Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Great Eastern Shipping Company Ltd (NSE: GESHIP) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
G Shivakumar — Executive Director and Chief Financial Officer
Unidentified Speaker
Rahul Sheth — General Manager
Analysts:
Unidentified Participant
Vikram Suryavanshi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and thank you for standing by. Welcome to the Great Eastern Shipping Co. Ltd. Earnings call on declaration of its financial results for the quarter ended 31 March 2026. At this moment all participants are in listen only mode. Later we will conduct a question and answer session. I now hand the conference over to Mr. Shivakumar, executive director and CFO. Thank you. And over to you sir.
G Shivakumar — Executive Director and Chief Financial Officer
Thank you, Yashastri. Good afternoon everyone and welcome to the conference call for the results of Q4 and full year FY26. We’ll quickly run through the presentation so that. And try to leave as much time as possible for the Q and A. Sorry, customary disclaimers apply. We don’t forecast the market. We have a lot of our capacity on the spot market. So we don’t give earnings outlook. We are discussing what we are seeing in the market and so please take it as such. The highlights of course is that this is our best ever quarter in terms of profits.
It is also the best ever year in consolidated profits. For the first time we crossed a thousand crores in consolidated net profit for a year. Some of it as a result of the exchange rate movement during the quarter. Our NAV continues to move higher moving by about 200 rupees between end of December and end of March. And we’ve also declared our highest ever quarterly dividend of 11 rupees 70 per share. Taking the total dividend for the year to 35 rupees 10 paisa per share. You’ve seen the results.
I won’t go too much into the results. Later on we can. If you have any specific questions, we can go to them. Yes sir. Yeah, going to. I already mentioned the net asset value. So you can see on a standalone basis we were at about just over 1100 rupees a share in March last year. And now we’re at 1422. That’s a 300 rupee improvement. So we’ve had significant movement in asset prices. And of course we have a lot of cash accruals in the group. Similarly for the consolidated NAV as well. Looking at what’s happened with the business, the event, the big event of course which told the headlines was the Strait of Hormuz issue.
We’ll not spend too much time on this. Suffice to say that because of the disruption trade patterns were all over the place. Literally and which resulted in a tightness in the tanker markets. And therefore we saw a spike in rates in March and April for crude and product tankers and also for LPG ships. However, markets were tight even before that. Tanker markets for the crude tankers were pretty strong all the way from December to February, even before this issue happened. So because of the scramble to source cargoes, oil cargoes from wherever they were available, we saw a lot of long haul trades replacing the Middle east to Asia trades.
So we had sourcing from the Atlantic Basin, which is the swing provider of barrels, which had to then come long haul all the way to Asia. And that resulted in a big spike in demand for ships, therefore a big spike in the freight rates. As a result, asset prices also went up. We’re looking at about 10 to 20% increase during the quarter. The order book continues to be at around 20%. We’ve seen the crude tanker order book build up a lot in the last three to six months. Dry bulk was, while not seeing the excitement of the tanker space in March was steady and had an unusually strong quarter, if only in the context of Q1 of the calendar year being seasonally traditionally very weak.
So the rates were quite, quite remunerative during the quarter across the board, especially for Cape sizes going to lpg. Again, LPG rates have been pretty strong and they got stronger towards the end of the quarter. Again, the marginal provider of LPG barrels is the United States. And so a lot more demand for LPG to move long haul from US to Asia. I already mentioned what happened to asset prices during the quarter. And you can see that in the charts, the order book I already mentioned. So we are at around 20% for crude tankers and product tankers plus minus a couple of percent.
LPG continues to be high at 27% and dry bulk is at 13%. This is just a comparison of the order book to the scrapping potential, which is how many vessels have become overage. And you can see that it’s for the tankers, it’s pretty close. Tankers and dry bulk. It’s only the LPG where the order book is very heavy as compared to the old ships. This is just a year wise depiction of this. So the supply is actually kicking in for crew tankers and product for crew tankers in Cal 27 and Cal 28. Now scrapping again, as one would understand, this is nobody scrapping ships really because markets are so strong.
Coming to the drilling business, this is the data on jackup utilization. The March 26 data includes data of all the rigs which are on contract in the Middle east where rigs were put on standby, they have been taken as continuing on contract also. This is what is called, this is the simple utilization. We have another measure called marketed utilization which is rigs which are being marketed actively for contracts. That utilization continues to be somewhere around the 84 to 85% mark. This is the usual sheet that we show.
There is very little new building activity in the rig space and therefore there’s a very large old fleet which is an overhang for the markets. This is the shareholding pattern. I won’t go into it too much. Also the fleet data and the tcwise return on equity continues to be strong. Return on capital employed continues to be strong. You can see what’s happened with the EPS for the last four years. So in excess of 150 rupees per share. And of course cash generation has always been strong in our business.
Even when the markets are very weak. It’s a cash flow generating business. The chart on the bottom left hand corner shows the movement in net asset value over the last five years. Just to depict how much of a contribution has come from cash flows and how much actually from fleet change. And we keep emphasizing this because when we say nav, the first thought is this is because of the hot market where it’s a mark to market gain and if the market goes down again all of this can again be lost. However, this is to emphasize that a lot of the NAV change has come from cash profits from cash flows from the ships and not much of it is actually from the fleet value change.
This is on a five year basis. Again, share price to net asset value we were at 0.8 or so. On a consolidated basis we continue to pay dividends. Even in the weak markets we were paying some dividends but we have of course upped the dividend significantly in the last four years. We continue to be heavily net cash, $500 million standalone on net cash basis. We are doing our switch transactions and you would have seen that in the S and P transactions we are selling some of our older ships and replacing them with similar ships of more newer similar ships.
Those are what we call the switch transactions. We still have some debt because we can’t prepaid, but these are the repayment schedules for our debt. As of March 31st we had 157 million of debt in the group and that will be out within the next two years or so. The repricing of offshore assets and the orange bars are what interests a lot of you. These are our rigs which have to come up for repricing. We have three rigs coming up for repricing in this financial year, one of which has already completed her contract.
It was a short term contract and she is awaiting her next business. We have two which will come off in the second half of the financial year. So we will have to look for business for those rigs. On the vessels front. Most of our capacity is locked in for this year. I think 80% of our days for this year have already been locked in on the vessel side. The rest is data for you to look at your leisure. This is not specifically related to this quarter. I’m happy to take questions. I have Rahul Sheth with me and we are happy to take any questions that you may have.
Thank you.
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may click on the raise hand option available on the toolbar. You may also post your text questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from V B from Honesty and Integrity Investment. Please go ahead.
Unidentified Speaker
Yeah, hi, can you hear me sir?
G Shivakumar — Executive Director and Chief Financial Officer
Yes, please go ahead.
Unidentified Speaker
Yeah, thanks. Thanks a lot for providing the opportunity. So firstly you want to address the important things that are geopolitically. So I know you know the outcome of whatever is happening, nobody can. But in both the situations like improbable outcome where everything normalizes whenever it happens, do you think the markets will are likely to pan out in terms of whether these inefficiencies might continue for some time or, or do you think, do you think the, you know, the situation can normalizes pretty quickly.
And in the other scenario where things will normalize, how do you think the markets will behave? Will the. Because ultimately, you know, slowly the inefficiencies will come out in the sense that there will be tankers who will find ways to come out of state of coolness to be available available on the other routes slowly, instantly. So do you think the rates will, might behave after some time? If the situation continues on the other rates might go down. So what’s your assessment in both the scenarios?
Whatever way it happens?
Questions and Answers:
G Shivakumar
Okay, so if I can just recap your question so that we’ve got it correct because you’re not very clear at the start. You want to know what can happen under different scenarios of a reopening of the strait of hormones, right?
Unidentified Speaker
And if it doesn’t open, if it doesn’t open also, what’s, what’s the outlook? What how do you change the outlook? What. How it’s going to pan out?
Rahul Sheth
So, you know, to provide an outlook on exactly how the markets will behave in either situation is very complicated. As you can imagine. We are also witnessing this probably for the first time, you know, since maybe the 1980s. You know, to just give you a bit of a perspective, the closing of the Strait, where a large percentage of especially the oil trade and the LPG trade comes from, has resulted in a lot of disruption in the market because countries that relied on the cargoes coming from the region have to now source cargoes from other regions.
To just to give you a simple example, if India was procuring LPG or oil from the Middle east, now if they have to procure it from either US or Latin America or some other region, the distances go up significantly, which is what led to a tightening of the market after the strait had shut. And even if you look at it, if, even if you take a scenario where the strait opens up, then you will have a flurry of Middle Eastern cargoes. Lot of the ships are not in the Middle east anymore because they’ve moved out to get cargoes from elsewhere.
So generally, the rates will have to strengthen to pull ships back into that region. Now, all of this is difficult to really forecast because, as you can imagine, there are many, many factors to consider to give such a scenario. And therefore, we believe that giving this exact scenario analysis and saying if it remains shut, this will happen, if it opens up, this will happen, is honestly a very difficult game to predict. So I think we will not be able to provide such a, you know, maybe the kind of accurate answer or the kind of, you know, outlook that you wish to see.
Yeah,
G Shivakumar
It’s in the nature of guesswork, really. Yes, and anybody’s guess. So you mentioned inefficiencies when you ask your question. Yes, this is going to be very inefficient. Now, how that plays out in terms of rates, it’s tough to say.
Rahul Sheth
You know, I can just give you one more perspective. After sourcing a lot of LPG cargoes from the U.S. There are so many LPG vessels, and not just for India, for many other countries. There were so many LPG vessels and other category of vessels that were trying to pass through the Panama Canal that the congestion in the Panama Canal has gone up because now everyone needs to pass through it to get American cargoes to come to the east because, you know, it’s the shorter route to go through the canal.
Now, all these factors to forecast, you know, which one will Play out to what level of strength or negative is very difficult to, you know, actually put down and give you. Okay, this is exactly what may happen eventually. Like Khausiv mentioned, this is in the area of just guesswork. And, you know, our guess will probably be as good or bad as yours.
G Shivakumar
And the way we approach it, while you have not asked the question, the way we approach it in such a volatile situation is we are prepared for whichever scenario happens. We have a very large proportion of our fleet in the spot market, as always, so we are in a position to take advantage if there is market strength. And as we have collected so much cash and we are waiting to invest, if the markets go the other way, we are there to invest as well as an opportunity
Unidentified Speaker
So connected to this. Let me ask you one more specific question. So in terms of the capacity of, you know, crude and product tankers that are stuck in, in hormones and not able to, to sail versus the barrel that has been cut out from the market because of the supply going, going off, I mean, do they match or there are larger. I mean, the cargo that the vessels can carry that are stuck is much larger than the mirrors that are.
G Shivakumar
So the capacity of crude tankers which is stuck inside is about 5%. The capacity of product tankers stuck inside, maybe 2%. And similar for LPG, the proportion of cargoes which are stuck because of this closure is much higher than this. So while it reduces the impact slightly, it is not similar in numbers.
Unidentified Speaker
Okay, got it. Understood. Okay, that’s it for Maze. Just remember
Rahul Sheth
One thing. You know, it’s not just on supply demand. You have to also look at T mile impact, which is what I was alluding to earlier, because now ships are sailing much longer distances to get the cargoes from further away. And remember, because of the changing trading patterns, at least up until now, we’ve seen a lot of inefficiencies in that, which is what had supported the market.
Operator
Thank you. We’ll take the next question from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Unidentified Participant
Thanks a lot, team, for the opportunity I had. You know, two questions. The first question, you know, with respect to shipyard capacity. So if I’m not wrong, there was news flow around, you know, at the start of the war with respect to shipyard delaying the delivery of ships which could obviously, you know, help on the supply side. So a, you know, is that true? And B, you know, how should we look at the shipyard capacity now versus what it was earlier? So what this order book, you know, could, could look very high.
But to think about the slippages that would happen would be very good to hear your perspectives.
Rahul Sheth
At least as of now, we have not seen any significant data on the slippages. So, you know, meaning yards have taken a lot of orders and it, you know, they’re still to be delivered. And it is possible slippages do happen, but at least as of now, we don’t envisage such big slippages that it may change the dynamic of the market. Was there a further question to this or. No, that was good. So
Unidentified Participant
That was. Yeah. And the second question that I had was with respect to, you know, the oil demand stock that’s there with various countries. So, you know, given the fact that we’ve seen, you know, so much cargo actually being stuck in state of Hormuz, so even whenever it opens. Right. Is it safe to say that because most of the countries are at the lower end of their inventory of crude, we will see a continued demand through the year. So whichever scenario, it’s only going to mean for stock building.
Yes.
Rahul Sheth
So, you know, again, we can just guess that countries may want to replenish their stocks. Having said that, the US spr, which has been talked about a lot, it used to be at the 700 million mark. It had come down to maybe 4,50 million just before this current war. Now they’re drawing down on it, but they never took the 400 back to 700. But counter to that, countries like China had built up stock. So one would have logically expected us to go back up and China not to build more, you know, because they already had a lot of stuff, but us didn’t go back up.
But China built a lot more stock. So, you know, just to take it, you know, just to use common sense, I would assume that countries will go back to stock building, but we’ll have to see how they play it.
Unidentified Participant
Got it? Yes, please.
G Shivakumar
Yeah. You know, when the container squeeze happened in 21 just after Covid, people were saying that consuming countries will move from just in time to just in case. So trying to build resilience, maybe that’s something that commodity consuming areas will want to do as well.
Unidentified Participant
Got it. No. Thanks a lot for this and all the best.
G Shivakumar
Thank you.
Operator
Thank you. Next question is from Amit Khetan from Laburnum Capital. Please go ahead.
Unidentified Participant
Hi, thank you for taking my question. So if I look at your slide 25, right where you have the revenue days, that looks about 5 to 6% lower than what it should have been, I’m guessing we’ve lost some Revenue days on account of our ship being stuck in the state of Hormuz. Is that correct? And what is the situation currently?
G Shivakumar
Sorry, one moment. Yeah, so we had revenue days also as a function, little bit of a dry dog. We have
Rahul Sheth
A similar revenue days.
G Shivakumar
Are you
Rahul Sheth
Looking at this data?
G Shivakumar
Is this a slight. Yeah, yeah,
Unidentified Participant
I’m talking about this data. The own tonnage number.
G Shivakumar
Yeah, I think this is just fleet changes during the period because the fleet is might have changed a little bit during the period. Also you could just have timing differences in dry docks. If you had a couple of extra dry docks this year versus last year, that could be. I mean, one extra dry dock can easily account for this 20 days because we haven’t really grown in capacity. Right. So that extent you’ll find some changes. You’ll find these movements on a quarter. On quarter basis.
Unidentified Participant
Got it. And currently, do we have any ships stuck in the Gulf?
G Shivakumar
We do have two ships that are waiting to come out. One is an owned ship and one is an unchartered ship that are waiting to come. Okay,
Unidentified Participant
And would these be earning revenue or not?
G Shivakumar
We don’t want to. One of them is on void charter. One is on time charter. Some of these are. Some of these are sensitive so we won’t go into that. But typically time charter ships will continue to earn revenue because it depends on the time. Avoid charter ship. The time is on our account.
Unidentified Participant
Okay, okay, fair enough. Secondly, given the rates that we’ve seen, especially on the product tanker side in April, have we done any sort of period fixing or the time charter hasn’t moved as much as the spot rate?
G Shivakumar
The time charter rates did move, but we have not done any period fixing because the time charter rates were very different from the spot rates.
Rahul Sheth
So
Unidentified Participant
While
Rahul Sheth
We have not done it in the month of March and April, our product fleet does have a certain amount of coverage on that.
Unidentified Participant
Okay, okay, okay, got it. And lastly, we have, you know, three rig pricings coming up this year. Given the situation in the oil market where prices have gone up substantially, what is the current day rates on in the market looking like? Any recent fixings in the market? What day rates have they come at?
G Shivakumar
So we haven’t had any recent fixings happening here in our market since the oil price went up. Obviously because these are long lead tenders, the fixings that we have seen recently in Nigeria seems to indicate that pricing remains firm. We saw a recent contract of one of the international rally companies there. So the rates remain firm. But again, each market is to be seen by itself. So we’ll just have to see what happens in the next tender.
Unidentified Participant
Got it, got it, got it. Lastly, just just one question on, on, on the LNG segment. Now we’ve not operated historically in this segment but given the destruction in LNG infrastructure that has been seen in Qatar and there could be a potential oversupply of ships when the market sort of normalizes. Is this a segment that we could be looking at?
Rahul Sheth
Meaning? Honestly I don’t think we will look at the segment.
Unidentified Participant
Is that got to do with the large sort of capital allocation needed to operate in this segment?
Rahul Sheth
Yes, generally you know the ticket size is quite large and you know when you get into this business you’ll do a few ships. I think it’ll take too much capital from us. I think we’ve got for at least for the sectors we are looking at, I think we’ll be better placed. And also these projects are generally backed with long term charter. So the returns on these kind of projects tend to become more like project financing.
G Shivakumar
And it’s sort of the other end of the spectrum from what we do in shipping which is we like to run in the spot market. Highly liquid assets operating in the spot market rather than in a long, you know, pipeline type assets which are long term contracts. Cost of debt based projects.
Unidentified Participant
Got it, got it. And all our LPG tankers are currently on fixed on time charter, right?
G Shivakumar
Yes, that’s right.
Unidentified Participant
Okay, got it. Thank you so much.
G Shivakumar
Thank you.
Operator
Thank you. We’ll take our next question from Vikram Suryavanshi from Philip Capital. Please go ahead. Vikram, your line is unmuted. Please go ahead with your question. Since there is no response, we’ll move on to the next question from Sidharth Chauhan from 361 Capital. Siddharth, please go ahead with your question.
G Shivakumar
Hi Shiv, hope I’m audible. Yeah, we can hear you loud and clear, Siddhartha.
Unidentified Participant
Perfect. First of all, congratulations on good set of numbers. Now two questions I have. Firstly, how are the day rates shipping up currently versus the previous quarter both in the shipping and dry bulk segment.
Rahul Sheth
So the driver segment remains very strong on lpg. Also remains extremely strong. The crude, even if you look at the crude segments, while they’ve come off a bit as an absolute level, they are still at a very strong level. Products have come off a bit more. But again the thing is in products it’s very volatile. So I think it would be too much to just draw a conclusion from just looking at today’s rate.
G Shivakumar
But again everything while it’s come off from very high Numbers. So there’s a very big spike in March, April and I think it’s settled down from that spike. But still at very high numbers.
Rahul Sheth
Yeah, historically those are very, very high.
Unidentified Participant
And any sense, particularly in rival. Because I. It seems that they have firmed up in the last few weeks.
Rahul Sheth
Yeah. You know, now there are multitude of factors. If you just see certain buying. There’s been in a more cold trade because certain countries in Southeast Asia have been trying to buy more coal because the Strait is shut and there’s less lng, there’s less oil. Iron ore has also been decently strong. Grains have been very, very strong because China has been continuing to buy bauxite. I think all the commodities across the board have just been tightening up and the state has not really affected the dry bulk trade much.
It’s a very small percentage of the overall trade. We’re seeing certain delays also at ports or congestion has also been built up a bit.
Unidentified Participant
Understood, thanks. And secondly on the offshore segment, what’s your sense on the overall ONPC tender cancellation situation? Because we were also reading reports that ADAS Shell Drilling is evaluating whether they want to keep their assets in India or, you know, take it back someplace else. What’s exactly happening as per you
Rahul Sheth
On Shelf, that’s a different thing because Shelf has now merged with Addis. So they’ve now become a very large company of Jaka Briggs. And so, you know, and they also do run a fair bit of old rigs. So they, you know, they’re probably looking at it at a corporate level. I wouldn’t read into them removing the rigs from India to what ONGC is doing. I can’t comment on their corporate strategy though. But in ongc they have not processed a few tenders. But we have seen the number of rigs that they have currently employing come down to one of the lowest levels they’ve ever had.
So we would assume that now at certain point they will now process all these tenders. We currently have an active tender going on and given everything else right now, you know, oil is to secure your own supplies is quite in the focus right now of everyone’s radar.
Unidentified Participant
Understood. No, thanks a lot. Thanks a lot. This was very helpful.
Rahul Sheth
Sure. Thank you. Thank you. Thank
Operator
You. Next question is from Himanshu Upadhyay from Steadfort. Please go ahead.
Unidentified Participant
Hi, am I audible?
Rahul Sheth
Yeah.
G Shivakumar
Yes, Himanshu. Hi.
Unidentified Participant
Yeah, so we have this two in chartered ships, if I remember correctly. Both are Swiss marks. And what is the time? One is a Swiss Max and sorry, Himanshu,
Rahul Sheth
Just to correct. You one is a Swiss Max, one is an Mr. Tanker.
Unidentified Participant
Okay. And when does the period end?
Rahul Sheth
We’ve still got some time between a one and three years depending on which charter.
Unidentified Participant
And is the lease rates also increased quite dramatically means because at one point of time the thought was we would like to have more leased hold tankers where the fleet is pretty low. How is the one three year lease rates? Have you moved in last three months or two months?
G Shivakumar
Yeah. So it hasn’t moved anywhere near as dramatically for these kind of vessels. It hasn’t moved anywhere near as dramatically as the spot rates did. So maybe a few thousand dollars a day while the spot rates probably moved 30, $40,000 a day. So it hasn’t really moved that much at all. Maybe in the Suez Max is a little bit more for some time, but in the Mr. Certainly not. It hasn’t moved much at all.
Unidentified Participant
And one more thing on the LPG where generally we have been on the period charters with spot rates improving, would we like to at some means, whatever repricing or renewals are to happen in this year, would we like to be on spot or we like to maintain our LPG focus on period only?
G Shivakumar
Yeah, we would like to run more on spot. We have made a small step in that direction with a floating, with an floating rate part floating rate charter on one of our vessels that will start this month sometime.
Unidentified Participant
Okay. And one more thing on the offshore space means logistics space. I think we have around eight ships getting repriced this year. How is that repricing on the offshore support vessels moved or is the strength continuing in that market or some thoughts on that because that space has done pretty well for us in last two years. Yeah.
Rahul Sheth
As of now all the offshore rates are broadly very strong. I think for FY27 we still have about 80, 85% of the days covered. So some of those repricings will be more closer to the end of the year.
G Shivakumar
So what’s also happened and you’re right that the space has been pretty strong because that business has shown its best profit since FY 2016 and that’s mostly contributed by the offshore vessels business. Really.
Unidentified Participant
And one thing on the Jacobs, okay see one of the liking or preference for us for Indian market was that we get a period charters. Okay. And two year, three year type of contracts. Okay. But see on the order cancellations, what ONGC has stated that the price has moved quite high and hence we are canceling the orders. Okay. So the thought process still remains with that. That and last two years we have seen continuous cancellations. Two, three years, four cancellations have happened. Okay, so is it really making sense to be in this market only or we would like now to move outside of India also because so
G Shivakumar
Yeah, in
Unidentified Participant
Good times we don’t have the rates or ONGC does not give long term rates and in under spot we are already losing out. So how does it look or how are you thinking about that segment now?
Rahul Sheth
See as of now out of our four rigs we have not really idled any of the rigs. You know sometimes between contracts we actually had two out of the four rigs with parties other than ongc. So we still see that the market is going to or at least as of now remain strong and there is a focus on it. So I think it is worth holding onto our expectations.
G Shivakumar
So you’re right that ONGC canceling etc is causing a little bit, requires a little bit of change in our strategy of just focusing on getting those three year contracts. And that’s why last year we consciously took two short term contracts for two of our rigs and these were in India itself. And we have done very well on those contracts also. So again these are new relationships that we are building and if these customers have more work we are sure that they will come to us because of our track record with them.
Unidentified Participant
And one more thing, the private contractors or private companies which are giving shorter term contracts on the jack up rigs, are those pricing near to international spot rates or they remain depressed in India market? The spot rates? Rates. No, no,
G Shivakumar
No, no. I think they are reasonably good. The international spot rate is difficult to assess because each region is, you know, has its own cost structure and very different cost structures. These are just not comparable at all. At least for say a three year contract you can assess the cost structure and you can make those adjustments on short term contracts. It is very difficult to do that comparison. So we won’t even try. All we say is that these are decent rates and they are quite remunerated.
Not high, but they are reasonably remunerated.
Unidentified Participant
That means would they be nearer to the global rates or something like that?
G Shivakumar
Yeah, sorry. That’s the point I’m making Machu, that we can’t that there is no global rate. So first of all the liquidity in the short term contracts is not very high of number of fixings. Sometimes they don’t get reported. So our contract itself may not have been reported elsewhere. The second thing is even if you get a rate reported, it’s very difficult to know what is the cost structure in that contract. On the mob and T mob etc.
Rahul Sheth
Sometimes in those local markets you have to share some of the top line rate with local partners. Sometimes there is, you know, you have to. When you get onto these contracts globally or even in India, there are certain specific requirements by the charters. So you have to spend some money up front to get those rigs ready for those contracts. So every time you get into that, you have to look at that entire process to really understand what does that headline rate lead to a comparable rate for India.
Unidentified Participant
And one small question. Are all the logistics ship on the offshore side in India only or they are few outside India also currently, how are they positioned?
Rahul Sheth
There are a few ships outside India and a few but most of them are in India.
G Shivakumar
So we have four, we had five. We now have four vessels operating outside India. And this is all across the world. Okay. Okay, thank you. Thank you very much.
Operator
Thank you. Next question is from Vikram Suryavanshi from Philip Capital. Please go ahead.
Vikram Suryavanshi
Hope I am audible now.
G Shivakumar
Yes,
Unidentified Participant
Yes,
Operator
Please go ahead.
Unidentified Participant
Okay,
Vikram Suryavanshi
Great. Yeah, thanks. Sir, what we are seeing is that the order book has now started building up. So how is that capacity is available for further already and probably are we seeing that cycle of order book increasing going again? Because the way the kind of money shipping companies have made in last three to four years and probably the situation what we are looking in terms of continuous demand disruption. So if your comment I think that in terms of order book and shipping capacity would be helpful.
G Shivakumar
Yeah. So the order book is building up especially for crude tankers in the last. And that too especially for VLCCs in the last few months the yard capacity has not grown that much. It’s just that the slots are getting filled up. You know, the slots were not available for building these ships in this period for I think three to four years because all the slots were. All the large slots were getting taken up by the big container ships and by LNG ships. Now that that ordering is not as extreme. These slots are becoming available.
So it’s not a huge increase in shipyard capacity. It’s just a movement that more of it is available for these large crude tankers. Yes, it is building up. There is as we showed, there is still a significant part of the fleet which is old. So that’s something to consider. But yes, having more of an order book versus six months ago makes you maybe a little more concerned about what can happen to the market balance. But this is again 27, 28 kind of deliveries. And now if you. Yeah, it’s. You probably need in 20, you’ll get a ship in 29.
Vikram Suryavanshi
Right. And in offshore side are we seeing like some cold stacking critics coming back?
G Shivakumar
Not really. Not cold stack fleet? No, no, not really.
Rahul Sheth
We’ve
G Shivakumar
Not seen any real movement on.
Vikram Suryavanshi
Okay. And just the last on clarification on one of your comment because I think our preference is always to keep capacity more on spot. But however if you are we open to short the market at some point in the time or our preference will always be to play through the cycle in a week. Always remains.
Rahul Sheth
Sorry.
Vikram Suryavanshi
Yes sir,
Rahul Sheth
Please continue
Vikram Suryavanshi
Because I think probably the way we are seeing the super cycle, probably asset play could come with a much longer lag. So that was, that’s the reason I was asking.
Rahul Sheth
So we predominantly remain spot. Of course opportunistically we do take time charters. But from what we have seen that even when the markets are very high, generally when you go for a time charter rate contract, they’re in backwardation. So which means that just as an example, the spot market is earning 100 and you want a time charter say for one or two years. The longer you go, the lower the rate becomes. You may get it for 80 or 70 or some lower number. So upfront you’re giving up something to take that cover.
So we generally don’t prefer to take that. And as we have mentioned on these calls, the markets especially in shipping are so volatile that very often you can believe that maybe 100 will average 60 and so you should take the COVID at 70 and eventually the market ends up at 100. So you know, when, when the markets are this volatile, I think sometimes shorting it can maybe do more harm than good.
Vikram Suryavanshi
Understood sir. Thank you very much.
Operator
Thank you. We have a text question from Divi Agrawal from Ficom Family office. The first question is could you help us understand the reason behind it? And also what is the fleet exposure between spot market and time charter contracts? Second question is should we expect the benefit of higher freight rates to be reflected more meaningfully from Q1 FY27 onwards?
Rahul Sheth
So we are generally, you know, our time charging activity will be below 20%. Like I just mentioned, we always prefer to remain spot. And you know, still a long quarter to go. We’re not going to forecast the Q1 numbers.
Operator
Thank you. Next text question is from Harsh C. An individual investor. What parameters does management take into account while doing the switch transactions? The vessel value seems to have increased when compared to last year despite that company acquired higher amount of ships. How much impairment would have to be recognized on new vessels as market corrects?
G Shivakumar
So we look at the timing of the switches is dictated by the ships that need to be sold, when the ship needs to be sold, that is, we cannot use it to service our customers in the international market. We look to sell the ship. If we are looking to sell a ship, we will also look to replace the ship with a more modern vessel which can be used to trade in the international market with our customers. So the timing is more decided by the ship that needs to be sold. The price is actually just a function of how many transactions we did last year.
And if you’re looking at how much we spent in FY25 versus FY26, it’s because two bulk carriers which we sold last year, we did not replace in FY25. We actually replaced them in FY26 because it was just a question of timing the purchase of those ships and getting some good ships to buy. So that’s one factor which can happen, which is just a timing mismatch between two years. As to the impairment, we don’t know whether we will have to recognize any impairment at all because this is a function of what happens to the market price of the ship.
It is also measured by the earning capacity of the ships. So there are a lot of factors which get into the impairment, into the impairment calculation. So it’s difficult to comment on whether we will have at all and how much. If we do, how much will have to be recognized.
Operator
Thank you. We’ll take our next live question from Rajesh, an individual investor. Please go ahead.
Unidentified Participant
Hi, sir. Thanks for the opportunity. So I. I just joined late, so if the question is already answered, you can let me know. I mean, I can go through the recording again, but I just wanted to know that when the ships got stuck in the Strait of Hormuz. Okay, so did GE ship lose any revenue for the stuck days or was the trip on a per day basis and it continued to earn for the stuck days?
G Shivakumar
Okay, we have one ship which is not on a per day basis and which where the time is on our account. So the lost days are on our account. So we lose revenue on that ship.
Unidentified Participant
Okay, so that is on one ship. But I believe there were a few other ships which were stuck for a few days. But
G Shivakumar
Yeah, all other ships are on time charter, so they continue to earn in that time.
Unidentified Participant
Okay, so they would have continued to earn on per day basis even for the stuck days, for the time. That’s
G Shivakumar
Right. So then. Yeah, that’s correct.
Unidentified Participant
Okay. And so I have a strategy question. So if the company wants to Be in spot market, which is your, your preferred mode. Right. And that would be to, to take advantage of the disruptions or volatility. Right. So shouldn’t you be more positioned on the longer haul routes instead of the regional routes? Because I think the longer routes give more volatility and more upside and are more prone to disruption. Right.
Rahul Sheth
No, there’s no pattern between the short and long haul routes. It all depends on how the trade is evolving. And then based on how the trade is evolving, we evolve our trading patterns accordingly.
G Shivakumar
And also it is not that we trade only on short haul routes. We do long haul trades as well. Yeah.
Rahul Sheth
We are agnostic to which route we take. We change it based on our view on which routes would be better to trade in.
Unidentified Participant
Yeah, but I was looking at your fleet competition. So for example, you own let’s say maybe two cape size, but you own a number of Kamsarmax or the shorter distance type of, of vehicles. Right. So you are positioned more on the shorter routes by looking at your fleet profile. I got that impression. Basically.
Rahul Sheth
No, it’s, you know, you’re seeing the size of the ships, right. Because there’s one 80,000 and capes of 180,000. But that doesn’t mean that they do shorter routes. Kamzo Maxis for example, do routes from China to Latin America and back that can be 100 days. Cape sizes can all can do those routes for different cargo. But they can also do Australia, China, which is about 30, 40 days. So you know, even capes can do shorter routes. So there is no linkage between the size of the ship and the route size.
If you take on the Suez maxes which are large crude tankers, they can do routes from Middle east to Jamnagar. Those round voyages are 20 days.
Unidentified Participant
Okay. Right.
Rahul Sheth
There’s no linkage between the size of the ship and the length of the route.
Unidentified Participant
Okay. And so in this, I mean post Iran war, were the tanker rates attractive enough to to from the clean to dirty switchover, did it actually happen? And if yes, did G ship actually do the switchover from clean to dirty? Was it a profitable proposition?
Rahul Sheth
So we have, we have seen ships trade. Many ship owners have converted a lot of the LR2 into Afromaxes. Generally the switching only really happens on this sector where the LR2s and Afromaxes are switch between clean and dirty. And we also have switched a couple of vessels to dirty.
Unidentified Participant
Okay. And I believe the time when you want to switch back from dirty to clean to clean, there is some cost of that. Right. I mean so Overall, it is a very profitable. Even after accounting for the cost of switching back, right?
Rahul Sheth
Yes, that’s right.
Unidentified Participant
Okay, fine, sir. And just one more question. So now your console and NAB is close to 1800. And do you feel it is sustainable for the next few quarters? So. So even if the fleet value drops, okay, but your earnings will keep propping up the the nab, right? So, so, so at a very high level, the NAV should not drop significantly even if it doesn’t increase. Right? I mean the chances are more of increasing the nav. But even if the cycle turns or these disruptions go away, still the NAV would more or less sustain at least the current levels.
Right?
G Shivakumar
So let’s look at this. It depends on how a drop in value of ships, whether it happens in a short period or a long period. What you are describing is when the drop, let’s just say a drop of $200 million happens in the fleet value. Now you know what our earnings were in the last year. Our cash earnings were more than $300 million. Okay.
Unidentified Speaker
And
G Shivakumar
Therefore it can absorb this drop of $200 million in a year. This we are talking about a year. Now if the same 200 million drop happens in one quarter, then you cannot absorb that if your run rate is $75 million a quarter. But yes, the advantage in our business is this nav. And the point you identified is correct. The NAV keeps converting into cash because a ship earns cash and therefore a significant portion of the ship price or the NAV will keep coming in as cash flows. Which is the point we made in the presentation.
That large part of it is navy improvement is actual cash earnings themselves.
Unidentified Participant
Okay, fine. So my last question. So I. I was going through the con calls of some US listed shipping companies, Scorpio tankers, and there are quite a few more, okay. They. They are also trading at a similar price to an AB. Okay, maybe 1.1.1 or a similar range. But. But they have announced very large buybacks. Okay. So I think you know, the last quarter they did buyback of $100 million. And I think this quarter they have announced $500 million. Right. If I’m not wrong. So when they see value in announcing buybacks at a similar price to nav, why does de ship not see value in announcing buybacks at.
At a similar point? Yeah, this is my last question,
G Shivakumar
So I. I won’t comment on. Because different companies have different approaches. Our approach is of a value buyer. They’re also also companies. So first is, I don’t know who’s done this 100 and 500 million dollar buyback I haven’t really seen. But different companies have different approaches to investment. Our approach is a fairly conservative investor where we buy at certain levels. This goes for whatever it is, whatever capital allocation we make, we buy only at certain prices, even in ships.
Different companies just, some companies just will just keep buying irrespective of the market. Buying ships. I’m talking about. So everybody has different investment philosophy and we really wouldn’t like to get into whether ours is better or this. This is something which has served us well over many decades and so we stick with this.
Unidentified Participant
Okay, can I squeeze in one more question or should I. Quick one,
G Shivakumar
Quick one. Yeah.
Unidentified Participant
So, so compared to, compared to March ending rates, I mean we have been hearing in or reading in the industry that tanker rates subsequently shot up significantly in, in April and May and even the dry bulk, the entire spectrum of ships across the dry bulk, they have also, you know, started participating in this, in this, you know, flight movement. So, so your comment on that and whether gas based ships. Okay. They are the only ones which are not participated in this flight increase. And have all other sectors seen significant increase compared to the March rates?
Rahul Sheth
No, in fact actually LPG has done one of the best. The rates are still extremely high. LPG has done.
G Shivakumar
Yeah. Close to all time highs. Close to
Rahul Sheth
All time highs? No, probably all time highs.
Unidentified Participant
Oh, that’s great. Okay. And the tanker and the dry bulk, they are also at a higher levels compared to, and significantly higher levels. Can I say that
Rahul Sheth
Dry bulk is crude and our products are not as high as the peak we saw in March and April, but they’re still very, very strong.
Unidentified Participant
Okay. All right, sir. Okay. Yeah, that’s very helpful. Thank you.
Operator
Thank you. Next question is from Anuj Sharma from Steadford Investment managers. Please go. Anuj, your line is unmuted. Please go ahead with your question. Yeah,
Unidentified Participant
Yeah. Hi. Am I audible now?
Operator
Yes.
G Shivakumar
Yes.
Unidentified Participant
Yeah. So, so my question is on the, on the offshore rig, is there a possibility that ONGC comes out with a tender but due to our short term engagement our rigs are not available for those options?
G Shivakumar
Yeah, it’s certainly a possibility. It is not. So currently we have a rig available and Generally ONGC gives 180 day period for delivery of the rig into the contract. So that’s not something which is likely to arise. I mean it could happen but because it’s a short term contract by definition it will hopefully get over in 180 days.
Unidentified Participant
My next question is on the, on the jackup rigs. So the order book continues to be low. Is it due to uncertainty in demand or the, or the shipyards are not ready with capacities to deliver? What’s. What’s more of the probability?
Rahul Sheth
Maybe
G Shivakumar
A bit of both. Yeah, a bit of both. A yard capacity has got completely. Yeah, yeah.
Rahul Sheth
You know, because since 2014, we’ve not really seen any real orders for the jackup, you know, but having said that, we’ve always seen in our business that if there was sufficient demand for those jack up, someone will come to build it. There could be yards which we’ve not heard of. But you know, China does have a lot of other capacity and I’m sure someone would build it. But at least as of today, we’ve not seen a lot of interest in trying to even go and ask those yards to build. I think the rates would be substantially higher before that level of optimism comes to go and build more rigs.
Unidentified Participant
All right, and just on ONGC auctions, any timelines, any new timelines for the auctions or nothing? No, they’ve not given. We have an
Rahul Sheth
Ongoing tender, but how long it takes to be processed, we are not sure.
Unidentified Participant
All right, thank you so much. Thank you.
Rahul Sheth
Thank you.
Operator
Thank you. We have a text question from Neerav Sheth from MK Global. What is a better option? First, running ships on long term time charter with debt, or second, running ships on spot without debt over the long term, what gives better? Roe,
Rahul Sheth
This is a good question. We have actually studied our history and tried to see that which model would work better. We’ve always found the latter to be better. And it’s not without debt, it’s with less debt. So it just depends on your level of debt. We have shipping companies. If you look at global shipping companies, a lot of companies run largely spot, but the amount of debt they take varies. And one can always debate what that level of debt should be. If you want to compare that to the first model, what we have seen and what I mentioned earlier on this call that we have seen, spot rates tend to outperform the time charter rates for a variety of reasons.
And so then to compensate for that, you would have to take a lot more debt. We find that a riskier strategy and I think we’re just better at playing the second option.
Operator
Thank you. Next question is from Meet Parikh from Mihir Asia and Company. Previously, management had guided that the buyback was not tenable due to adverse taxation. Now that the tax norms have changed, why not consider a buyback?
G Shivakumar
It’s a function of the price, really. And as with everything in this capital allocation as well it’s a function of the price. So you’re right that one of the biggest impediments has been removed. But again everything is at a price and when appropriate.
Operator
Thank you. Next question is from Alok Yadav. He’s not mentioned his company name. Can the management confirm the outstanding loan from Gesco to GIL for March 26? As per financials there was loan provided from 425 crore and repayment of 125 crore. But the outstanding loan seems to be more than 425 crore which was the original loan. What’s the timeline by when Gil plans to become debt free?
G Shivakumar
There were two loans. One was 65 crores and one was 425 crores. As of 31st March the loan outstanding was 392 crores. There were also an old preference share which was subscribed by the parent which is 272 crores as of March 2026.
Operator
Thank you. We’ll take our next question from Rajesh Jain, an individual investor. Please go ahead.
Unidentified Participant
Yes sir. Thanks for the follow up. So any particular reason you have never bought in the last few years since I started tracking your company, you have never purchased a vlcc. Because we keep hearing in the news a very sharp spike in vlcc. Sometimes they are probably the major beneficiary of of some rate increases compared to the other vessels. But you have never owned a VLCC till now. We have owned
Rahul Sheth
VLCC in the past and there is no particular reason that we have chosen not to stay out of that segment. And I’m sure that in the future we will be in that segment. But if you see, you know from 2022 when the Russian war took place and the market significantly tightened, that was a Suez Max and Afromax story. So for the first few years from 22 till maybe 25 end, the Suez Maxis and Afrimaxis have outperformed the VLCC considerably. The VLCCs really came into their own maybe in the last six to nine months, something like that.
And since then those rates have gone up a lot. But if you take over this four year period it has been better served to be in the other two segments.
G Shivakumar
But again, this is not to say that we don’t want to own vlcc. Yeah,
Rahul Sheth
I’m sure in the future we’ll get into it. But again it depends on, you know, getting the liquidity of the ship and what you’re buying. If you get better Deals on the Suez maxes, we may buy more Swiss maxes.
Unidentified Participant
Okay, but by not, by not owning a vlcc don’t you lose out on. I mean, I just wanted to correct my understanding. So are there certain routes on which VLCC are more suitable and you lose out on or you don’t participate in those trips because you don’t own a vlcc and no other ship type can fulfill that trip, basically. Is it like that or not?
Rahul Sheth
No, not exactly. So say, for example VLCCs do a large amount of trade from the Middle east but the Suez maxes also do trade on the Middle East. So if you’re taking cargoes from the Middle east to India or somewhere else, the Suezmaxs also, maybe the VLCCs do more of that trade than the Suez Maxis. But you know what you’ve seen over a long period of time, you have to look at the price at which you’ve entered each one of those sectors. That is more relevant than saying ok, I need to be participating in one particular trade over the other.
G Shivakumar
And what also happens in the case of VLCCs is that they hit the headlines more often. But Swiss maxes also tend to move in tandem with VLCCs because typically a VLCC carries 2 million barrels of crude oil while a Suez max carries a million barrels. If there is too much of a differential between the two, customers will tend to, will try to split the cargo from one VLCC to two Suez maxs. So then the price will become more or less the pricing, the freight rates will become closer then so it can’t be too dislocated for too long.
Unidentified Participant
Okay, so two more short questions. So when are the gas carriers coming up for repricing? I believe all your gas carriers are on time charter, right?
Rahul Sheth
That’s right,
Unidentified Participant
Yeah.
Rahul Sheth
Mentioned earlier on this call we have fixed and shall be delivered shortly. The other one is in the next few months so we’ll, we have some time to decide.
Unidentified Participant
Okay, and is it safe to say that they will be reprised at least? You know, maybe. I mean as assuming current rates, they will be reprised at least 50% higher than the, than the earlier time rates.
Rahul Sheth
We can’t comment on what rates you will get when she’s.
Unidentified Participant
Okay, so, so in other words, are the current time rates today 50% higher than the time rate they were contracted for earlier?
G Shivakumar
No, no, no.
Unidentified Participant
Okay. They’re lesser than 50%. Okay.
G Shivakumar
Yeah.
Unidentified Participant
They were contacted
G Shivakumar
At very, very high rates.
Unidentified Participant
Oh, okay, nice. Okay, that’s great. Okay sir, any detail you can give on your unchartered ships because we see that line item. But, but that’s a black box. You know, what are the ships you, you, you have in chartered? Okay, what are the categories and what are the tonnages? I mean any details on the in chartered ships and do you plan to grow this. Yeah, this segment.
G Shivakumar
So we have two ships on in charter. Both are tankers. One is an Mr. Product tanker, one is a Suez Max crude tanker. There are only two vessels on in charter. It was done because there was a certain opportunity as part of a switching strategy instead of buying a ship in charter. And yes, we could look at it. We used to have a significant in chartering operation 15 plus years ago. And if the opportunity arises, certainly we look at doing more. Everything is subject to price, of course.
Unidentified Participant
So your operating margins on owned ships versus uncharted ships, obviously they will be quite different. But can you give some idea what is the operating margin on unchartered ships?
G Shivakumar
There is no number here. So let’s say you are you in charter a ship at $30,000 a day. Now the ship could earn 25 or it could earn 35 or it could earn $50,000 a day. So because we don’t have a fixed. It’s not that we have.
Unidentified Participant
I’ll rephrase my question. Sorry to interrupt you. I’ll rephrase my question. So, so I was asking about the actual operating margins. Let’s say for the March quarter, it will be
G Shivakumar
Much much lower for an unchartered ship. Because in the operating margin of an owned vessel, basically you only deduct the operating expenses. Correct. When you are looking at the operating margin, when you are looking at an unchartered ship, you have to deduct not just the operating expenses of the owner, but also his capital recovery, his interest, his depreciation, maybe his loan repayment cost as well. And therefore the cost base itself becomes much higher. So the quick answer is the operating margin profile of an unchartered ship is very different.
The operating margins will be much lower than for an owned vessel because by definition they would not be chartering to us at operating at opex.
Unidentified Participant
Correct. So for example, your operating margin for the owned vessels was let’s say 58 or 60%, something like that. So for in charges would it be like 15, 20%?
G Shivakumar
Again it depends on the rate. If you in chartered it in one quarter it could be in charted at 30,000. One quarter it could earn 25,000, in the next quarter it could earn 40,000. So there is no Number. So it is very difficult to put a number to answer your question.
Unidentified Participant
So I’m asking only about the actual numbers of the March quarter, not a production.
G Shivakumar
So they are positive. Let’s say that you have a Suez max in our own Suez max. So let’s say we have two. We have an uncharted Suez maximum. We have an owned Suez max. The owned Suez max. Operating expenses could be maybe between six and $8,000 a day. The in charter rate is not six to $8,000 a day. They would earn very similar rates. It’s not very different. One is an eco ship. So there may be a marginal difference in their earnings. Let’s say both of them earn $60,000 a day. In the case of the owned vessel, the operating margin is 60,000 minus $8,000 a day in the case of the uncharted vessel.
And I cannot mention the actual rate at which we have in chartered the ship, but let’s call it $30,000 a day. So your margin is only $30,000 a day on the uncharted vessel. So that’s the difference between the two because the cost base of an uncharted vessel by definition is higher than the cost base of an owned vessel.
Unidentified Participant
Sir, I was going through the, the crash, the cash breakeven level of some of the US companies. US listed shipping companies, they disclosed it was close to $11,000 per day for their entire fleet. So. So can you disclose your cash break even levels for your entire fleet today?
G Shivakumar
Our, our book breakeven levels are probably around $12,000 a day. Between 11 and $12,000 a day. Our cash break even is probably in the $9,500 a day, something like that.
Unidentified Participant
Okay. Maybe $9,000
G Shivakumar
A day. Because we also have a lot of other income from the Treasury. Yeah.
Unidentified Participant
So anything beyond that 10,000, 11,000, $12,000 rate. I mean primarily it flows to the bottom line, right? I mean. Yes,
G Shivakumar
Yeah, this is cash breakeven. It will flow to cash flows. But yeah, a book break even will be maybe $12,000 a day for the fleet, across the fleet.
Unidentified Participant
Okay. So beyond 12,000, the entire number flows to the bottom line.
G Shivakumar
That is correct.
Unidentified Participant
Okay, sir. Okay. And that is across the entire fleet, right?
G Shivakumar
That is a blended rate for the entire fleet.
Unidentified Participant
Yes. Yes. Okay. Okay, thanks a lot. Thank you so much.
G Shivakumar
Thank
Unidentified Participant
You.
Operator
Thank you. Next question is from Karan Battalia from Maiq Capital. Please go ahead.
Unidentified Participant
Yeah, hi sir. Congratulations for great set of results. So you have reached a significant cash position this quarter. But we are also seeing the freight rate Staying at multiyear highs, which in turn has also increased the vessel prices. Now, given the parts of the fleet are aging. I’m just trying to understand your philosophy as to whether you are comfortable to buying tonnage at these levels to capture the current yields or do you feel the IRR is too thin? Or if you decide to wait for a correction, maybe what is the plan for the excess cash which you have generated?
G Shivakumar
So see, if it is a question of switching where if we had to sell a ship and replace it, then we will do it because we have a certain market presence which we have to maintain. So that is something that we will continue to do. Your question, I take it, is on buying an incremental ship that is for growth, is that right? Switching we will do because we have decided not to go below a certain level.
Unidentified Participant
Okay. Either way, either increasing or maybe replacing it. I mean, we have been replacing a lot. At least replacing. We will
Rahul Sheth
Continue to do
Unidentified Participant
Increasing. We will
Rahul Sheth
Not go for current yield.
Unidentified Participant
Yeah.
Rahul Sheth
Because you know, when you’re doing a switch, it’s a very different thing from doing incremental. When you’re switching, you’re buying at a high level, but you’re also selling at a high level. When you’re buying incremental, you’re just buying at a high level. So you have to look at them very, very differently.
Unidentified Participant
Correct. But sir, don’t you think we also have the opportunity to capture the current yields?
Rahul Sheth
Yes, but you know, current yields can change. You have to look at the business from a more longer term point of view.
G Shivakumar
Typically, current yield is a bit of a trap. Yeah. And we’ve seen cycles. Yeah. So you have to
Rahul Sheth
See what best serves you more in the long term.
G Shivakumar
We’ve bought, I think we’ve done best on the projects where we bought when current yield was close to zero.
Unidentified Participant
Got it. Thank you. All the time.
G Shivakumar
Thank you.
Operator
Thank you. We’ll take one text question from Meet Parikh from Mihir Esha and company. At what level of discount to nav would the company consider the value of buyback to be attractive? Also, would a lower fleet age lead to better TC wise?
Rahul Sheth
We can’t comment on the first part of this question. And the second one, would a lower fleet age lead to better TC5? No, not really. There is something on the fuel economics, but I think the price at which you enter and the segments at which you enter, I think that’s the most important. Important.
Operator
Thank you. We have meet on the line. Meet. Has your question been answered?
Unidentified Participant
Yeah, my question has been answered. Thank you so Much. Thank you. Thank
Operator
You. There’s one more text question from Harsh C. An individual investor would like to understand the management’s thought on reasons because of which the spot market outperforms time market over longer period. Is spot market better suited to be the vessel to marginal commodities traded which usually balances demand and supply and hence have better pricing power?
Rahul Sheth
A bit of a difficult question to know why it outperforms. It’s just that, you know, in the spot market because our business is driven by a multitude of events and sometimes those events can take up the market up significantly. So as you can see when the Russian war took place, the freight rates changed 2.3x. So when you can have that kind of change in the underlying market, then when you are generally taking a time charter activity, they will be within a narrow band and if the market moves that dramatically, then you will be caught short.
And so of course we can’t say that every time that happens. But if you look at a longer period of time when it does happen, because the markets move up that significantly, then over a longer period of time you see the spot outperform the time chartering market.
G Shivakumar
So on a slightly more philosophical note, maybe because the person who’s fixing out on time charter is taking less, is the charter is helping him to reduce his risk, maybe then that leads to slightly lower returns overall. So we see that in very long term charters. Now whether it’s true for one year charters is a different matter, but the spot market operator typically tends to be taking more risk.
Operator
Thank you. As there are no further questions, I now hand the conference over to Ms. Anjali Kumar for closing comments over to you.
Unidentified Participant
Thank you everybody for joining in and for those very insightful questions and answers. As usual, the transcript of the both the audio and the text transcript will be there on our website very shortly. Thank you so much for joining us and for any future questions. Please feel free to email to us and we’ll be happy to answer them. Thank you. Thank you.
Operator
Thank you on behalf of the Great Eastern Shipping Company. That concludes this conference. Thank you for joining us and you may now exit the meeting.