A Sub $200 Million Market Cap German Drilling Company That Could Double
Let me start with this.
Most investors today are looking at the same stocks.
The same tech names.
The same mega caps.
The same headlines.
Meanwhile, there are companies with a market capitalization below $200 million that sit right in the middle of structural changes that will last for decades.
Dadrup is one of them.
If geothermal energy and district heating expand the way policymakers in Germany and neighboring countries intend, this is a business that could realistically double or even triple over the coming years.
Not overnight.
Not in one cycle.
But steadily, through execution and positioning.
Dadrup was founded in 1946.
It is headquartered in North Rhine-Westphalia.
It employs around 150 people.
The founding family still controls 58.36 percent of the shares.
This is not a story about disruption.
This is a story about drilling deep holes into the ground and building infrastructure that cities depend on.
And getting paid for it.
What Dadrup Actually Does
Dadrup is a specialized drilling services company.
They plan, execute, and manage complex deep drilling projects for:
Municipal utilities
Public authorities
Industrial companies
Energy providers
Their strength lies in handling difficult geological conditions and technically demanding environments.
Most of their projects run over several years.
That creates backlog.
That creates visibility.
That creates planning security.
This is not recurring software revenue.
But it is long-cycle infrastructure revenue.
And infrastructure does not disappear.
The Four Business Pillars
Geothermal Energy
This is the strategic growth driver.
Dadrup drills deep geothermal wells that supply hot water for district heating systems.
Their clients are mainly municipal utilities and energy providers that want to reduce their dependency on gas.
Germany is actively pushing cities to decarbonize heating.
Berlin.
Hamburg.
Munich.
Cologne.
Frankfurt.
All of them are working on heat transition plans.
Geothermal is one of the few scalable base-load solutions.
It requires deep drilling.
It requires experience.
It requires specialized equipment.
Dadrup has all three.
In recent years, government guarantees and subsidies have reduced exploration risk.
That makes projects financially viable.
More projects mean more drilling.
And drilling capacity is limited.
Water Extraction
This is the stabilizing pillar.
Dadrup drills wells for:
Drinking water
Industrial water
Thermal brine
Municipalities and industrial clients depend on reliable water supply.
This segment has existed since the company was founded.
It provides steady baseline revenue.
Exploration and Geological Services
This includes:
Mineral exploration
Geological surveys
Research drilling
Nuclear waste storage projects
These contracts are mostly awarded by public institutions.
They require high technical credibility.
Competition is limited.
Environmental and Infrastructure Services
This segment covers:
Closure of old oil and gas wells
Environmental remediation
Infrastructure-related drilling
Rail and road projects
Germany’s infrastructure is aging.
It will require massive investment.
Drilling work is often a prerequisite.
Dadrup operates directly in that field.
Geographic Focus
The company operates mainly in:
Germany
Austria
Switzerland
Benelux
These are stable jurisdictions.
Public budgets are strong.
Legal frameworks are reliable.
That matters in project business.
Ownership and Culture
The founding family owns 58.36 percent.
This creates long-term alignment.
Management is not chasing quarterly targets.
They are building operational capability.
I like that.
Financial Development
Let’s look at the key numbers.
Revenue:
2018 approximately 39 million euros
2024 over 54 million euros
Net result:
2018 minus 17 million euros
2024 plus 2.5 million euros
That is a real turnaround.
First half 2025:
Total output declined to 20.7 million euros
Previous year 29.1 million euros
Net profit increased to 2.14 million euros
Previous year 2.01 million euros
Margins improved despite lower volume.
Cash position mid 2025:
7.7 million euros
Debt ratio:
Around 11 percent
Price to book:
Around 5.9
This is not a leveraged balance sheet.
This is a conservative industrial balance sheet.
Dividend Policy
Dividend payments were irregular in the past.
There were years without payouts.
Since 2025, dividends have resumed.
That signals financial stabilization.
It is not the core attraction.
But it matters.
Why I Am Paying Attention Now
Three reasons.
First. Heating transition.
Gas is being phased out.
Cities need alternatives.
Geothermal is central.
Second. Infrastructure investment.
Germany must modernize roads, bridges, and utilities.
This requires drilling.
Third. Capacity bottleneck.
Drilling expertise is limited.
Dadrup owns capacity and know-how.
At under 200 million dollars market cap, this is not priced as a strategic infrastructure enabler.
If execution continues and geothermal scales, a doubling over several years is realistic. A tripling is possible under favorable conditions.
Not guaranteed.
But plausible.
🔒 Continue Reading
So far, I have described the business.
Now comes the part that determines whether this is investable.
Behind this section, I will analyze:
Valuation scenarios
Downside risks
Project cyclicality
Capital intensity
Equipment utilization
Competitive threats
My buy range
My exit rules
My position sizing logic
This is where theory ends and real investing begins.
If you value deep, independent analysis and concentrated thinking, this is for you.
Upgrade now to unlock the full thesis and portfolio framework.
How I Really Think About Dadrup:
