Key highlights from Cochin Shipyard Limited (COCHINSHIP) Q2 FY24 Earnings Concall
- Defense Projects
- Completed guarantee refit of aircraft carrier INS Vikrant, contributing INR85 crores revenue in Q2.
- On track for simultaneous launch of 3 ASWC corvettes on Nov 30; will lay keel for 2 more in Dec.
- These projects drove revenue growth in the period.
- New Contracts
- Subsidiary won order from European client for 6 general cargo vessels worth INR580 crores.
- Signed contract with Defence Ministry for INS Beas midlife upgrade for INR313 crores over 24 months.
- Received order from IWAI for 8 hybrid electric catamaran passenger vessels worth INR129 crores.
- Won multiple Indian Navy ship repair contracts worth INR114 crores.
- Financial Performance
- Consolidated turnover increased 32% YoY to INR1,488 crores.
- PBT jumped 76% to INR389 crores.
- Profit after tax grew 81% to INR280 crores.
- 20% EBITDA margin, excluding other income.
- Outlook
- Well positioned with strong order book and focus on efficiency.
- Launch of 3 ASWC corvettes this month major milestone.
- Building capacity across yards for future growth.
- Confident in sustaining momentum from first half into second half.
- Expect to cross pre-COVID turnover of FY2020.
- Foresee EBITDA margin of 16-17% for full financial year, driven by higher share of ship repair and IAC work which have better margins.
- Capex plan of INR355 crores for current year, spent INR125 crores so far.
- Expansion Projects
- International Ship Repair Facility (ISRF) has achieved 81% progress.
- To complete ship lift system and first 2 workstations by Dec 2023.
- New dry dock project has achieved 83% progress.
- To inaugurate dry dock by Dec 2023 after civil works and full commissioning by mid-2024.
- Order Pipeline
- Lost out on some orders like Ocean Research Vessel and Fast Patrol Vessel.
- However, order pipeline remains strong at Rs 1,400 crores of near-term RFPs.
- Also looking at opportunities in Europe – offshore vessels and short sea vessels.
- Potential deals in 500-1,000 crores range in these segments.
- Green Vessels
- has strong interest in green vessel transition program.
- Traction expected at subsidiary units in Kolkata and Udupi.
- Will compete with other yards but see significant potential.
- Focus on more advanced technologically vessels.
- Shipbuilding Orderbook and Financials
- Has a strong orderbook of around INR20,000+ crores for naval projects like ASW corvettes and Next Generation Missile Vessels (NGMVs).
- Naval orders provide revenue visibility for next 5-7 years.
- Margins in line with normal shipbuilding business.
- Total naval orderbook value is around INR9,800 crores.
- For FY24, guidance is to spend INR350 crores on shipbuilding infrastructure projects.
- Ship Repair Business Expansion
- Aiming to grow ship repair revenue to INR1,200 crores in next 2-3 years from current levels of INR700-900 crores.
- Looking to develop Kochi as a formal ship repair cluster through partnerships and more ancillary units.
- New dry dock facility is LNG carrier ready. Evaluating LNG vessel repair opportunities.
- Partnership and Order Opportunities
- In discussions with government and private entities for new order for vessel made for Andaman and Nicobar.
- Seeing good opportunities in international market for dredgers based on this experience.
- Looking for international partner for operations of new ship repair facilities.