Garden Reach Shipbuilders & Engineers Limited (GRSE) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the conference call of Garden Ridge Shipbuilders and Engineers Limited, arranged by Concept Investor Relations, to discuss its Q4 and FY26 results. We have with us today, Commodore P. R. Hari, Indian Navy, Retired, Chairman and Managing Director, and Sri Niranjan Mukund Bhalerao, Director, Finance. and CFO, and Shri Sandeep Mahapatra, Company Secretary and Compliance Officer. Please note that this conference will be recorded. I would now like to hand over the floor to Kamadur P.R. Hari, Chairman and Managing Director. Thank you, and over to you, sir.

Thank you. Good afternoon, ladies and gentlemen. And a warm welcome to each one of you. And I welcome each one of you to the Conference Hall of Gunway Street Builders to discuss the results for Q4 and financial year ending 21st March, 2026. With me here are Sri Niranjan Balai Rao, Director of Finance and Chief Finance Officer, Srimadhi Abarajita Ghosh, Chief General Manager of Finance, and Sri Sandeep Mahapatra, the Company Secretary. And over the next few minutes, I shall give you a glimpse of our financial performance and thereafter highlight the physical performance that has resulted in the company recording strong numbers during the last financial year. I shall also touch upon the current order book. I'm doing projects, orders on the axle. Expansion plans. 6th March 31st. This has been the result of an equally robust... We have recorded our best ever financial performance. It was rupees 2,119. Good morning, everyone. So, it is 7,002 crores. Thank you. 748 crores, registering a growth of 42%. The financial year has been excellent for us, and so has been the quarter. Our core business continues to be... Thank you. We also launched of 19 platforms. These 19, of course, we include 13 hybrid ferries that we are building for the government of West Bank Oil. So 13 ferries plus 6 more platforms. We have done the key link during the last year. Coming to the other business vertical. Seven naval surface guns were delivered during the last year, and four of these have successfully completed the sea acceptance trial. We also delivered 110 portable steel bridges. As you are aware, we have a daily bridges business vertical, and during the last year, we delivered 110 bridges, including 30. I am happy to inform you that the revenue from this particular vertical has touched a 200-plus course for the first time in the history of that vertical. Thank you. Actually, I'm happy that the order book has dropped below 20,000 crores. In the last five years, the first time that the order book was dropping below 20,000 crores, and in my appreciation, there's an indication. Project, conquesting of 39 platforms. One more ship is yet to be delivered. The anti-submarine shuttle watercraft project, we have four ships. Thank you. Thank you. and physical progress of construction, and we intend delivering this shift during the current calendar year. The project is on schedule. Coming to the anti-separation of watercraft project, this is an eight-shift project and of these eight shifts. Four have already been delivered, and the remaining four shifts. We have about 80% physical proof because of construction, and the basin trials have been completed, and we are preparing them for the contractor fee trials, and we intend delivering these shifts by the mid of the calendar year. We are completing this project also. This is a four-ship project, and the first of these ships have reached the stage of launch, and the launch of this vessel is planned on 20th of September. The progress of production and construction of the remaining ships is also satisfactory. Thank you very much. Coming to the other projects, the non-defense project, the ocean research vessel, this we are constructing for the Ministry of Earth. The ship that we are constructing for the DRDO, the ship has touched almost 20% physical progress of construction. And the ferries, the 13 ferries, fixed the 200-pack... And the first two ferries, of the 100 packs, are expected to be launched. This project shall be completed by the end of the current financial year. Now coming to the two export projects, as you are aware, we are executing a project for a German plant, the 12-ship multi-purpose vessel project. One of the project milestones of three of the ships have already been completed, and the project is on track as of now, and the last project, the project that we are executing for the government of Bangladesh, a project on track, and we intend launching this vessel during the current financial year. We plan for the orders in hand. What is on the anvil? The orders on the anvil, as you are aware, that we are the L1 for the next generation COVID project. The price negotiations have already been completed, and we are awaiting the formal signing of contract. The date is not fixed. It could happen any of these days. The order value is to the Q&A for 133,000. One for the Indian Navy and two for the Indian Coast Guard. The multi-purpose result for two of these ships, the tender is already out. We expect the order value to be to the tune of around 1,500 crores. In addition, three projects where we expect the RFPs to come out in the next three months, 120 bus interceptor craft projects for the Indian Navy. The order value is to the QN of around 3,500. The 31 follow-on water jet FAC project, again, for the Indian Navy, about 3,500 and seven T-17 Bravo ships. The AON cost, the AON, as you are aware, has already been accorded. We expect the RFP to come out in the next three months, and the order value is likely to the QN of around 70,000. This is in addition to the 12 mine countdown measures, the same CMV project again for the Indian Navy, the AON values around 32,000 crores and four landing platform dock LPDs. The order value is likely to the tune of around 35,000 crores. I have not included the next generation destroyers or any other projects which I yet do. These are the projects. What I've listed out are only the projects where AON has been accorded and as we appreciate. There's a 120 FIC, a 31 follow-on waterjet FIC, and a 70-17 Bravo. We expect the RFP to come out in the next three months, and other two projects, the mine contamination and the landing platform DOC, most likely during the current financial year. And the total estimated order is to the tune of about 1,50,000 crores, excluding. We've been discussing earlier the aggregated demand of the domestic requirement of commercial vessels aggregated by the Ministry of Shipping. Now it has gained traction and four tenders are live, four platform support vessels. 4,200 to 1,500. Thanks, sir. Gas carriers, VLGC, and six Afromax vessels. Definitely, we would be taking part in these centers. This, in a nutshell, gives you the visibility on the opportunities that are currently available. Thank you, Glenn. Expansion plans are on the right track. Give you the perspective of our current superlinks capacity. Twenty-eight. of projects that the modernization projects within our premises, this capacity will get increased to 32 ships by the end of the calendar year. And the projects that we have taken on for expansion... The demand for platforms that has already been aggregated by the Ministry of Shipping. So I have broadly given you a glimpse of our financial performance and how the strong physical performance during the last year has resulted in this financial results. Give me a glimpse of the order book, the execution plan. The orders on the anvil and also touched upon the expansion plans. I have finished, ladies and gentlemen, and you may like to ask any questions as appropriate. The moderator may take on, please.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. is from the line of Amit Dixit from GS Investments. Please go ahead.

Hi. Good afternoon, everyone, and thanks for the opportunity. First of all, congratulations for a very robust quarter and a year, sir. A couple of questions from my side. The first one is on if I go through the statutory committee of defense reports, then something very striking that if you look at the summary of contracts that are expected to be signed over the next two years, These have gone down substantially. In the last report, it was around 42,000 crores. In the report released in March, it is only 18,900 crores approximately for warships and survey vessels, that particular category. So in that light, I just wanted to understand that how do we look at, you know, the focus of the government in the near term on these warships and survey vessels. That is our core area. So, that is the first question.

Thank you, Mr. Amrit. Now, when the figure of 18,900 crores has been allotted for the shipbuilding, defense shipbuilding, in my position, there is a fund outflow during the particular year. But as you are aware that the government, including during the last year, perhaps even during the last-to-last Defense Acquisition Council, I have given a green signal for multiple projects what I have listed out. So the government focuses on worshipfulness there, and it is evident from the fact that... These RFPs are being promulgated online by both the major end-users, that is the Navy and the Coast Guard, and also the fact that these RFPs are getting translated into contracts. That's why my first statement was that the NGC project is live and we are the L-1, and the offer value is to the tune of 33,000 crores only for us. Figure what you have mentioned. is anticipated from these projects during Thank you.

It's a very macro. Considering the current warfare that is there and the TCPR of the government, where there is a lot of focus on autonomous vessels, on drones, on, you know, new age electronics, so where do you think the traditional platforms like, you know, corvettes and destroyers, you know, stand or stack, isn't the relevance of these traditional platforms? That is part one. Part two is that how GRSE is... kind of vehicles or vessels or, you know, some kind of, you know, modern ships or the small ships that are, you know, being increasingly used in modern warfare. So are there some investments that we are kind of, you know, making in that front? Or what is your strategy on that? I mean, it's a five-year question, not something that can be done in next year or something. So just wanted your thoughts on this.

I am completely right that there has been an increased focus on autonomous vessels. What is visible outside is the fact that the current situation brought the focus of the government to the fore. But otherwise, again, the Indian Navy has got an autonomous roadmap almost. Even before the current situation is plated to the state where it is now. So it is just that... This is coming to focus. Now, even while autonomous... In a larger manner, a larger little bit. Like, terms with the... One, they provide heavy-duty muscle in terms of armament. Second, they have huge endurance, sometimes endurance to stay. platforms of all ranges. We had and had ventured into We start off in all three dimensions, what I mentioned. Thank you. One of our products has been supplied to, provided to one of the DRD organizations. We see opportunities here, and we are an integral part. That is make one and make two. Thank you. This project to the customers. So, it is moving in the right direction, and as with... We are focusing on autonomous platforms, and in the next three to five years, we will be gathering further momentum.

Thank you so

much and all the best.

Thank you, Mr. Harshith. The order book breakup, as I mentioned, the total order value, order book value is 15,324 crores, and about 95% continues to come from shipbuilding. So the shipbuilding orders to the tune of around 14,730 crores. And within the shipbuilding, the P-17 Alpha project has... About 5,868 crores remaining, and the anti-discipline shell watercraft, about 2,035 crores, and the next generation offshore patrol vessels, 3,168 crores. So the warship building orders are to the tune of around 11,361 crores. Coming to the non-defense... Ocean results, 749 crores. Two of them we are doing, 160 crores, the acoustic research ship, 156 crores. Thank you. One thing is that the non-defence segment, now we have about 22.5% of our total.

So my second question is, sir, on the 31st of March, when you reported your provisional revenue figures, and on the result date, when you gave out the numbers of revenue, there was a huge data, as in it was very positive, of course. But what would be the reason for this difference, sir, if you can explain? Because generally, historically, we haven't seen such a huge difference between the provisional number and the actual revenue figures, sir.

Are you happy or not happy?

Of course, sir. Very happy, sir.

Okay. Since you are happy, I am sure you are keeping track of our progress at the physical milestone. A couple of ships, not couple, three ships were delivered on the last day. The revenue recognition, the LIOSO with the Navy, all these aspects are going on. That is the reason why we went for a conservative. All this happened, and when we formalized the deliveries and handed over the results, the revenue appropriately was recorded, I mean, realized from these shifts, and the total revenue now comes to our best figures of 7,000 in course.

Follow-up question is, sir, on the NGC order, if you remember, sir, the last time when we met, you are very confident that probably we will be getting this order in the month of March 2026. But today also you mentioned that price negotiations are going on. You are expecting the order to come soon. So where is the hiccup, sir? Where is the delay? And by when do you think the NGC order would come? In addition to this, you also highlighted certain smaller projects like 22 water jets and other smaller size projects. Now, are there two winners or it will be a single winner if you can highlight?

Okay, thank you. First thing, I would like to clarify that the price negotiations are completed. Actually, when we said at that stage itself, the price negotiations were completed. They have been completed. We were expecting the contract to be signed by 31st March because at that point of time, the contract negotiations, the terms and conditions, those aspects were in progress. We very optimistically... Appreciated that it will get completed by 31st March. Our current assessment is that the contract could be signed, would be signed during the current quarter, that is Q1. It is almost the right direction, no red flags so far. Coming to the smaller projects which you mentioned, the first project of multi-purpose vessels is... Good project. Fast Interceptor Craft and the B-17 Bravo. The Fast Interceptor Craft 120, it will be split between two shipyards 80 and 40. And the second project, the T17, Bravo, again, would be split between two shipyards. I think that gives you a broad perspective of the orders in hand, including the break-up plan.

This is really helpful, and thank you for this insight. Wish me all the best.

Thank you. Thank you. Next question is from the line of Bhavya Gandhi from Bajaj Alternative Investment Management Limited. Please proceed.

Yes, my first question is regarding when can we see the revenue booking for NGC starting and in the intermittent period you were supposed to have smaller ships where you could contribute to the revenue. So if you can throw some light, how will the revenue numbers look like for the next two years?

Thank you. The revenue booking from NGC, if the contract is signed during the current quarter, we expect the booking to happen during the latter half of the next financial year, that is the FY28, the second half of FY28, we expect the revenue generation from...

And percentage-wise, if you can just elaborate, how much would be the percentage of booking? Two years, at least.

Are you asking about NGC?

NGC, yeah, NGC is particular.

You are aware, I mean, since we have been interacting over multiple investors, unless made, that shipbuilding follow the... The creative activities of construction are in progress. Then it picks up as the physical construction starts. Currently, we have, as I mentioned, we have about 39 platforms. Thank you. And in line with what you have been seeing. That is FY 2018. Thank you.

Sir, can we reasonably assume that FY28 will not see dip in terms of revenue, because that's the fair understanding?

No, I did not state that. All I'm telling is that by revenue, by FY20, when the current financial year, a couple of more projects would get completed, and the remaining projects would give us revenue during the next year, FY28.

Okay. And, sir, during these two years, how should one look at, because you've been guiding for high-digit EBITDA margin, while NGC will be in the design phase. So, there will be some sort of de-operating leverage also, because your fixed cost will continue to remain elevated. So, if you can guide for at least 28-29, how the EBITDA margins will look like beyond 27.

In case of 28 and 29, we will try and maintain similar margins. I can only say we will try and maintain similar margins because at that point of time, the balance projects which are currently in hand, I am talking about the OPV project or the commercial research vessel projects, they would be getting completed. We'll try and maintain similar margins during that year also. And also, one second, also in FY28 and FY29, the NGCB would start giving us revenue, perhaps maybe to the tune of around... And the next year, when the construction starts again, the project will start giving revenue. NGC in the next financial year, second half. From the balance of the projects which are on the angle, let us take the P-17 Bravo, where there are only assets now, again, like the NGC, there are only four shipyards. And with our kind of experience and expertise in building these vessels, we stand a very good chance of winning. And it's a very big order. So even if we go by a conservative, you know, they are actually becoming L2, forget L1, even if we become L2. Thank you. Bye-bye, 29. This is not a concern, not a great concern. This is my appreciation.

And take stockbroking. Please go ahead.

Hey, but, uh... Major platform that you are building.

Could you repeat the question, please? Somehow your voice was sounding a bit distorted. Could you please repeat the question?

Yeah, sir, what I was saying was that we did 8.3% EBITDA margin in F525. Right. We did 8.3% EBITDA margin in FY25, and then 11.3% EBITDA margin in FY25, and then 11.3% EBITDA margin in FY25. The same margins then should be just for the benefit that we received from the right back that we took in the fourth quarter of EFFER25 and EFFER26. Is that the right way to look at how the margins will pan out for the next people?

See, all I can say, frankly, the question was not clear purely, not because of the thing, but I couldn't decipher properly. The voice is a bit distorted, but what I understand is you are asking about the EBITDA margin trend, what would continue in the current financial year. I can assure you that the current financial year, the margins are going to be similar. That's what I understand you ask, because it's not clear.

I was asking that, you see, just for the benefit that we took on account of the provision right back in the fourth quarter of FI 25 and FI 26, sustainable margins are around maybe 9.5 to 10%. So that is the way margins should work out for the future, or we should go by the current level of around 11.5% margin that we did in FI 26?

We will be able to maintain similar margins, what you said last. We will be able to maintain similar margins in the coming year, that is the current year.

That is 11 and a half percent.

I really can't say the exact, but all I can say at this stage, we are only in the first quarter. All I can say is that we will be able to maintain similar margins.

This is from the line of Raj Shah from Inam. Please go ahead. Yes, please go ahead with your question.

So my first question is regarding the possibility of revenues in F-28 from the aftermarket space, basically the spares for the platform that we have delivered in the last 2-3 years, say survey vessels in the earlier frigates that we have delivered, do you see that spare revenue start throwing up? A way to increase margins.

You're mentioning that ships delivered during the last two years.

Will the spare sales for those ships start reflecting in our numbers in the next 2-3 years, which could be a reason for the margin?

This way, this, uh, One, of course, is the P7-Alpha project. We have delivered two of the ships, and we have delivered four of them in the last year. I'm sure of the anti-submination watercraft projects. All of these projects are high-value projects, and all the orders for this... They have not been affected by any of the market fluctuations. So, I think that is, I am not sure that that is the question which you asked, because the question was not clear, but we have been able to maintain good margins from this issue.

Sir, regarding this export market, do you see any new orders? Yes, definitely, yes.

Definitely, yes, because most of the European... So that is one reason. And the second reason is that they found that the Indian pricing is affordable for them and competitive for them and so is the quality of the business. So a few of the European clients are in dialogue with us and we are very confident that in the next year or so we should be able to conclude more contracts for commercial services, especially from the European market. So we see opportunity in this event.

Okay, you got it, you got it. That's it. Thank you.

Thank you. Next question is from the line of Kavish Parekh from 361 Capital. Please go ahead.

Hi, sir. Thanks for the opportunity. While you did highlight that the order for NUC could be signed sometime in this quarter, could you also share more details on the likely vendor ecosystem for the project, including the potential key suppliers and their respective work shares?

See, yes, we are expecting the order for the contract for the NGC to be signed in the current quarter. And for the next project, that is the 120 FAC, 31 voltage FAC and the 17 Bravo project, we expect the RFPs to come out in the next three months. We are currently live. The NPV, the bid submission has already taken place, and for the OPV, for the Coast Guard and the Interceptor Board, I appreciate the bid submission is towards the end of this month or early next month. If we take for the smaller projects, from the time the bid is open, the contract would get signed within six months. And for the large project like C7 Bravo, he's not experienced with...

What I understand is specific to the NGC program, who would be the key vendors for you for the project, and it would also be helpful if you could share the electronics content within the overall program, so what proportion of the program value could be attributable to electronics, and which major systems would this include, given part of the program. I think I got slightly understood. Understood.

You are specifically asking about the NTC project with respect to our downstream vendors. Okay. In the NTC project, about 65% of the overall project cost is for the equipment and systems. 55 to 60 percent is accounted by the electronics, that is the weapons, sensors, and associated electronics. and the associated machinery systems, and also the steel. Our sister, BFU, the Barat Electronics. There are a few other Indian OEMs who are in the same. Does it answer your question, or do you want more information? We have already started discussions with several of the OEMs as part of the preparation for the project, and once the contract is signed, we will be placing the downstream orders. So we expect the first of the downstream orders to be placed. Within three months of signing of the contract, and between three to six, you see, here the customer is also involved, because since it is a big project, dependency project, the customer is also associated when the technical specifications are finally. So, the majority of the orders will be placed between three to six months of signing of.

This is super helpful, sir. So, given that, like you said, DEL will also have a role in this program. Fair to assume that once you are able to sign the contract with the customer, the contract with DEL will be signed somewhere around 3 to 5 months, 3 to 6 months odd after your contract signing with the customer. Is that a fair assumption?

Absolutely correct.

Perfect. Thank you so much, sir, and all the very best. Thank you.

Thank you. Next question is from the line of Harsh Mulchandani from Toro Wealth Managers LLP. Please go ahead.

Thank you for the opportunity. So, we've discussed that, you know, right now we are seeing good momentum, even we have inquiries from the European companies because of our pricing advantage. Do we have enough capacities to take large orders from them? And is there a possibility to aim for even higher margins than what we have seen in the current year, which is obviously very good, but because we are globally competitive and we have good quality also, can we position ourselves as a higher margin player also going forward?

So, when we follow this current order with more... Ships are very small ships. In the beginning of this discussion, about 150,000-odd crores of RFPs which are on the end Look for profitability aspirations of the company. Building projects which are on the anvil. What we'll be looking for is something that's definitely with good margins and projects which are attracting, like, let us say, hybrid platforms of large-sized Yes, we'll be going into a commercial building project. You can see a few of them coming up in the next. Good margins, especially when we are concerned.

Got it. Thanks. And just one more question I had to understand now with the commodities, prices increasing, etc. So, I'm assuming we would have an arrangement with the clients for cost pass-through. But I just wanted to get a sense that is there any delays in general that we see with respect to these cost pass-ons or it is these negotiations happen simultaneously on a monthly basis? How does it work on ground?

Thank you. Yes, there is a deviation or the escalation with respect to the cost of commodities. There has been an impact. And so has there been... We have factored this and the orders were placed much earlier, so there's no cost. for the ongoing projects. The time delays are marginal because what we have seen is that Yes, there is a marginal, very, very marginal, insignificant impact which we are able to absorb in the overall scheme of things. For all the new contracts which we have yet to sign or where we are bidding, we will factor this aspect of uncertainty also. In the existing contracts, just to say all the contracts are fixed-place contracts, and so are our orders with our subcontractors or vendors. There is no impact at all. Got it. Okay.

Thank you. Next question is from the line of Raheel Dasani from MAPL. Please go ahead.

Yeah, hi, I'm Audubon.

Yes, you are Audubon. Please go ahead.

Yeah, good afternoon, and thank you for this opportunity. I have a specific question regarding the ASW vessels. Are we still left with some equipment, fitment on our vessels, the ones that we have commercialized, especially as I believe without complete fitment post-delivery? We will soon get the PBGS amount back, which I believe is some 10%. And from what I know, we were left with a sonar installment.

Can you repeat, please? I didn't get the question. Which project?

ASW vessels, the anti-submarine warfare vessels. The few that we have commercialized and that are in the water as of date. I believe that without fitment of all the equipment on it, usually the government doesn't give us the PBGS amount, which is usually 10% of the whole tender, if I'm not wrong. And from what I know, we were left with the installment of the sonars on that. on those vessels.

Since you asked a specific question, I will try and give a very clear answer. Yes. And the variable... I'm trying to say that there is no financial impact with respect to the bank guarantees or...

Got it. That's very clear. And from what I understand, it's in the development phase maybe, and we haven't installed it yet. And hence, but there is still no financial liability or anything of the sort. Right? Absolutely. Got it. And with the upcoming NGC and the NGOPV, do they also have a similar sonar profile to the ASW, both surface as well as underwater sonar?

This is confidential information. You are asking me the weapon fit of a native platform. You may like to approach I&R.

Got it. But maybe if you can share at what stage of development is this sonar that we have to still work on, or do we see that getting further delay?

At this particular question, I would suggest you get it. Got it. Got it. Thank you.

Thank you. Next question is from the line of Sunil Shah from Shreep EMS. Please go ahead.

Yeah, sir, thanks for the opportunity. Sir, I missed a few points early on, and what I understand is that the P17 Bravo is broken up between 4 and 7. There are other two big ticket size orders which you mentioned, the 32,000 crores and the 35,000 crores. I believe those order announcements could be scheduled in FY28. Sir, the order and the breakup, could you kindly just repeat it for me, please?

Thank you, Mr. Shah. The P-17 Bravo, the total number of ships... According by the defense acquisition. Thank you. The second part, you may have to ask again. The first part, we expect the RFP for P17 Bravo to come out in the correct quarter, and the RFP for the other two projects could come by end of the financial year. So if the RFP for the P17 Bravo comes by first year, And the other two projects in the next financial year.

Sir, about your tenure in the organization, sir, more than the orders, so you are there in this financial year as well as the next financial year or the pattern would be for someone else? That's my question. I actually didn't get it. Sir, your report in your, your host in the organization, sir, you will be associated with Garden Beach even in FY27 and in FY28 as well? Yes, definitely. Thanks. Thank you so much, sir. Thanks for all this. Thank you.

Thank you. Ladies and gentlemen, we will take this as the last question for the day. I now hand the conference over to the management for the closing comments.

And thank you, Concep, for arranging this conference. It was an interesting session, and we had a few interesting queries during the session, and as usual, I look forward to the investors and analysts' meet, and looking forward to interacting with you all after we announce the results for the next... FY27.

On behalf of Garden Reach Shipbuilders and Engineers Limited, that concludes this conference. Thank you all for joining us and you will now disconnect your lines.