Dec 29th, 1986, with the name of Peerless Leasing Pvt. Ltd. In the year 1999, Coflexip Stena Offshore Mauritius Ltd. acquired its 58.24% of shares. In the year 2001 Technip Group of France acquired Coflexip Group. Hence SEAMEC ltd. became a subsidiary of Technip group. The Technip Group holds 78.24% stake in Seamec ltd. The Company's principal activity is to provide support services including marine, construction and diving services to offshore oilfields in India and abroad. SEAMEC specializes in vessel management, marine management, Dive support, fire fighting, subsea construction, ROV support, pipe laying, rescue operations, logistics, mooring & demooring, carnage.

SEAMEC operates multi? purpose support vessels (MSV) for diving and provides underwater/subsea engineering and construction, maintenance, inspection of under? water structures, rescue? operations and fire? fighting and other support services for offshore oil/gas installations located in India or abroad. Hence it is a pure play of charter hiring of MSVs, which are more specialized vessels than Offshore Supply Vessels (OSV) as they are equipped with Dynamic Positioning (DP) system and can go underwater for repair & maintenances of underwater pipelines. At present company owns 4 multipurpose support vessels.

o SEAMEC I

o SEAMEC II

o SEAMEC III

o SEAMEC PRINCESS

Industry Analysis

Given the sharp slowdown in world economic activity on account of the credit crisis. World GDP is expected to shrink by 2.9% in 20009 as compared to growth of 3.8% and 1.9% in 2007 and 2008 respectively. Going forward the World Bank expects world GDP growth rate to be approximately 2.0% in 2010 and 3.2% in 2011. Whereas the World Bank expects the growth in US to be 1.8% in 2010 and
2.5% in 2011 as compared to ?3.0% contraction expected for 2009. Euro zone is expected to contract by 4.2% in 2009. However it is expected to witness modest growth of 0.5% in 2010 and 1.9% in 2011.

The global oil exploration spending cycle has been on an up? turn since 2004 trailing the steady rise in crude oil prices during this period. Higher crude oil prices led to a heightened interest in exploration, with huge investments made even in deep and ultra deep sea oil exploration. Average crude Brent oil prices reached record highs in 2008 moving from US$ 91.9/ bbl in January 2008 to US$ 133.9/bbl in July 2008. However prices have cooled off in the and where approximately US$ 41.6/bbl by December
2008, as petroleum products demand contraction lowered the demand for crude oil. This has led to drop in additional investment in exploration particularly offshore and deepwater exploration less attractive for players. Going forward, global exploration activity is expected to slow down as compared to sharp increase in exploration budgets announced by the global oil majors earlier.

However given that the below mentioned countries comprise a significant proportion of total world oil demand and with the economic activity expected to pick up globally. Demand for crude oil is expected to recover from 2010 to 84.6 mbpd as compared to expected decline in demand to 84.2 mbpd in 2009 from 85.6 mbpd in 2008 We believe with demand for crude oil expected to be rebound, demand for rigs will witness strong demand trends going forward thereby increasing demand for multi support vessels.

Investments in new rig built up have not kept pace with the rally in crude oil price seen in the past few years. With incremental oil exploration increasingly moving into the offshore frontier at the deep and ultra deep water depth. Offshore rigs experienced a surge in demand and rising rig rates. Another constraint in easing off the rig supply has been the ageing rig fleet. More than 60% of the active rig fleet is above 20 years of age. Therefore a great deal of additions to the existing fleet has gone into replacement of older rigs, leading to continued tightness in the markets so far. This is evident by the fact that rig utilization rates peaked at 88% in 2007 and stayed at those levels despite significant new additions to the total fleet. Rig utilization rates, the past two years have been steady indicating inadequate addition to the rig fleet and thus tightness in the rig markets going forward.

Quarterly Result Analysis:

o Seamec declared strong set of results for Q2 CY09. The company reported strong growth in revenues of 65.3% to Rs. 100.4 crs

o The company reported an operating profit of Rs. 63.93 crs in Q2 CY09 as against an operating profit of Rs. 30.31 crs in Q2 CY08. Boost in operating profit is due to sharp decline in Other Expenses and Consumables and spare costs. Other expenses declined to Rs. 5.27 crs in Q2 CY09 as compared to Rs. 10.72 crs in Q2 CY08. Whereas Consumables and spare costs declined to Rs. 3.62 crs in Q2 CY09 as compared to Rs. 5.99 crs in Q2 CY08

o Depreciation expenses increased by 6.1% to Rs. 6.97 crs in Q2 CY09 as compared to Rs. 6.57 crs in Q2 CY08

o Other income stood at Rs. 3.31 crs in Q2 CY09 as compared to Rs. Rs. 0.94 crs in Q2 CY08

o Seamec reported PAT of Rs. 59.89 crs in Q2 CY09 as compared to Rs. 21.89 crs in Q2 CY09

o The company reported an net margin of 59.7% in Q2 CY09 as compared to 36.1% in Q2 CY08

Valuation Analysis

Seamec has recently added "Seamec Princess" to its fleet. The company incurred capital expenditure of approximately US$ 36 mn for acquisition of the vessel. Seamec Princess is expected to fetch higher day rates of approximately US$ 65000 to US$ 70000. This we believe would give a boost to the revenue and earnings of the company going forward. Currently all the 4 vessels of Seamec are under contract with the clients. Based on which the company delivered strong set of results in Q2 09.

The company has long term contracts in place for its Seamec -I and Seamec - II with Dolphin Offshore
(India) and Dulam international Ltd. (Dubai) respectively. However the other 2 vessels Seamec - III and Seamec Princess are on short term contracts only. With the expected tightness in the rig market, the company should witness demand for its vessels going forward. Seamec is currently trading at a P/E of
2.7x its Q2 CY09 annualized earnings.