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Earnings call · FY2026 Q4
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Ladies and gentlemen, good day, and welcome to the CMAC Limited Q4 FY26 Learning Conference Call. As a reminder, all participant lines will be the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Bala Subramaniam from Aryan Capital. Thank you and over to you, sir.
Thank you, Julius. Good evening, everyone. On behalf of Arigant Capital, I welcome you to the earnings of CMAQ Limited Q4 F526 concourse. From the management side today, we have Mr. Nabeen Mokta, whole-time director, Mr. Sinaikumar Agarwal, CFO, and Mr. Sunil Gupta, VP Strategy and Investor Relations. We welcome the management of CMAQ on this course. Now, I invite Mr. Naveen Mokkasar to give his coaching remarks, following which he will open the closer Q&A. Go to you, sir.
Thank you, Vala. Good afternoon, ladies and gentlemen. On behalf of C-MET, I extend a warm welcome to all the participants joining us today for our Q4 and FY26 running call. Thank you for taking the time to be with us. FY26 has been a defining year, not just only for CIMEC but for the broader offshore energy sector. We are operating at the intersection of powerful global forces which are reshaping energy security priorities worldwide. And CIMEC is extraordinarily well positioned to benefit. The ongoing conflict in West Asia has fundamentally altered how nations think about energy security. Three routes which were once taken for granted are now contested. Prompting a structural long-term acceleration in domestic exploration and production activities. Simultaneously, strategic global oil reserves are being depleted faster than they are being replenished, making offshore exploration no longer a discretionary investment but a strategic necessity. India illustrates this trend compellingly. The government has reduced royalty burden on oil and gas producers. GFM plans to estimate refining capacity beyond 300 mm dPa. and continue advancing offshore exploration through its open acreage licensing policy. In a landmark development, ONGC appointed British Petroleum as technical services provider for the Mumbai airfield, a cleaner signal of India's intent to enhance recovery from its most strategic offshore basin. India's growing crude import dependency not only creates strategic vulnerability, but also exposes the economy to global price stocks and rupee depreciation pressure. Making domestic energy expansion economically critical. The key beneficiaries are companies with fleet strength, offshore execution capabilities, and established client relationships, companies like CNET. I am proud to report CNET's highest annual revenue and profitability in financial year 26, which is achieved through strong operational execution, higher fleet deployment, Include vessel utilization and discipline project delivery across domestic and international markets. The key highlights include successful completion of the ranking revamping of ONGC Neelam 9 platform, using MV Goodman, demonstrating our end-to-end offshore execution capabilities. Integration and firmament of operation of C-MEC Agassia, meaningfully strengthening our field. Two significant O&M contracts in consortium with Supreme Hydro Private Limited, a notification of award for MSP Sambutiprava and Sambutiprava. Both covering 2026 till 2028, substantially strengthening long-term revenue visibility. We also maintain a good balance in Saudi Arabia for almost 10 years now. I am happy to mention that client and end-client are quite happy with our product delivery. Needless to mention that such hefty clients are precursor to not only more closer cooperation with such clients, but also provide the springboard for expanding the operation with newer clients. The offshore sector is entering a period of sustained investment expansion in sub-infrastructure, brownfield upgrades, deepwater exploration, and product enhancement. The global energy transition is accelerating near-term investment in domestic production as nation-sixth affordable energy during the transition period. We enter 2827 with strong water visibility, an operationally primed fleet, and a team that has proven it can deliver through cycles. The opportunity landscape ahead is as favourable as it has ever been, and we are ready to make the most of it. Just one caution looking at the geopolitical scenario. One of our vessels, C-Mac Palladin, sailed off to Dubai for completing its drive-off. However, due to the ongoing war in West Asia, it continues to remain stranded in the yard until state of harmony is opened for navigation for all, without any risk. Do you want streamer to input exposure to virtual sources? Prolonged instability over a broader region's conflict could affect contractual agglomeration timeline, asset deployment, operating costs, and overall business viability. While elevated energy prices may support long-term offshore activity, near-term disruption and heightened geopolitical is one who's monitoring. With that, I would like to thank everyone again for joining us today. I will now hand over the call to Mr. Vinay Agarwal, our CFO, who will take you through a detailed overview of our financial performance for the Q4. Over to you, Vinay.
Thank you, Rabindji. Good afternoon, everyone. I warmly welcome all participants to our Q4 and full year FY26 earning call. I will take you through the key highlights of our standalone and consolidated financial performance for the fourth quarter and the financial year ended FY26. Financial performance Q4 FY26. On a comparative basis, the venue for the quarter stood at Rs. 330 crore, compared to Rs. 209 crore in quarter school FY25, reflecting a year-on-year increase of 58%. At the standard alone level, the venue stood at Rs. 315 crore as announced. The price is Rs. 271 crore in the corresponding quarter of the previous year, showing a year-on-year growth of 53%. Svita at the consolidated level stood Rs. 152 crore in Q4 FY 26 compared to Rs. 91 crore in Q4 FY 26. A file. On a standard basis, which I should add to his. 138 crore vs. Rs. 105 crore in Q4 for FY25. Strong vessel deployment improved fleet utilization and efficient execution across projects contributed to the healthy operational performance during the quarter. Profit after tax on a consolidated basis stood at Rs. 103 crore. Compared to Rs.41 in the same quarter last year as the standalone living, best stood at Rs.57 versus Rs.58.8 in Q4 FY25. Financial performance for the year ended March 26. For the full year Fy26 consolidated revenue stood at Rs. 1000 crores compared to Rs. 682 crores in last year, reflecting a year-of-year growth of 47%. At the standalone level, revenue for Fy26 stood at Rs. 947.5 crores as against Rs. 660 crores in Fy25. Consolidated EBITDA for FY26 stood as to be 447 crore, compared to Rs. 244 crore in FY25. On a standard-on-basic EBITDA stood as to be 407 crore, because it would be 264 crore in FY25. Cash for F126 at the consolidated level is too rare to be. At the standalone level, cash stood at Rs 242.4 compared to Rs 117.6 in the previous initial year. ROCE and ROEE stood at Rs 18% and 19% respectively at the calculated level. With continued support from our stakeholders, we remain confident about sustaining our growth momentum and strengthening our operational performance in coming years. With that, I would now like to open the floor for questions and answers. Thank you.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove 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. The first question is from the line of Raheel Tasani, from NAPL. Please go ahead.
Yeah, I'm audible.
Yes, sir, you are.
Yeah, it's Ahil Dasani. First of all, sir, good afternoon and thank you for this opportunity, and congratulations on a great set of numbers. My list of questions is around that offshore shipping segment particularly. To start with, if you can maybe share more about the charter rate cycle we are currently in, the understanding that I am getting is that there is a demand supply gap. The shipbuilding is slow and also the age of vessels in use is very high and the charter rates have increased a lot. So maybe if you can share more on this and where are we in Let me give you a background.
We are operating diving support vessels, which are mainly on the long-term contracts. And during the tenancy of the contract, which is 3 to 5 years, the rate remains firm. Okay? Then there are a few contracts, which are spot contracts, where the rate fluctuates depending on the demand supply. While we acknowledge the fact that yes, the market conditions are buoyant, but last part of the business is protected or blocked because they are working on a long-term contract. We believe that going forward, as you rightly said, the availability of vessels will remain a constraint and therefore the market should remain buoyant.
Okay. Maybe if you can share a bit more specific, post-2022, we saw the charter rates doubling year-on-year. Is that sort of growth still continuing or has it slowed down or have we started seeing some sort of rate tapering of validation?
No, I read Naveen here. So, the market definitely has been quite buoyant, as you can see, as is also evident from the numbers, but it is not that much buoyant, and I wish, whatever you are saying, that rates have doubled, I wish it would have happened, that you would have been given some more terrific set of numbers for that. I guess market is one and we are seeing that okay maybe for another couple of years we will definitely continue to see this buoyancy in the market where rate will continue to increase. May not be as to what we call that it will increase at the Hindu rate of growth.
Hmm.
Got it.
And if I were to ask another specific question, what would be the latest daily charter rate of our Vectory Diamond if we were to leave it today?
So, Diamond is a vessel which is a supply vessel, which is a typical offshore supply vessel, and it is on charter with ONGC, so that contract is getting us somewhere around $8,100 or $200 a day, and going forward when this contract comes up for renewal, we are looking at an increase of maybe around 10 to 15 percent, maybe possible at that point of time, depending upon demand and supply.
You got it clear. And just to understand the demand perspective better, ONGC, Reliance, etc. have a lot of incoming projects. If I were to go specific 10 development wells by ONGC, the PRP 9 project, also the Reliance KGD 6 block, plus also the general offshore wind and port construction demand. So, what sort of offshore vessel demand are we seeing across CSV, MSV, OSV, DSV? If you can quantify numbers, I know it would be very difficult, but approximate if you can give me in the next 2-3 years, what sort of vessel quantum demand we are seeing, except 20 vessels, 15 vessels.
So, see, we are into the niche segment of diving support vessel. We are mostly into offshore vessels. Of course, we have this cement diamond, which is offshore support vessel. But this you can consider as an aberration only. So, we have got this one offshore supply vessel. But we are into this diving support vessel, which is the predominant business. And there is a demand for these vessels, as you mentioned rightly that PRP 9 projects are there and some more projects are there, but the demand is quite a balanced kind of demand, so there is just shortage of maybe one vessel here and there over a season of time, because these vessels are not required in that kind of number like supply vessels. So, it is almost a very good equilibrium kind of thing that, okay, whatever the vessels are available, and demand is almost all like that only. So, if there is any, some kind of shortage is there, then only vessels are required from outside. So, it is fairly balanced right now.
Got it. But again, sorry if I'm going too specific, but I'm just trying to understand this whole industry and also how should we benefit as CMAC as a company. If I were to pick up ONGC, for example, in your presentation, you shared that they have done nine new discoveries in 2025. So, if I were to understand, would our discovery be requiring going to two vessels, or can it be much more than that? I'm just trying to call the number.
So, I'll tell you, let's understand the business. We are neither in the process of identifying the oil wells, neither exploring. Okay. Our job comes the last. Once the discoveries are done, the wells have been established, the exploration has started, then we come as a partner for IMR, which is Inspection Magnet. And then the state is the last. Today, depending on how the discoveries are made, what is the infrastructure that is laid for exploration, that will decide what is the quantum of vessels that we operate will be required.
Okay, got it. And are we seeing increased competition and vendors for these vessels now or still the betters are few and famous before?
Competition as usual is there. You can't get the work on monopoly basis. So, competition will always be there, because whoever wants the services, they will like to have a...
Are we seeing new competitors trying to come and buy new vessels? Are we seeing new competitors?
There are no new competitors. As I told you earlier also, that it is fairly balanced just now. The demand and supply are being matched quite fairly. So, there are no new competitors.
Okay.
Sorry for interrupting, Mr. Sahil. Please return the queue for more questions. A reminder to all participants, please restrict yourself to two questions. A reminder to all participants, that you may press star and want to ask question. The next question is from the line of Rohan Mehta, an individual investor. Please go ahead. Hello. Good afternoon. Thank you for the opportunity. Sir, I just wanted to ask about the vessel utilization levels in terms of how these have been this year and what can be expected for the next year, FY27, vessel utilization.
I think the vessel utilization at that is almost 100% dependent, barring of hires which happened due to dry docks and unscheduled breakdowns. Okay, and depending on the seasonal availability of the contract. You would have seen the announcements, we have added new business, which will definitely improve the top line by around 15% in the going forward period.
Okay, not as well. And sir, are there any partnerships or JVs or anything like that on the horizon in terms of our maybe even offshore engineering opportunities?
Rohan, right now we would not like to speculate anything. In case something happens, definitely we'll make an announcement towards that.
Thank you very much. And sir, if you could give some light on and your opinion on the overall global energy security concerns with the geopolitical tensions and everything, how that's affecting our business and what we expect over the next couple of quarters.
While the entire geopolitical situation has made it clear that with 15 percent in-house production, India cannot survive and hence India has to be more self-reliant in energy sector as well, which will definitely create a lot of business opportunities for EMAC and companies which are prevalent in energy sector. How things will shape up? Probably after this whole episode settles down, things will be more clear.
I got it. Understood, sir. If you're lucky, are you seeing any pricing pressure or pressure from competition when we are bidding for offshore contracts?
No, not right now.
Okay, okay. Any guidance that you might like to give for the next year in terms of top-line or margin?
Well, I already said that we are expecting about 15% growth in top-line and bottom-line next year.
Okay, okay.
Great. Thank you. Thanks for taking my questions and all the best.
Thank you. The next question is from the line of Abdul Rapeh from Real Cactresses. Please go ahead. Thank you for the opportunity.
First, I would like to congratulate the team on strong yearly performance. So, I have few questions. The first one being regarding the two O&M contracts awarded from ONGC. It is in consortium with Supreme Hydro. So, my questions have both the contracts come into operations and also food management clarify the revenue profit sharing with Supreme Hydro.
So, if you are monitoring the announcement on the stock exchange that we are making, so, Samudri framework has already been taken over and it has started working, and same with Samudri Prabha also, which has been taken over in May, and for operational reason, it is just now in Mumbai getting all this changeover done, and most likely by first week of June or something, she will go and do the contract work, And we'll call the neighbor in it. And that's it. You got it.
Could you tell me about the profit sharing, sir?
So the share of this Supreme is around 10% into the commercial.
What scope of services are being provided by Supreme and Hydro?
They are providing us the technical know-how along with their manuals and some partners. All right.
So, my next question is, for FY27, investors like CMX Quadfish and CMX Azastia are expected to contribute for the full year versus partial deployment that was last year, while CMX R&D is also likely to come as operations soon. And along with the two ONGC O&M contracts that we just talked about, would it be fair to expect an incremental revenue contribution of roughly 500 crores? And if so, then the revenue guidance for the next year of just 15% is, in my opinion, it would be, we would be doing much more than that. Is my Azunthic correct?
Sir, your assumption is not right and I would not like to comment further beyond 15%. See, there are a lot of business decisions, timings, like you would know that CMAC Paladin is still in Dubai not operating. Okay, CMAC 2 is operating only till August 2026. So, I have given a guidance and I think the rest working you can do yourself.
All right, sir. So, my final question would be, are we currently in discussion for additional ONN contracts with ONGC or major other companies?
See, as in when we get new contracts, you will be the first person on stock exchange to be known. All right, sir. So, one last question.
When can we expect the deployment of finance?
See, there are two-three things that are creating a hindrance because our Paladin is right now not in operations, not doing the business. If the Anand movement happens, again, it will also go out of field for some time, which ONGC will not permit. There are some more complications. So, we see one more quarter, maybe, by the time Anand will come to our fleet.
All right, thank you.
Thank you.
Thank you. The next question is from the line of Nishita Sanklesha, from Sapphire Capital. Please go ahead.
Yes, hello. I just had one question. Inevitably, do we plan to procure any more vessels?
Yeah, see, there are some information already, which is known to everyone, that Sinek Anand, we have already told that we will be acquiring, so that is already a known fact to everybody. Apart from that, we continue to look for suitable unit as and when we find something which is going to add value to the stakeholders, so definitely we will be going for that decision. But right now, nothing is specific or specified in the pipeline.
Okay, and the funding of that will be done from internal at work only?
Again, that is, you know, depending upon the transaction, and whatever is best for the stakeholder, that will be done.
And what is the total amount that we have done in FY26 and the amount that we plan to do in FY27?
So we have done about 300 crore capex in FY26. In FY27, as Naveenji just mentioned, the amount is roughly about $70 million, which is the scheduled deficit.
Thank you. A reminder to all participants that you may press star and want to ask questions. The next question is from the line of pages and Andrew Gillen-Visker. Please go ahead.
Thank you for the opportunity and congratulations for the Gussarab numbers for you and our team, sir. Sir, just to take from the previous participants, you said that our share is 90%. Is that the correct understanding? Did I hear it correctly?
Yeah, so, what we have mentioned is already that 10% of the construction share is there, but then there will be subcontracting costs and other costs and all those things will be there. But, yes, technically what you heard is correct.
Okay. And, sir, how is this payment? Is it like Milestone based or really get billing quarterly because the value 348 and 274 are? And it's more than two years, roughly two years contract. So, how do you get the payment for these?
Payment is same like our other vessels. So, it is on monthly basis. So, we bill to UNGT at the end of the month, and as for the agreed payment time, they make the payment to us.
Okay. So, it is divided equally, if I understand correctly, per month, roughly. Yeah.
Correct.
Sir, you mentioned that obviously Paladin is still stuck in Dubai. What about Princess? Because I believe Princess was acquired from 21st April. So that is still remains unhired. Is that understanding correct?
No, no, no. Princess was acquired for the specific segment of work which we have contacted in between. But the broader contact with L&T is continuing and the vessel is still working.
So, that continues at the previous sold rate. That's not the rate of prices.
Yeah, yeah.
Ankur, can you confirm CMX diamonds rate that we have offered, the current rate that you are offering diamonds at?
There has been no change from the declaration which was made at the time of commencement of the contract. So, there is no change of that.
So, to be very specific, this is 875. 875.
Sorry, sir. I'm not able to hear you. Can you come back again?
8,700,000 a day.
Okay. Okay.
Okay, sir. Thank you so much.
Thank you.
Thank you. The next question is on the line of Mahesh Kumar from MGA Investment. Please go ahead.
Hello. So I'm audible. Thank you for the opportunity, sir.
Thank you.
So, I had three questions. First on e-revenue and EBITDA. We had a very good, strong revenue in April 26, around 652 crores, 2000 crores, and EBITDA margin have also improved nearly 45%. As an investor, should we see this?
See, while we gave a guidance that we should be doing about 15% growth in the value, the margin should be in the range of 40 to 42%.
Okay, okay. And recently, like, we acquired CMAIC, Agastya, and also looking for acquisition of CMAIC, and how much additional revenue potential can these vessels generate, and what utilization level are you targeting, you know, over the next two CAs?
See, both the vessels are already on charter with OMDC, so deployment will not be issued. Depending on when CMAC Anand comes to CMAC fold, we'll clarify the potential of revenue, and Agastya is doing full revenue next year, that is for sure. Okay, okay, okay.
And lastly, sir, what percentage of revenue currently comes from, you know, international markets, and how do you plan to diversify the client base further in regions like Middle East?
About 10 to 15% is the revenue that comes from international market, and definitely depending on the vessel availability, we would like to tap that market.
Okay, sir. That's it from my side. Thank you so much.
Thank you, sir.
Thank you. The next question is from the line of Rishi Kothari from Capital Bridge Advisor. Please go ahead.
Thank you so much for the opportunity. It's just wanted to know in terms of the growth that you are expecting for next year, what sort of risk that could hinder our growth? What could potentially get that management fee in terms of business for us? Because of course, the industry that we are doing is pretty much volatile in nature, right? So what is this factor we have considered for the business?
See, there is a war that's going on for last three years. There is a new escalation that has happened recently. We don't know what will happen. One of the vessel is stuck in Dubai, depending on how this situation percolates. This can be a risk. There is another vessel which is right now running profitability in Saudi Aramco. If situation aggravates, that can be a risk. Other than that, we generally do not see any major risk. Or there can be a risk of rupee spending.
Okay, thank you. In terms of business understanding, I just want to confirm that post any sort of oil in gas companies have actually discovered the oil in the oil field, correct? Post that, whatever sort of extraction process comes into this, that's where the business is coming, correct, for them?
Yeah, correct.
So, that's where our business is, where we post-discovery and everything, that's for extract and, you know, all maintenance and everything, that's where we have the business, that's where they hire us as a ship and the operator.
Sorry, your voice is not coming clear, so I'm not able to understand the queries.
Podible properly now?
Yeah, now it is much better.
Yeah, we just want to understand that when an oil in gas company actually explodes the oil in the oil field, suppose that when it's extraction and dinkiness of that oil field, that's where our vessels come into picture as a business for them.
Correct, correct.
Okay, and we don't see any sort of risk related to business for this at all, if at all, I look at it as a competitive landscape. Are there any other companies involved in the same business?
No, we do not look at any kind of risk right now. And apart from, you see, we are one of the largest ship owners of these diving support vessels. And as far as others are concerned, they are like one vessel owner or two vessel owner kind of companies are there. So we are the biggest fleet of these BATs.
Okay, and that's it. So we don't see any sort of competitive or competition process from anyone in the industry. Any sort of rent players or MNC players we look at or is it just purely no competition at all for the business geography that we work in?
No, no, it never happened that we will not have any kind of competition. Competition will be there, but since we have our largest fleet of vessels, we have got our own strength, and that's why there are clients which have been working with us for quite a long period of time. So certain edges are there based on which we are able to get the business. And foreign vessel owners, again, because it is our own turf and there are certain protections. Provided by the government as well as entry wages. So, they are not that much keen on coming into India.
Okay, understood. And that's why we think that it's one of the competitive advantages of coming to India.
Of course, this is one of the distinct, but besides that, all the work is obtained on the competitive basis only. Unless we are providing a competitive package, nobody is going to take that package.
And with the rate of the package that the rental per day, whatever things is charged to the client, it is decided based on market conditions, is it a price maker or price taker for our price?
No, it is neither the price maker or something like it, it is the discovered price. Our client who has got the job, they bid on the basis of some different kind of thing, and then if the cost that is viable to them, then they definitely take a work with us. And as far as ONGC is concerned, the category is basic or benchmarked against the international category.
So, there are two different pricing mechanisms for a client to charge in a way.
Yeah, so, when we say the charter has kind of rates at ONGC or other vessel owners, so, it is that benchmarking internationally, and when we are taking the spot market, that ACC kind of job, so, the price of the entire package, which they benchmarked against their own internal definition.
Okay, and this is the...
Next question is from the Line of Stages, an individual investor.
Thank you for the opportunity, Alin Sir. So, regarding our UK investment, so we had, I think, I recall last year we had done this to ensure to get more business from Europe.
Hello. Yeah, yeah, we are listening.
Yeah. So, we were trying to get more business from Europe, and because we believe in Norway and HSA had better rates. But we see an impairment charge in this subsidy right now. So have we abandoned that or what is the progress in the UK subsidy? Where are we in that? Can you just show us some light on that?
See, we have not abandoned anything. The only thing is because of the current geopolitical situation, on a prudence basis, we have just taken that impairment. Otherwise, there is no potential impact.
This is just our accounting adjustment. Nothing.
So, what's the progress in that, sir? Are we close to getting any contracts? Are we pitching anything? Do we see any progress? If you can share some... Can you put your insights on that?
See, right now, we would like to refrain from it. As soon as we get some contracts, we will definitely announce, but the endeavor of the management and the company is that CMAX should be a growth-oriented company and contribute to the nation's growth. We have done it in 2026. We are confident for 27-28, and we will do every best effort which is in the interest of the company and its stakeholders.
Okay. And, sir, then usually when we have these... The vessel is being deployed, and you know, for some reason, when there is, when there is, it's off fire for 10 days, 20 days. So, technical issues. So, in that case, does that 10-12 days amount get disrupted from our value, or do you have to separately compensate to own this issue? How does it work? On a broad level.
When the vessel is on off fire, company is not being paid for those off fire days.
Okay. Okay. Thank you, sir. Thank you, sir. Thank you. A reminder to all participants that you may press star and want to ask question. The next question is from the line of India. An individual investor, please go ahead.
Thank you for the opportunity. Sir, could you please tell some details about the MSD Samudra Suga contract and MSD Samudra Prabha contract, like what kind of revenue potential and margins can be expected?
See, we have already announced these contracts and the revenue potential of both the contract and the tenure of the contract is already declared on the stock exchange. I think that filing you can download or reach out to our IR agency, they will provide you.
And both the contracts are up to 34th of March, which is 28th.
To the second question, for FY27, vessels are scheduled for dry dock during the month. Season, can you say the roadmap for dry dock and the extension?
Oh, three of our own vessels are due for dry docking, and two of these vessels which we have taken from ONGC, that are random contact which we have taken, so they will also be going for the dry docking during the year.
Thank you. Thank you. The next question is from the line of Amish Kanani from Novice Investment Manager. Please call it. Sorry to interrupt Mr. Amish, could you please come more closer to your answer? Yeah. Sorry Mr. Amish, your voice is breaking.
Thank you. Hello? Yeah, how are you doing? Yeah, sir, congrats on a very good set of numbers. Sir, if I remember in Q3, you said, you know, Q3 margins were, you know, relatively high and peak. You were kind of questioning us for not assuming such kind of high margins, but, you know, Q4 has been margin at a much higher level. The question is, and there was some one-off in Q3, if I remember correctly, either on expense or revenue line item, and say, you know, our Q4 numbers are very good. So, the first question, sir, is there any, again, one-off in Q4 which we need to, you know, kind of be aware of, and hence, you know, you are guiding a lower level of margins for the Q4.
No, no, we are not guiding any lower level margins. Please understand, when we questioned you in Q3, that has actually happened. CMS Paladin has not operated for Q4, and even Q1, we are not seeing the operations till date. Okay. So, depending on the dried-up schedule and depending on the mix of the contract, the margin profile may vary between 2-3 percent. But what we are saying, we are still maintaining a stable margin of 43-42 percent. That is the difference. We are not reducing our margin margin. Secondly, there is no one-off in Q4. However, Since we have raised this, Paladin is still there. So, for April, May, we are not seeing the revenue from there. Depending on the geopolitical situation, we will be clear for you.
Okay, sir, so one quick question and explanation in the QMC. In the third and the fourth quarter, numbers were pretty high and Q2 is usually off, right? So what my question was two parts. One, there is, and also there is a benefit of, sir, rupee depreciation that, you know, you would have caught. Correct. So, in that context, sir, one, you know, annual margins, you know, will be lower than the Q3 and Q4 margin that we have posted. So, that is what I was referring to in annual margin, which is lower than the average of Q3 and Q4.
No, no. That's what I was referring to. We really don't talk about quarterly margins because there can be quarterly aberration. And with this, is what I'm saying, because see, this is a big function, while absolute EBITDA will always grow, but depending on the EPC business growth or IMR business growth, so we generally guide that the margin profile is in the range of 40-42%. A 1 or 2% higher, depending on the utilization, is always welcome.
Okay. And, sir, two quick, two clarification. One and two were old, you know, vessel, and maybe we are assuming some higher dry dock or higher kind of a situation. And in that context, sir, my understanding, if you can clarify whether the O&M, you know, margins, the new, you know, two vessels that we have announced, which is only, you know, O&M margins, will that be at a higher margin or blended EBITDA margin for the year is what, you know, we should predict.
The blended EBITDA margin is more relevant because depending on higher, depending on seasonality, things can really change. So what our intention is that we should grow revenues, we should maintain margin or improve margin on an annualized basis. Which is still the case, and despite this war going on, we are saying that next year number should be increasing.
Okay, sir, well, Mark, verification here, CMAC 1 and 2. We assumed that it was not there. It is CMAC 2 and 3. 2 and 3. 2 and 3, sorry, 2 and 3, 2 and 3. So, have you assumed any aggressive, you know, off-pire and off-sensing, and maybe with this kind of condition, there is a surprise on the outside? Yes, yes.
CMR2, as one of my colleagues would have said, is right now contracted till August 2026. Sure. Okay. Post hours 26, it will go for a small dry dock, and then depending on the market conditions, we'll see whether we can deploy it on a spot market contract. CMASH 3, we believe that it did exceptionally well in queue, this FI26, and we believe and we are confident that the performance should continue for FI27 as well.
Okay, that explains quite a bit of thing. Thank you sir, sir, and all the wishes.
Thank you.
Thank you. The next question is from the line of Sahil Dasani from NAPL, Thiel Square.
Yeah, I am for the opportunity again. Please control your phone. Hello.
Yeah, please go ahead.
Yeah, just to confirm what you said last time, the rate of diamond whistle is right now at $8,000 to $10,000, and when it comes for renewal, it may increase 10% to 15%. But when I see similar OSVs currently in use in the sport market, they are going at 17 to 20 lakhs per day, which is more than double our rate. So why do you think there is this?
We will be happy to know which vessel of similar capabilities are getting this kind of rate, if you have any info.
Ocean, Diamond, and Emerald, these two vessels.
No, no, they are higher capacity vessels, and they are not being used as supply vessels. They are mostly, if I recollect, they are on the geotech work and those kind of wealth stimulation work they have been done. So that's why they are getting more, better number of rates. So, their capability-wise, size-wise, they are much bigger than the diamond. Okay, yeah, got it, got it, okay.
And similarly, you were just speaking about a supply to Aramco. We know you supply ONGC, so I would like to understand how easy or tough it is to get approved by vendors like ONGC, Reliance, Aramco, AgNoc, and get them to, and start supplying them with vessels, because I believe this is very critical both data vessels usually do.
Yeah, it is a very lengthy process and it is quite a difficult process. So, that's why these are the entry barriers, which companies enjoy, like for working for UNGC, now we are working for so many years now. So, we have got that advantage of pre-qualification. Similarly, now we are working with the Aramco. So, there also we have already created a track record of working for more than a year, almost like a year. So, these are once we have delivered this. Then only you will be able to bid directly to ONGC, like right now we will not be able to bid directly to RMCO, but our vessel is working, which is stating the track record. So this is how you get qualified for bidding directly.
But how long would it take according to you to get approved by such high-level vendors like OM, BCR, Amco?
It varies from vendor to vendor. Each vendor has got their own set of qualification requirements, which will be for the vessel also, which will be for the company also. So these are different, different kinds for each client. Got it. Okay.
And based on whatever I just from this call is that based on the shortage that we have seen in the offshore segment and which you have also been seeing and hence for the next two or three years, we will see a buoyancy
in which was a particular comment you said.
So are we looking to aggressively expand in this segment or do you think the current market situation is not a good plan to end to add more offshore vessels at the premium rates maybe?
No, no, we definitely are seeing growth in the market and shortage is there. But we are definitely not chasing the growth aggressively because these are all high effect items and not the small value. And once the growth tapers down, then it will become a drag on the balance sheet and we don't want to do that one. So we are happy to just expand the fleet and keep it deployed. That is much more advantageous source rather than having a large fleet and then which is hitting either.
Yeah, okay, got it. And, for example, one of the previous participants asked you regarding the upcoming O&D standard for which you said you were now on favorite time, but if I were to just go up with... A bit global because of all this world, we have seen a lot of oil and gas infra getting impacted in UAE, in Dubai, and more on the Middle East side. So are we seeing more inquiries flowing in and hence enhancing the shortage of these vessels even more or still no inquiries, no demand, no increased demand from that market yet?
See, there will be definitely demand which will be coming because right now the situation is, it is just not closed. Rather due to this ongoing issues, there are some calls which has taken place that even though damage has taken place, but nobody want to repair those damage or increase the requirement because nobody knows that how long this is going to continue. So till that time this issue settle down, you won't be seeing any kind of immediate kind of requirement. But yes, the requirement is going to go up from the north. Okay.
Got it. Yeah, that would be all for me, sir. Thank you very much for answering all my questions. Thank you. Thank you.
Thank you. The next question is from the line of Tejas. An individual investor, please go ahead.
So, thank you for taking my questions again. Regarding, can you just share what was the contribution from all subsidies in top-line and bottom-line for FI26?
See, there is no major contribution of our subsidiaries for FY26. Basically, we have pruned down the operations in Dubai. Okay, we have sold a vessel last year, and there is another vessel which we might be selling in the coming year. Idea is that we should strengthen and focus on our core business and grow that business from strength to strength.
So, sir, are you referring to either Pearl or Gallant to be sold off next year? So, those are two bulk carriers that we have.
So, one we are definitely looking at, depending on the market conditions, post this war scenario, let the market open, and then we will be able to guide it properly.
Okay, but we will retain one, so we will either pull out, and we will retain, and one will be sold out. That's the plan, at least. So currently, there is no revenue being generated from those. Is it fair to assume that in the current period of time?
We take this as the last question. I now hand the conference over to the management for the program.
I thank you all the investors who have joined in for this investor call and hope that all the queries have been reasonably replied to. Thank you. For anything else, you can definitely get back to our team for getting further information. Thank you.
Thank you. On behalf of Aryan Capital, that concludes this conference. Thank you for joining us. Human or Disconnect Reliance.
9:51 to 50:41 · One card per analyst, follow-ups included. Each plays from its start, and the one being answered is marked.
Yeah, I'm audible.
Speaker 13: We are operating diving support vessels, which are mainly on the long-term contracts. And during the tenancy of the contract, which is 3 to 5 years, the rate remains firm. Okay? Then there are a few contracts, which are spot contracts, where the rate…
Also speaking: Speaker 10
Okay, not as well. And sir, are there any partnerships or JVs or anything like that on the horizon in terms of our maybe even offshore engineering opportunities?
Speaker 13: Rohan, right now we would not like to speculate anything. In case something happens, definitely we'll make an announcement towards that.
First, I would like to congratulate the team on strong yearly performance. So, I have few questions. The first one being regarding the two O&M contracts awarded from ONGC. It is in consortium with Supreme Hydro. So, my questions have both the contracts come into operations and also food management clarify the revenue…
Speaker 10: So, if you are monitoring the announcement on the stock exchange that we are making, so, Samudri framework has already been taken over and it has started working, and same with Samudri Prabha also, which has been taken over in May, and for operational reason…
Also speaking: Speaker 13
Yes, hello. I just had one question. Inevitably, do we plan to procure any more vessels?
Speaker 10: Yeah, see, there are some information already, which is known to everyone, that Sinek Anand, we have already told that we will be acquiring, so that is already a known fact to everybody. Apart from that, we continue to look for suitable unit as and when we…
Also speaking: Speaker 13
Thank you for the opportunity and congratulations for the Gussarab numbers for you and our team, sir. Sir, just to take from the previous participants, you said that our share is 90%. Is that the correct understanding? Did I hear it correctly?
Speaker 10: Yeah, so, what we have mentioned is already that 10% of the construction share is there, but then there will be subcontracting costs and other costs and all those things will be there. But, yes, technically what you heard is correct.
Also speaking: Vinay Agarwal
Hello. So I'm audible. Thank you for the opportunity, sir.
Speaker 13: See, while we gave a guidance that we should be doing about 15% growth in the value, the margin should be in the range of 40 to 42%.
Thank you so much for the opportunity. It's just wanted to know in terms of the growth that you are expecting for next year, what sort of risk that could hinder our growth? What could potentially get that management fee in terms of business for us? Because of course, the industry that we are doing is pretty much…
Speaker 13: See, there is a war that's going on for last three years. There is a new escalation that has happened recently. We don't know what will happen. One of the vessel is stuck in Dubai, depending on how this situation percolates. This can be a risk. There is…
Also speaking: Speaker 10
Correct, correct.
Okay, and we don't see any sort of risk related to business for this at all, if at all, I look at it as a competitive landscape. Are there any other companies involved in the same business?
Speaker 10: No, we do not look at any kind of risk right now. And apart from, you see, we are one of the largest ship owners of these diving support vessels. And as far as others are concerned, they are like one vessel owner or two vessel owner kind of companies are…
Thank you for the opportunity, Alin Sir. So, regarding our UK investment, so we had, I think, I recall last year we had done this to ensure to get more business from Europe.
Speaker 13: See, we have not abandoned anything. The only thing is because of the current geopolitical situation, on a prudence basis, we have just taken that impairment. Otherwise, there is no potential impact.
Also speaking: Vinay Agarwal, Speaker 0, Speaker 10
Thank you. Hello? Yeah, how are you doing? Yeah, sir, congrats on a very good set of numbers. Sir, if I remember in Q3, you said, you know, Q3 margins were, you know, relatively high and peak. You were kind of questioning us for not assuming such kind of high margins, but, you know, Q4 has been margin at a much higher…
Speaker 13: No, no, we are not guiding any lower level margins. Please understand, when we questioned you in Q3, that has actually happened. CMS Paladin has not operated for Q4, and even Q1, we are not seeing the operations till date. Okay. So, depending on the dried-up…
Yeah, I am for the opportunity again. Please control your phone. Hello.
Speaker 10: Yeah, please go ahead.
So, thank you for taking my questions again. Regarding, can you just share what was the contribution from all subsidies in top-line and bottom-line for FI26?
Speaker 13: See, there is no major contribution of our subsidiaries for FY26. Basically, we have pruned down the operations in Dubai. Okay, we have sold a vessel last year, and there is another vessel which we might be selling in the coming year. Idea is that we should…
Also speaking: Speaker 10