Garden Reach Shipbuilders & Engineers Limited (NSE: GRSE) Q4 2025 Earnings Call dated May. 20, 2025
Corporate Participants:
P.R. Hari — Chairman and Managing Director
Analysts:
Vaibhav Dalal — Analyst
Harshit Kapadia — Analyst
Unidentified Participant
Dhavan Shah — Analyst
Utkarsh Somaiya — Analyst
Sanjeev Zarbade — Analyst
Sunil Shah — Analyst
Hardik Gandhi — Analyst
Parimal Mithani — Analyst
Vikas Kasturi — Analyst
Presentation:
Operator
Good afternoon, ladies and gentlemen. I am Navya, the moderator for this conference. Welcome to the conference call of Garden Reach ShipBuilders and Engineers Limited arranged by Concept Investor Relations to discuss its Q4 and FY25 results ended March 31, 2025. We have with us today Commodore P.R. Hari, Indian Navy Retired, Chairman and Managing Director; Shri. R.K. Dash, Director Finance and CFO; and Shri. Sandeep Mahapatra, Company Secretary and Compliance Officer. Please note this conference will be recorded.
I would now like to hand over the floor to Commodore P.R. Hari, Chairman and Managing Director. Thank you and over to you, sir.
P.R. Hari — Chairman and Managing Director
Thank you, Navya. Ladies and gentlemen, a very good afternoon to each one of you. I am P.R. Hari, Chairman and Managing Director of the company. And with me here are Shri. Ramesh Kumar Dash, Director Finance and CFO; Mrs. Aparajita Ghosh, General Manager, Finance; and Shri. Sandeep Mahapatra, the Company Secretary and Compliance Officer. At the outset, my warm regards to each one of you who have taken time out of your busy schedule to attend this call. I look forward to this analysis and interact investors meet and it is always a pleasure to interact with you. And that gives me an opportunity to provide the highlights of our performance and also address your queries touching upon the financial performance. Yet another very strong set of numbers.
And here I have to state my stock dialogue. The performance during the quarter ending and financial year ending 31st March 2025 has been the best ever in the history of the company. If you are comparing quarter to quarter, our revenue from operations have moved up from 1015 crores to 1642 crores registering a growth of 62%. EBITDA has moved up from 166 crores to 335 crores registering a growth of 101%. And the profit after tax has moved up from 114 crores to 244 crores registering 118% growth. And so has the operating profit moved up from 77 crores to 209 crores.
If you’re comparing financial year to financial year, our revenues from operations have moved up to 5075 crores. We have broken the 5000 crore barrier registering a growth of 41% and the profit after tax has moved up by 46% from 360 crores to 527 crores and the operating profit has moved up from 181.30 crores to 368 crores registering 103% growth. This has been backed by a very strong physical performance supported by efficient and effective treasury management system. Our order book as on 31st March 2024 was rupees 22,652 crores and despite strong revenue accrual to the tune of nearly 5000 crores, we have managed to maintain the order book at Rupees 22,680 crores as on 31st March 2025.
This comprise of 9 projects consisting of 40 platforms including 16 warships for the Indian Navy from 4 projects, 3 P17 Alpha Frigates, 7 Anti Submarine Shallow Water Crafts, 2 Surveyors Large and 4 Next Generation Offshore petrol vessels. In addition we are also executing a eight ship multi purpose vessel project for a German client plus one acoustic research vessel for one of the DRDO organizations, the NPOL Kochi, an ocean resource vessel for the Ministry of Earth Sciences, one of their units, the NCPOR Goa and 13 hybrid ferries for the Government of West Bengal.
During the period intervening the last financial year and now we have delivered one Surveyors and large that is the second in a series of four ships that we are building for the Navy and also happy to inform you that that we have delivered the first anti submarine shallow water craft to the Navy very recently as early as the second week of this month. This particular event is very prestigious and a matter of pride for Team GRSC because this is the first ship in a series of six 15 ships being built for the Navy by two shipyards, another PSU shipyard and we are happy that we have been able to deliver the first of these 16 ships. In addition, we delivered an unmanned surface vessel to a DRDO organization, the NSTL Vishakhapatnam and also completed the petrol vessel petrol boat project for the Government of Bangladesh.
I now give you a glimpse of the progress of the ongoing project. As I have mentioned, we are constructing three T17 Alpha ships. I am happy to inform you that the first ship is well on track for delivery and we have completed the final machinery trial. When I say final machinery trials, these are the trials conducted with the presence of customer representative Navy representatives at sea. And we are now getting the ship ready for delivery and the ship has already completed nearly 95% of physical progress of construction. We intend delivering this ship two months from now, ahead of the contractual delivery period.
The second ship is moving along smoothly. The ship has attained 73% physical construction and this ship we intend delivering early next year. And the third ship has attained 54% of physical progress and this ship is planned for delivery during August 2026. Coming to the survey vessel Large project, I had mentioned that two of these ships have been delivered with the last ship being delivered last year. The third and fourth ships are well on track for delivery. The third ship has attained 88% physical progress. The ship has already completed her contractor fleet trials and now she’s being prepared for final machinery trials and delivery.
We intend delivering this ship by July this year. The last ship of the project, the survey vessel Large 4, has attained 77% physical progress and by end of this year, this calendar year, we’ll be delivering this vessel. Coming to the anti submarine shallow watercraft project. I had mentioned that the first ship has already been delivered, the second ship has completed the final machinery trial and this ship is planned to be delivered during July this year. The third ship has attained 82% progress, the fourth 68 and so on. And as per our current estimate, all the ships of this project will be delivered during calendar year 2026 with four of these vessels, that is three more vessels planned to be delivered during 2025-’26.
Coming to the next generation offshore petrol vessel project, the first two ships have crossed 50% of physical progress and the last two ships of the project have also moved along fast and they have attained 43% physical progress. What I would like to state with respect to the next generation offshore petrol vessel project is that the keel of all the four ships have already been laid and we intend launching two of these vessels during the current financial year. In addition, the other non defence platforms, the ocean research vessel, the production has already commenced and the keel of the vessel has already been laid in March 2025 and the delivery of this ship is planned during October 2027. As well as the acoustic research shift for the DRDO, the design and pre production activities are in progress and the project is well on track. We are also executing one project for the Government of Bangladesh, a Draja project.
The design and pre production activities are in progress and the same is the case with the hybrid series. The 13 hybrid series. The keel of all the 13 series is planned to be launched during this month end of this month. This has provided you a brief on the status of the ongoing projects now coming to the projects on the Anvil. I had mentioned during an earlier interaction that we were declared L1 for two vessels for the Geological Survey of India Coastal research vessels. We already received the letter of intent and the contract for these vessels is expected to be signed during June this year. We also expect the formal bid declaration of the next generation Corvette project in a couple of days. In addition, Navy has already come out with an RFP for five next generation survey vessels.
Large and GRSC will definitely be bidding for this project and having the experience of building the survey vessels large and earlier platforms of similar kind. In our appreciation, we stand a good chance of providing an aggressive bid for this project. Another bid that is life is a bid for 18 next generation fast patrol vessels for the Indian Coast Guard. GRFC will be bidding for this project. This is an interesting project. This is not a conventional fast patrol vessel. This is an advanced vessel with hello helicopter staging facility so GRSP would be interested in taking part for this project.
These are the two live RFPs which are there as of now. In addition to that, in addition to these two we expect RFPs for six next generation Ocean going petrol vessels for the Indian Coast Guard, two multi purpose vessels for the Indian Navy, 120 fast interceptor crafts for the Indian Coast Guard and 31 follow on water jet fascists for the Indian Navy to come out in the near future. These are all small to medium sized projects. What we are eagerly looking forward as I had repeatedly mentioned regarding the next generation Corvette project over the last two years. Another project that we are expecting the RFP to come out is for the P17 Bravo follow on of the P17 class of ships.
As you are aware we are building three of these vessels now and with this experience again we are confident of providing a good bid, a competitive bid for this project. In our appreciation the RFP is likely to come out during the calendar year. In addition, Navy is also they already obtained the on of the Defense acquisition council for 12 mine countermeasure main countermeasure vessels and in addition the other two large projects. @ this moment there is no clarity as to when the RFP will come out but as per Navy’s perspective plan, the LPD project and the next generation destroyer project are also definitely on the anvil to give you. This has provided you.
What I have tried to provide you is a glimpse of our financial performance and how this financial performance has been derived through our physical performance, the status of the ongoing projects and the orders on the envelope. As far as the yard capacity is concerned, we were having a shipbuilding capacity to construct 20 ships concurrently but during 2024 we have enhanced this capacity from 20 to 24 through rejuvenation of our existing facilities and and we feel this capacity itself is inadequate to meet the ongoing and the future requirements. So we have put in capital to revive some of the defund facilities earlier held with us and also through certain long term lease of dry docks from the one of the other agencies in Kolkata. So we intend increasing the shipbuilding capacity from 24 to 28 ships by 2025 year end.
In addition, we are also looking for opportunities outside Kolkata with respect to creation of shipbuilding facilities. This is in line with the growing demand for defense and non defence platforms. And we feel there is opportunity, adequate opportunity. And to meet this opportunity and the potential that is available in the defence as well as non defence market, we will be looking for facilities outside Kolkata and perhaps look for creation of a greenfield facility. I would also like to state that to mitigate the existing limitations with respect to capacity and also to meet the leads that we are getting towards construction of commercial ships. We also got into memorandum of understanding with capable shipbuilders both on the east and west. This in a nutshell gives you what we are looking for in the near future.
And one of our core focus areas would be for capacity enhancement. 2. Technology adaption to improve production efficiency. 3. Development of autonomous platforms where we see opportunities both in the Navy and the Coast Guard. And four, towards development of green energy products.
Thank you ladies and gentlemen. This brings me to the end of my comments. And now I would like to leave the floor open for questions. And we shall try and answer these questions to the best of our abilities. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Vaibhav Dalal from Niveshaay. Please go ahead.
Vaibhav Dalal
Hello sir. Am I audible?
P.R. Hari
Yes, yes you are audible, Mr. Dalal. Please go ahead.
Vaibhav Dalal
Yeah, so congratulations sir, on a good set of numbers. My question is very generic. I just want to ask you on the opportunity of shipbuilding in here in India. So currently how many neighborships do we have in the Indian Coast Guard and the Indian Navy? And how much is the Ministry of Defense planning to add to the respective fleet?
And my second part of the question will be out of the new ships which the MOD is planning to add, the tendering has been done for like how many of these ships? You have any idea? That would be great. Thank you.
P.R. Hari
Mr. Dalal, I’d like to answer this question in two parts. One, as far as the current fleet strength of Navy and Coast Guard are concerned, Navy has got around 150 platforms and coast Guard all put together. When I say platforms they include small vessels like fast intercept aircrafts to larger platforms. Nearly 100 platforms right now. Currently 61 platforms are being built for both the forces put together and of these 6160 are being built by internship yards now coming to their capacity augmentation plans. Both the forces have got their perspective plan and as per what is available in the open domain, both these forces, Navy and the Coast Guard want to expand their numbers Navy perhaps to a figure of +200 and Coast Guard perhaps to a figure of around 150. Why I’m adding the term perhaps is because I do not have absolute clarity on the exact numbers that they are looking at. Now coming to the RFPs which are live as I had mentioned during my initial statement.
Two, in addition to the next generation Corvette project where the bits have already been opened and the formal results are awaited, we expect it to come in a couple of days from now. There are two bits from the services which are active now. One is an 18 fast patrol result next generation pass patrol vessel for the Indian Coast Guard and five ship next generation subway vessel project for the Indian Navy in addition to that again as I mentioned, multiple projects are on the anvil where in few cases they have already obtained the DAC approval. For example the 12 mine countermeasure vessel project for the Indian Navy, the P17 Bravo project, it’s a seven ship project for the Indian Navy, two multipurpose vessels for the Indian Navy, six next generation offshore petrol vessels for the Indian Coast Guard and so on. So I’m trying to convey is that what is available right now the order book of the Indian shipyards and what is likely to come up in the near future. The opportunities are phenomenal. Does it answer your question or you want something more? Any further clarification you need?
Vaibhav Dalal
I think I’m good sir. Thank you so much for your answer and best of luck to you. Thank you sir.
P.R. Hari
Thank you.
Operator
Thank you. Next question is from the line of Harshit Kapadia from Elara Capital. Please go ahead.
Harshit Kapadia
Hi sir. Good evening and thank you for giving me the opportunity. And congrats for a very good set of numbers. Just wanted to give get a sense on the order book breakup, you know project wise. And secondly on the order inflow which you have pipeline which you have mentioned. Can you also give the size what is a tentative order size which can one can expect. And on the NGCU I said in few days will get to announce the order as in the bids will be out in few days or what is the likely — is there any LOI which is expected? Anything clarity on that?
And lastly on the other expenses side sir if you can explain. You know there was one provision write back which you did of 433 crores. So what was that related to? And by when this completely amount will be dispensed out as in would be added back to the profit? Yeah. Thank you.
P.R. Hari
Thank you. I will start with the order book breaker. As I mentioned our order book stands at 22,680 crores. And P17 Alpha still continues to be our the biggest blood owner. We are left with around 11,435 crores from P17 Alpha Project. The Anti Submarine Shallow Watercraft Project 3946 crore. The survey vessel a large project. It is actually on the angle of closing. So 530crores. The offshore petrol vessel NGOPV project 3327crores. The non defence platforms. The NCPoR ocean research vessels 785crores.
The acoustic cruiser ship 466crores. The ferry project 226crores. And the export projects. The multi purpose vessel dredger and so on around 1200 crores. And the 30mm gun project 201 crores. So this is the order breaker now coming to you had asked a question about what is the likely the value. Value? Yeah, value of the project that are on the anvil. As I had mentioned the next generation Corbett project is a hybrid value project. And here we expect. Our anticipation is that the total order value could be to the tune of 40,000 plus crores. But this 40,000 crores would be split between two shipyards. With the L1 shipyard getting five ships. That means five by eight. Which means the L1 shipyard. The order value could be to the tune of plus 25,000 crores. Which is a very big order coming to the next generation survey vessel.
Our appreciation is that the order value could be to the tune of around 3,500 crores. And the 18 NGFPV project could be to the tune of 3,000 crores. The OPV project could be to the Tune of around 2,500 crores. And the multi-purpose vessel to the tune of around 1200 crores. The Water Jet FAC project, the 31 Water Jet FAC project could be this tune of around 3000 crores. It could be plus or minus 200 crores depending upon how the bidding goes. And the fast interceptor craft vessel to the tune of around 1500-1800 crores. The big ticket items, the mine countermeasure vessel project.
The Aon itself has been taken for 32,000 crores. And that’s a 12-ship project. Single shipyard getting all the 12 ships as per the Aon conditions. And the P17 Bravo project. This again is a high value project. There are two shipyards. There is a fellowship project. Two shipyards would be involved in this project with the total A1 value to the tune of around 70,000 crores. And at this juncture I would not like to give any assumptions on the LPD and NGD because they are still in liquid form. Anymore — you had asked something about this. 433 crores.
Harshit Kapadia
Yeah. INR433 crores of provision write back is something, which you mentioned in the press release. So what is that related? Which and and when it would be…
P.R. Hari
This was linked to the P17 Alpha project. The first, since the first ship is actually at the verge of delivery. I mentioned that the first ship has completed her final missionary trials and she’s actually getting ready for delivery. So we have reasonable clarity on the cost to completion. Accordingly, the provision reversed and we will be. This profit will be accounted over the next one to two years and the entire project gets completed, which means this the three ship project. So the first shift now ready for delivery and the next two ships as I mentioned will be one of them will be definitely spilling over to the next financial year. So this will get regularized within one to two years.
Harshit Kapadia
Okay sir. And is there a possibility this amount can even increase? Since now more ships will be in the compass and will be closer to the completion mode. So probably is there a possibility this increase would be there of INR433 crores? Any number could be higher than —
P.R. Hari
It will be more or less same. Since we know the costing of the cost to — cost to completion of the first ship. The condition is going to be more or less same, which is the positive side.
Harshit Kapadia
Understood sir. And finally sir, an ngc. Sir, you mentioned when is the order likely to be awarded? Sir, this final one.
P.R. Hari
In the normal course of events you’re as much veterans as me. The after the L1 is declared then the contract negotiations start. The contract negotiation is the long drawn process for major projects like this. We expect a very very optimistic timeline of contract conclusion by December this year and a conservative timeline of March next year. But I personally feel if together Whoever is the L1 shipyard and the Navy pushes, the contract can be signed by end of the end of this calendar year.
Harshit Kapadia
Okay sir, I have few more questions. I’ll join the queue sir. Thank you all. Wishing you all the best.
P.R. Hari
Thank you.
Operator
Thank you. Next question is from the line of Rohit from Aditya Birla Sun Life. Please go ahead.
Unidentified Participant
Thank you for this opportunity sir. So my first question is. As I understand, we have close to 230 billion order backlog. And typically we work with a five year execution cycle. Would it be fair to say the current revenue is somewhere the peak revenue? And maybe we will be flatlined given that we already have some 20 yards we work with. And even if the new order, let’s assume hypothetically you get next generation Corvette. It may not start at least before one one and a half year. So is it fair to assume that RB is in a peakish kind of execution phase?
P.R. Hari
Thank you Mr. Rohit Shipbuilding of course the revenue accrual revenue recognition is depending upon the project execution phase. We are now at an execution phase where maximum revenue accrual takes place with our major breadwinner that is a P7 Alpha project at mature state where the maximum number of equipment get lowered and integrated to the ship system. To answer your question, whether we have peaked, I would not like to say so because from our appreciation — okay, I’ll put it this way. When we started the last financial year, our order book was 22,651 crores. And as on 31st March 2025, it is almost same quantum.
That means 2680 crores, which means in the last one year, while we have generated revenue of over 5000 crores, we have also got orders worth 5000 crores. So in our appreciation, the peak year perhaps could be the next year. That is financially the current year. What I mean is financial year 25, 26 could be the peak year. Thereafter it could flat out. And hypothetically, if a big project comes to us, as you rightly said, the revenue recognition from that project will start only two years down the line. The gap which could happen is already being filled up with a plethora of orders ranging from coming from the non-defense platforms and the commercial ships. So to answer your question in a simple sentence, this perhaps is not the peak year. The peak year is yet to come.
Unidentified Participant
Got it, sir I really appreciate that part. My second question is more to do with the competitive positioning. As in we see Musgrove Dock is going for a greenfield expansion. Cochin Shipyard is also planning for a greenfield expansion. They are looking at a port nearby Cochin port and they’re planning something over there. What is our plan? We have been doing some leasing around as such. But is there any concrete greenfield roadmap for us that can take us to another trajectory?
P.R. Hari
Yes. Today with the Ministry of Shipping having started out a clear roadmap for enhancing the share of India in the global shipbuilding market from less than 1% to 10% in a finite period of time, there is a need for all the Indian shipyards to augment their shipbuilding capacity. What we had started was I had mentioned during my initial briefing, our capacity just about two years back was was to construct 20 warships, 20 ships, large and medium put together concurrently. We started off by rejuvenating our existing facilities and enhanced the capacity to 24 ships. Along with that, we had also gone ahead.
With acquiring dry docks within Kolkata, long-term lease dry docks which are ours today. So with this we intend increasing this capacity to 28 ships by end of this year. But we fully acknowledge the fact that this will just not be adequate to meet demand, the shipbuilding demand that is going to be there in the next five to 10 years. So yes, to answer your question, we are as with MDL or as with Cochin shipyard or any other shipyard in India, we are in the process of creating a greenfield shipbuilding facility at this juncture. Since the negotiations are in progress with multiple agencies both on the west and east coast. All I can say is that yes, we too are in the process and we expect clarity on this in the next six months to nine months.
Unidentified Participant
Got it sir. So my final question is more on the industry perspective part. This naval perspective plan of 200 vessels that we had in the past. It seems that there is some sort of a delay both in terms of awarding and subsequently the commissioning of the vessels. Is there a strategic realignment that is happening at a country level or some sort of a — the priority is is going backwards on naval front and probably are putting more on electronic warfare funds. Because we have been reading a lot of these defense analyst reports.
You know who has been saying that even the Chinese threat that we face is more towards the territorial part and not on the naval part. And we have had a military exercise in the past, I mean just few weeks back where we saw it more of electronic warfare. So I’m just trying to understand what happens to this naval perspective plan of 200 vessels. And we have also seen next generation Corvette getting delayed for a long time. AON has happened a long way back and yet the awarding hasn’t taken up in a. The last big order I could make at least was with ngopv. So is there any thoughts on those aspects?
P.R. Hari
Okay, I’ll put it this way. Yes, Navy has. I actually wouldn’t like to agree with you, not nor would like to disagree with you. But I’ll put in a completely different perspective. For any nation, any nation to be a global power, she has to. She means the nation has to have a blue water navy. And India’s coastline from around 7,600 km have gone up as per the latest survey to 11,000 plus kilometers. So there is no way that the naval province. That means the plans for navy to augment or coast guard to augment their capability is diminishing. Even in the current situation, the deployment of naval platforms is available in the open media. Now coming to the ships under construction.
When I say 61 ships under construction, 61 warships under construction, this is no mean number. 61 is the number of platforms many nations put together own. 61 platforms are under construction and of these 61, 60 are being built by Indian shipyards. The numbers if you are looking at 18 NGF that is next generation fast patrol vessels. 6. 5. Sorry. 5 survival large 18 plus 5 23, 31 watered FAS. You add this number plus 120 FICs, plus 8 NGC’s. These numbers are no mean numbers. Yes, the processes take time, but when this, when these fractify, the construction phase starts.
Even the ngp, as per our own procurement timeline, from the time an AON is accrued by DAC, the acquisition rather the Ministry of Defense has a 30 month period which is a defined 30 month period for issuance of RFQ. They have done it well within that time. So I. I don’t see there is a shift in focus in developing the maritime capabilities. And I have just stated the numbers. The numbers are here for you to see. And I In our own perspective, from GRC’s perspective, of the 16 platforms which we are currently building, four of them we are one of we already delivered in the current calendar year. And three more of them we are confident delivering in this calendar year plus one more in the financial year. So I do not see any, any dilution be it from the government or from the shipyard perspective with respect to focus and delivery. Delivery in terms of placement of order. Delivery in terms of publishing the rfp. Delivery in terms of active delivery of the ships. Thank you.
Unidentified Participant
Thank you sir.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to two per participant. We take the next question from the line of Dhavan Shah from AlfAccurate Advisors. Please go ahead.
Dhavan Shah
Yeah, thanks for the opportunity, sir. So my question is on the agreement that you are signed with the Western best player Swan Defense. So what is your strategy and plans over there? If you can share thoughts on this?
P.R. Hari
Okay. Swan Shipyard with respect to infrastructure. They are one of the biggest shipyards in the country with Dryadoc, which is perhaps the largest in the country. And the infrastructure is one of the best in the country. As what is available in the open media and as you’re fully aware, the facility has not been utilized for some time for reasons known. And as a shipyard which is located in Kolkata, with the current order book that we are executing and few assured orders which are on the Anvil, we felt it necessary to open a front in the Western Front. Front in the Western front where we can partner and build commercial business. It is with this intent that we signed an MoU with SWAN where we will be jointly building commercial ships of the large size. It’s an MOU at this juncture we are negotiating with few clients for orders. And once these materialized, the MoU will get translated into an actual co production. Thank you.
Dhavan Shah
Understood, sir. And. And normally in a year time frame, how many ships do you foresee that can be manufactured? Commercial ones over there?
P.R. Hari
You meant commercial ships —
Dhavan Shah
Yeah, yeah. In the. In this one. Defense, you know the location.
P.R. Hari
It purely depends upon the order. Like I’ll put it in a different perspective. Right now I am executing an order for a German client for eight multi-purpose vessels. These are medium-sized ships, advanced platforms, but medium-sized ships there. The contractual delivery timeline for eight ships put together is four years. So depending upon the size and complexity of the ship, this duration varies. It could be the first ship could be delivered in a period of three years. Because the first ship always takes time. The follow-on shifts that the second, third, fourth in a series of four. If it is a series of four, could be six, six months thereafter.
Dhavan Shah
Understood, sir. Yeah, that’s all from my side. Thank you.
P.R. Hari
Thank you.
Operator
Thank you. Next question is from the line of Divya Shah from Uchit Capital. Please go ahead.
Unidentified Participant
Hello sir. Congratulations for a excellent result and first of all our best compliment to all Defense department of India. Because of the operation Sindur, we realize the importance of defense. So I convey my heartiest congratulations to through you to all three Defense, Army, Navy and Air Force. Kindly convey to respective departments sir, we Indians are proud of you sir. Regarding the carry forwarding the last question about Swan Defense Sir, I want to know what we have. Whether we have taken the full Swan Defense facility or the part what is the understanding between the two companies? What will the financial implications? Whether it is in revenue sharing or a lease agreement over how it will be carry forward. This is my okay. Any more questions? Then I will answer together. Any more questions? Yeah. Second question is same regarding. We have entered lease agreement with Shama Prasad Mukherjee Port Kolkata. So what will be the financial implications of this agreement? Whether and what will be the the payout per year for this facility? How many ships we will be building there? These are my two basic questions.
P.R. Hari
Okay. At that outset let me thank you for congratulating the Indian Armed forces. And since we deal very closely with the services, we shall convey your appreciation to the services coming to Swan Defense. The agreement is project specific agreement which means whenever a project is executed it will be based on a revenue sharing model. Again project specific. As the project comes, we will conclude the terms and conditions of the project coming to Shyama Prasad Mukherjee Port. We have taken over three dry docks fully from this port and these are taken on a long term lease.
We are paying them a nominal rent and we have a profit sharing methodology with them. In addition, we have also taken over one more dry dock very recently. It’s the 125 meter by 25 meter dry dock again on a similar model. Now what we intend doing in these facilities for dry dock and just to put you in the right perspective, dry docks are very vital towards shipbuilding and ship repair. Since our primary facilities within the physical confines of the company, my three shipbuilding units are focused on shipbuilding and since we wanted to venture into ship repairs. Not today, it is almost three years back, we decided that we must have a facility which is completely separate from the shipbuilding facility. So it is. There’s no dilution of attention.
And that is the reason why we took over these facilities from Shama Prasad Mukherjeel Port. And so far we have completed nearly 41 refits in this facility including multiple Costa ships and naval ships. And we will also be executing the refit of an export platform there. This is on a profit sharing methodology with them. So far the project, the project relationship has been successful. Thank you.
Unidentified Participant
And sir, regarding what will be our total capacity. Suppose everything goes well with Shyama Prasad Mukherjee and others which you have talked just now. So from 28 where we will reach in next three years? shipbuilding capacity. Y
P.R. Hari
Yes, yes. As on today it is 24. 25. 24. It is our intent to increase to 28 by end of this year which we are well on track and we are confident of meeting this target. And since you asked this question, two to three years downline including I’m keeping the greenfield facility, what we have in our plants away from the current discussions because that is still in liquid format and under discussion. So with the facility in Samarpasad, the Mukherjee port and our existing facility including rejuvenation and modernization, we intend taking it up to 30 within the next few years. How much or how much please? I missed? 30 ships.
Unidentified Participant
And sir, one more last question. Sir, this year we had excellent EBITDA margin of about 13%. Sir, same margin is sustainable or it is one of. Sir, will you please guide us for the future?
P.R. Hari
Very interesting question. Since you mentioned one off. It has not been one off. It has been fribbler similar margins over the last few times. Yes, this time we have touched a new high. It is certainly not. It’s not one off. But in shipbuilding you. Ideally we shouldn’t be doing a quarter to quarter comparison. You take a year. Because most of our projects are long drawn projects where the execution stretches over a period ranging from for a small platform to a big platform, five to six years. So to answer your question, we will be able to maintain more or less the same margin. It’s not one of anyway.
Unidentified Participant
Okay sir, thank you very much.
P.R. Hari
Thank you.
Operator
Thank you.Thank you. Next question is from the line of Utkarsh Somaiya from EIKO Quantum Solutions Private limited. Please go ahead.
Utkarsh Somaiya
Thank you for the opportunity. Just like you mentioned your delivery timeline in the beginning of the call. Can you quantify it your wise that how much can you execute in FY26 and probably 7 and 8. Just a ballpark would help. I will give you a ballpark. Thank you. Thank you for the question. I’m sure you’re asking.
P.R. Hari
Ballpark numbers. Correct numbers in terms of number of ships?
Utkarsh Somaiya
Number of ships or revenue, either — revenue?
P.R. Hari
I would rather go by number of ships. Just one second. Yeah. So in 2025, 26 we will be. I will also try and correlate with revenue. So to get a general idea though I will not get into specifics but I will try and correlate with the projects. You can, you can you make an estimate? So in 2025, 26, we will be delivering one P17 Alpha, two survey vessel large and four anti submarine shallow watercrafts. That itself covers four two one seven ships. In 202627 we will be delivering two P17 Alpha. These are major high value projects.
Three that the last three survey vessels. Sorry, last three anti segregation water crafts and one next generation offshore petrol vessels and the acoustic research ship. And the next year, that is FY 2728 we will be delivering two next generation offshore petrol vessels, the oceanographic research vessel and the coastal research vessels for which we are going to sign the contract. Now I have not mentioned about the hybrid ferries that we are building for the government of West Bengal or the Treasure because these are small value projects which will get covered during this period. Maybe this year itself will be able to deliver a couple of ferries and so on. Does that give you an indication? Because the majority of project There’s a P7 Alpha first ship this year and the next two ships next year.
Utkarsh Somaiya
Right? Yeah, that helps. And the realization per ship would vary in each case, I’m guessing, right?
P.R. Hari
Yes. Yes. Because the P7 and Alpha as I said mentioned P7 Alpha, the remaining revenue is around 11,000 odd crores.
Utkarsh Somaiya
Right. Okay. Thank you so much. That’s helpful.
P.R. Hari
Thank you.
Operator
Thank you. Next question is from the line of Sanjeev Zarbade from Antique Stock Broking. Please go ahead.
Sanjeev Zarbade
Hello, good afternoon. Yes, sir. My question was regarding the outstanding order book in P17. We have 11,400 or crore. So what would be the ballpark account revenue that we May book in FY26 and FY27? Will it be in the ratio 1.
P.R. Hari
Your voice is cracking. I mean can you repeat once again? I couldn’t decipher what you tell me.
Sanjeev Zarbade
Hello. Hello. Hello. Hello. Yes, sir. Am I audible now?
P.R. Hari
Yes, you are audible please.
Sanjeev Zarbade
Yeah, yeah. Sir, sorry for the the disturbance. Sir. My question was regarding the P70A in which we have 11,400 crore order. That that order book that is pending. So how the distribution in the sense that revenue booking would be in FY26 and 27, although you shared the delivery timelines. But would the revenue booking be also in the same kind of ratio in the sense more would be booked in FY27 because we would be delivering two vessels in FY27 or would it be at the other day round?
P.R. Hari
Yes, we have around 11,400 crores remaining as on 31st March 2025. And one of these shifts we intend delivering in next three months. And in this ship we have accrued most of the revenue. And the bigger chunk of this would be coming from them second and third ships. So. So if you. If you’re asking me for a proportion of revenue from the project which is going to be accrued this year and next year, I would say 40. 60.
Sanjeev Zarbade
Okay. 40 in FY26 and 60 in 27.
P.R. Hari
FY27.
Sanjeev Zarbade
60 in 26 and 40 in 27?
P.R. Hari
40 in FY26 and 60 In FY27.
Sanjeev Zarbade
Okay then in that case, sir, FY27 could be the peak year in terms of revenue.
P.R. Hari
You take a guess. Maybe. Maybe this year. Because see the other projects are also maturing now because we got around 4,000 crores remaining in the ASW shallow watercraft. Around 3,000. I mean what to an earlier query I had mentioned there’s a very specific question asked. Are you flattening out the flat? Are you flattening? I said no. So I think that should give you a good enough.
Sanjeev Zarbade
Yes. Yes. And sir, on the cost revision side, if I understand it correctly, for the remaining two frigates there is potential that we can book another 200 crore cost division in terms of profit because for the first project we may have, we have taken 100 crore as cost revision related profits.
P.R. Hari
Yes, your understanding is more or less correct.
Sanjeev Zarbade
Okay. All right, sir. And all the best for the future and keep doing well. Thank you so much.
P.R. Hari
Thank you. Thank you.
Operator
Thank you. Next question is from the line of Sunil Shah from SRE PMS. Please go ahead.
Sunil Shah
Yeah, thanks for the opportunity, sir. First of all, hearty congratulations to everybody. I think my friend Vivesh Bhai has already mentioned that in the beginning. But really a heartfelt bow to each one of you for the action that has happened in the last month. So sincerely congratulating everyone. Sir, just my two questions here. In next couple of days, we will be hearing on the next generation Corvettte project, which has been long pending. So what should be announced in next couple of days? Would it be that L1, L2 would be decided and thereafter we get into a process of negotiating on the price. How does it work for a layman like me to understand this thing? That is my first question. The second question is since now we’ve got a tie up with Swan Energy, Swan Defense. So we are. Last time when we had met ups, we are talking about clusters which you know Indian government is looking at for shipbuilding. Now that we have got into an MoU with swan, does that take care of the cluster thing that we were intending to use eventually for our growth? Those are my two questions on the Swan and on the next generation. Thank you sir.
P.R. Hari
Okay, thank you Mr. Sunil Shah. And at the outset thank you on behalf of. Because since we are a Ministry of Defense entity on behalf of the Indian Armed Forces, thank you for your good wishes and appreciation. Coming first to Swan and Clusters, I would like to clarify and clearly that I had answered to an earlier query. We have MOUs or agreements not only with swam, we also have with competent private players, private and public players for collaboration towards the construction of vessels. I’ll give you an example. I have a running collaboration with one of the south based shipyards for construction, part construction of few of the vessels. So these are project specific. And. And this has got nothing to do about the clusters that I mentioned. A cluster.
What the Ministry of Shipping had thought about and what we expect to be implemented was creation of a greenfield facility. When I say a greenfield facility which would mean a shipyard surrounded by its ancillary industries. This is still in liquid form. Multiple state governments, these are all open domain information. Multiple state governments like Gujarat, Maharashtra, Karnataka, Orissa, Andhra and Tamil Nadu have evinced the interest and approached various shipyards and also floated the expression of interest for creation of greenfield shipyards there. And we have also responded responding to few of this. The SWAN relationship for shipbuilding collaboration is project specific, restricted to large size commercial ships. And I would again like to reiterate that we have a similar relationship with multiple shipyards and a few of them we already exercised and successfully.
Coming to your first question on the next generation Corvettes, what is likely to happen in the next couple of days is the L1 declaration and L2 declaration by the Ministry and Navy. And this will be followed by a natural process of contract negotiations depending upon the complexity of a project. This project definitely is a complex and high-value project. This could take in my appreciation a very optimistic timeline of around six months from now. That means let us say December this year. The concrete conclusion or a conservative timeline of another. You add another three months, March 31, 2023. I hope this clarifies.
Operator
Thank you. Next question is from the line of Hardik Gandhi from HPMG Shares and Securities Private Limited. Please go ahead.
Hardik Gandhi
Hello, sir. Kong, can you hear me?
P.R. Hari
Yes, I can hear you. Please go ahead.
Hardik Gandhi
Yeah, so thank you for the opportunity and congratulations for the good set of numbers. So just two questions from my end. First, on execution side, are you seeing any headwinds? And second, being that I know we usually this question comes up, but given that Mazgaon and Cochin are in a similar industry, their operating margins are quite high as compared to us. Of course we’ve bettered our margins over the quarters, but. But again, is there a scope for further improvement or are we seeing margins staying at these?
P.R. Hari
Okay, thank you for the question, Mr. Hardik. I will answer the second question first regarding margins. Conventionally, one of the shipyards whom you mentioned has been operating on projects which are awarded on nomination basis. The second shipyard, what you mentioned, has been operating on ship repair projects primarily. And another nominated very high value project. And we have been more or less operating on projects one on competitive bidding. As of now, all the projects that are coming out from the services are on competitive bidding. So while we have improved, there could be a situation where all the Indian shipyards, in addition to the shipyards that you named, will be at an even platform.
With respect to margins coming to the headway. I’m sure you would have. Your question would have been specific to the project progress. Yes, we are happy with the project progress despite the challenges faced and the cascading effects of the COVID which many. The impact is even after five years there are. There is impact. But we have surmounted these challenges effectively. And that’s how the ships are getting delivered. I just made a specific mention in my introductory talk regarding one particular project which is the matter of great pride for us and every for all. I would like to state this, that There is a 16 ship project being constructed for the Indian Armed Forces, that is the Indian Navy, the anti submarine shallow watercraft project.
The first of these is being built by two shipyards. Eight by us and eight by another shipyard. And we are proud to state that our first ship has already been delivered and will be inducted into the naval fleet a month from now. And the second ship also has undergone the contractor sea Trials. The first P17 Alpha is ready for delivery. Two months from now. The ship will be delivered. So yes, there is definite headway. And with the figures, the numbers that I mentioned regarding delivery of ships to an earlier, earlier query, we are confident of meeting the timelines that we are committed to our customer for the ongoing projects.
Hardik Gandhi
Understood. So just to follow up, is there any supply chain issue at present given the geopolitical tension as well as like if, if and how much are we importing from outside and is there a bottleneck there?
P.R. Hari
See as of now, no, no direct impact as of now. Yes, there is import content especially for the export platforms that we are building. But the sources from where we are procuring, they have not been impacted by the current situation. And considering that the situation overall, including the conflicts at various parts of the globe are still going on, still we are not faced any, any impact and we do not see any impact in our supply chain with respect to the ongoing projects that we are executing.
Hardik Gandhi
Understood sir. Thank you, sir. All the best for the future.
P.R. Hari
Thank you. Thank you.
Operator
Thank you. Next question is from the line of Parimal Mithani from Credential Investments. Please go ahead.
Parimal Mithani
Sir, thank you for opportunity. All my questions are answered. And sir, congratulations to you and your team for wonderful set of numbers.
P.R. Hari
Thank you. Thank you Mr. Mithani. And we acknowledge your appreciation. It means a lot to us.
Parimal Mithani
Thank you, sir.
Operator
Thank you. We take the next question from the line of Vikas Kasturi from Focus Capital. Please go ahead.
Vikas Kasturi
Good evening, sir. And first of all, congratulations on a fantastic financial year. And also thanks to you sir, Amodar for answering all questions with so much patience and such detailed responses. Thank you, sir. Sir, I had just one question. So with respect to the ships that we are going to deliver, is there any retention amount that the client will withhold as a warranty or a guarantee kind of a thing?
P.R. Hari
As per the contractual — thank you — thank you for your appreciation. And as per the contractual terms, a certain percentage fee in washbuilding orders, which majority of the orders are washy building orders. In all these contracts, as per the DAP, based on which these contracts are formulated, there are various stage payments. One of the stage payments is the retention of, I think, 10% of. 10% of the project cost till completion of the guarantee refit, which in the conventional sense, the guarantee, if it will happen one year, it means we are bound to provide one year of guarantee. And once the guarantee period is completed, the ship will undergo a guarantee, and on completion of that, the retained amount will be paid.
Vikas Kasturi
Got it? And this is more or less this 10% is withheld for all ships, all your platforms?
P.R. Hari
Pardon me. So this 10%. Yes, yes, yes, it is. It’s purely as per the DAP and for all the orders that are being executed. And this is applicable in my appreciation to all the shipyards executing similar orders.
Vikas Kasturi
All right, sir. Thank you, sir.
P.R. Hari
Thank you. Thank you.
Operator
Thank you. We take the last question from the line of Vaibhav Dalal from Niveshaay Investments. Please go ahead.
Vaibhav Dalal
Thank you so much, sir, for taking my question. Again, I just have a question around a very specific product which is being used in your shipbuilding. So these are the bulbars which are used in the construction of the hull of a ship. So I just want to understand, like, how much bulbars are required in the overall making of a ship in terms of volume as well as in terms of the value value of the ship?
P.R. Hari
Very interesting question, and it’s a very unique question that I am facing. I’ve been attending analysts and investors meet. Now, this is my 12th meet running. Yeah, 12th or 13th meet running. Very interesting question. Bulb bar. Since I know shipbuilding, I can answer this question. It is around 10% of the overall steel. So in terms of the weight of the ship or the displacement of the ship, I’ll put it this way. See, in a ship, let us say, when we talk about a 3300 ton ship. When you say 3000 ton ship, the steel weight would be around 2000 tons, 1800 to 2200 tons depending upon the type of steel that is being used. If you take a warship, in warship there’s a particular type of steel which again is Open domain information PMR249 Alpha Steel which is used. So this could range depending upon the size, type and the type of platform. Sometimes the steel, thin steel is used for the hull. Sometimes thick steel is used. Various types of thickness is used in a particular ship.
So this, if you take a ballpark figure, this comes to 1800 to 2000 tons of steel in a 3000 to 3300 ton displacement ship. The balance weight comes from the equipment and systems, that is the plumbing, the main propulsion system, blah blah blah. Now within this, within this 2000 tons around 10% comes the bulbars.
Vaibhav Dalal
Thank you. Got it sir. Yeah. And my last question will be sir, like, so where do you source these bulbar from? Like are you importing these or are there any domestic players you are buying these bulbars from and already precured? Yes, and to the last. Yeah sure.
P.R. Hari
Please do it. Please go. You’re asking something.
Vaibhav Dalal
So my last part of the question will be like, since there are 61 warships, which are being made here in India. Like out of the 61 warships, 60 are being made in the Indian shipyard. So I just want to understand like has the procurement for these bulbas already been done shipyards or the process is still going on? Like, just want to understand that?
P.R. Hari
Okay, I will, I will answer this question in a broader perspective. Shipyards are platform integrators. Big time platform integrators. We source equipment, Everything is sourced starting from steel to Finsey mentioned bulbars to the piping material to something as minor as cables to cable clamps, to cable trays to you name it, two major equipment. We are platform integrated as customers, the Indian Navy or Indian Coast Guard they do the capacity and capability assessment of suitable firms, make them eligible in certain category of equipment. Like, like main propulsion system, main propulsion engines.
Maybe for example for a project may be shortlist based on the capacity and capability four forms. Similarly for steel, the Navy or the Coast Guard determine who are the qualified sources from whom steel is to be procured. They go through a capacity assessment by the customer coming to bulbar, your specific question on bulbas. Bulbas are also not indiscriminately procured. They have to be procured from the sources. Rather the manufacturer were qualified by the customer. That’s the name. The shipyards are provided with this list and the shipyard go through a procurement process and source them from these firms. So since you asked this question, any firm who’s considering themselves capable of manufacturing bulbarks to answer your specific query, can get themselves registered with Navy, get a capacity assessment done, get that formally communicated to the shipyard, to Navy, and the shipyards would definitely buy from them.
Vaibhav Dalal
Thank you. And just to add up a follow-up here, sir, so do you have like any approved suppliers from the Navy on this? Like are there Indian suppliers or like suppliers from —
P.R. Hari
Question Indian suppliers. So we have Indian suppliers.
Vaibhav Dalal
So do you have any name, like on top of your head, sir?
P.R. Hari
We will not be able to answer this question. Now if you have any specific query, what I would suggest is that you ask Navy about the specific question. They’ll be able to provide you absolute clarity on who are the firms who are qualified to build, sorry, fabricate the bulbas. That would provide you a clearer answer than what I would be able to provide in an investors meeting. Sure sir. Thank you so much, sir. And thank you so much for taking my question. Have a great day. My pleasure. Thank you. Thank you.
Operator
Thank you. Ladies and gentlemen, in the interest of time, that was the last question. I would now like to hand the conference over to the management for closing comments.
P.R. Hari
Thank you, Navya. And thank you, Gaurav from Concept IR for organizing this conference call. I would like to pay my sincere gratitude to all my analysts and investor friends who have taken time out of their very busy schedule and listen to what I had to say and also ask very interesting queries ranging from profit margins to Bulbas. Thank you and looking forward to the next time we meet. Thank you.
Operator
[Operator Closing Remarks].