Ladies and gentlemen, good day, and welcome to Cochin Shipyard Limited Investor Conference
Call hosted by Kirin Advisors Private Limited. This conference call may contain forwardlooking statements about the company, which are based on the beliefs, opinions, and
expectations of the company as on date of this call. These statements are not the guarantees of
future performance and involve risks and uncertainties that are difficult to predict.
As a reminder, all participant lines will be in the listen-only mode, and there will be an
opportunity for you to ask questions after the presentation concludes. Should you need assistance
during this conference call, please signal an operator by pressing star then zero on your touchtone
phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Sakhi Panjiyara from Kirin Advisors. Thank you, and
over to you, ma'am.
Sakhi Panjiyara:
Good day, everyone. On behalf of Kirin Advisors, I welcome you all to the investor conference
call of Cochin Shipyard Limited. From management team, we have Shri Jose V J, Chairman and
Managing Director, and Director (Finance); Dr. Harikrishnan S, Director (Operations); Shri
Rajesh Gopalakrishnan, Director (Technical); Shri Shiraz V P, Executive Director (Ship
Building); Shri Shibu John, Chief General Manager (Finance); Shri Syamkamal N, Company
Secretary.
Now, I hand over the call to Shri Jose V J for opening remarks. Over to you, sir.
Jose V J:
Yes. Good afternoon, everyone, and welcome to the Cochin Shipyard Limited investor con-call.
I'm Jose V J, CMD, Cochin Shipyard Limited, and I'm joining today by Dr. Harikrishnan,
Director (Operations); Shri Rajesh Gopalakrishnan, Director (Technical); Shri Shiraz V P,
Executive Director (Ship Building); Shri Shibu John, Chief General Manager (Finance); and
Shri Syamkamal, Company Secretary.
Let me start by giving you a brief overview of our operational performance during FY27 so far.
During the period, CSL delivered three vessels, including the third vessel in the series of eight
Anti-Submarine Warfare Shallow Water Crafts being built for the Indian Navy; the second
multipurpose vessel under the export order for our German client; the double-ended Ro-Ro ferry
to Kochi Municipal Corporation.
Our wholly owned subsidiary, Udupi Cochin Shipyard, also delivered three vessels during the
period, including two 3,800 TDW general cargo vessels to Wilson Group, Norway, and a 70tonne bollard pull tug to M/s. Polestar Maritime, an Adani Group company.
Over to financial performance, let me now briefly touch upon the details. For the first quarter,
our turnover stood at INR 1,094.21 crores, compared with INR 1,068.59 crores in the
corresponding period last year. PBT was INR 202.49 crores, compared to INR 249.54 crores last
year, while PAT stood at INR 151.45 crores, compared with INR 187.82 crores in the
corresponding quarter. Our EBITDA margin for the quarter was around 24%, while PAT margin
stood at around 14%.
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Joint venture, details about the joint venture with Drydocks World, Dubai. Coming to future
strategic initiatives, I would first like to update you on an important decision taken by Board of
Directors at the meeting held yesterday. It has also been intimated to the stock exchanges. The
Board has approved the proposal to form a joint venture with Drydocks World, Dubai, a DP
World company, for owning, operating, and managing CSL's International Ship Repair Facility,
ISRF, at Willingdon Island, Kochi.
As you are aware, ISRF is a state-of-the-art ship repair facility developed by CSL over an area
of around 30 hectares of land. The facility has a 6,000-ton ship lift and transfer system, six
workstations, and around 1,400 meters of berthing space. It can handle vessels of up to 130
meters and has an annual throughput capacity of up to 82 ships. The proposed joint venture will
have equal shareholding, with CSL and DDW holding 50% each. The JV will not only operate
the existing ISRF, but also undertake capacity augmentation through the addition of 10 more
workstations.
From a strategic perspective, we believe this partnership brings together the complementary
strengths of both the companies. CSL brings its established presence in the Indian maritime
sector and its existing ISRF infrastructure, while DDW brings significant international
experience, operational expertise, and a global customer network in ship repair.
The partnership is expected to help us improve operational efficiency, adopt global best practices
and advanced technologies, reduce turnaround time, and importantly, attract international
customers to Kochi. We believe this will provide a strong platform for sailing up the ship repair
business in Kochi.
I would also like to highlight the transaction structure. The ISRF undertaking is proposed to be
transferred to the JV company on a slump sale basis, as a going concern, for a consideration of
INR 1,800 crores. CSL will receive 50% of the consideration in cash, while the balance 50%
will be received in the form of equity in the shares of JV company. The valuation of INR 1,800
crores is based on an independent third party valuation.
The definitive agreements, including the joint venture agreement, shareholders agreement, and
business transfer agreement, and license agreement, have been finalized. The JV agreement will
be signed tomorrow on the sidelines of the BRICS Summit at New Delhi, while other agreements
will be signed after incorporation of JV and receipt of requisite approvals.
There are certain regulatory and shareholder approvals required before the transaction can be
completed. These include approval from the Ministry of Ports, Shipping and Waterways,
DIPAM concurrence, and shareholders of CSL. In particular, shareholder approval is required
for the proposed transfer of the ISRF undertaking. We will, therefore, be coming out with a
postal ballot to seek the requisite approval of our shareholders. Subject to receipt of the necessary
approvals, the transaction is targeted to be implemented before the end of the current financial
year.
Another important update I would like to share with investors is regarding the proposed Block
Fabrication Facility at Kochi. As you may recall, CSL has signed an MoU with HD KSOE of
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September 10, 2026
Korea for exploring various areas of cooperation, including setting up a Block Fabrication
Facility at Vallarpadam, Kochi for utilization for the new drydock and the joint shipbuilding
activities.
Since then, CSL and HD KSOE have had series of discussions and engagements. However, we
have not been able to arrive at a mutually agreed definitive terms for establishing BF facility
through a joint venture. CSL now will proceed with the development of the facility
independently at a smaller scale, while we will continue to keep the option of a suitable strategic
partnership open, if such an opportunity provides value to the company in future.
I would also like to clarify that this decision is specific to the Block Fabrication Facility only.
Both CSL and HD KSOE remain positive about the relationship, and have expressed their
willingness to continue exploring opportunities for collaboration in other areas of mutual
interest.
Another important project is our proposed ship repair facility at Vadinar, Gujarat, which CSL is
developing jointly with Deendayal Port Authority. The project has already received CCEA
approval in May this year. The facility will have two floating drydocks, capable of handling
large vessels of around 250 meters in length. We expect the environmental clearance shortly.
And once the required clearances are in place, we are targeting to operationalize the facility
within 36 months from the receipt of environmental clearance. Now that our joint venture with
Drydocks World Dubai have been finalized, we may also explore the possibility of collaborating
with them for the operation of this facility also at Vadinar.
Another important update we would like to share is regarding our proposed facility at V.O.
Chidambaranar Port in Tuticorin. CSL participated in an e-auction conducted by the port for a
30-year lease of land and a waterfront to establish a hybrid shipbuilding and ship repair facility,
and we emerged as a successful bidder.
Under this arrangement, against a one-time payment of INR 305.76 crores, CSL will get access
to around 110 acres of land and 17.29 acres of waterfront area for a period of 30 years. We
believe this provides an excellent opportunity for CSL to expand its presence and develop a
hybrid shipyard in that location.
The facility will enable us to participate in the growing midsize and niche shipbuilding segments,
including European short sea vessels and wind energy vessels. It can also provide additional
capacity to our subsidiary, Udupi Cochin Shipyard, which is currently constrained by availability
of the land, and as a result, has limited scope of taking up new orders.
We are currently working out the modalities of developing the facility, with shipbuilding, ship
repair, and offshore fabrication activities being planned at that location. For all this strategic
project, government support and policy initiatives will be very important, and CSL has already
applied for financial support under the Government of India Shipbuilding Development Scheme
for our greenfield and brownfield expansion project, which will help reduce the overall funding
requirement and actual cash outflow for these investments.
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We also plan to fund these projects through a combination of debt and equity. In this context,
Maritime Development Fund's Interest Incentivisation Fund, which provides interest subvention
up to 3% on the loans extended to the shipyards and shipping companies, will also be very
helpful supporting the financing of this strategic initiative.
Finally, coming to our order book, our current unexecuted order book stands at around INR
22,000 crores, which continues to provide us with good revenue visibility. We have also declared
as L1 for five number of next-generation survey vessels for the Indian Navy, valued
approximately INR 5,000 crores. Once this contract concludes, the order book will be around
INR 27,000 crores.
With that, I will conclude my opening remarks. We would now be happy to take your questions.
Thank you everyone for joining us today.
Moderator:
Thank you very much. We will now begin the question-and-answer session. First question is
from the line of Mohit Chaurasiya, Individual Investor. Please go ahead. Mohit, may I request
you to unmute your line and proceed with your question?
Due to no response, we move on to the next participant. Next question is from the line of Garvit
Goyal from Serene Alpha. Please go ahead.
Garvit Goyal:
Hello. Am I audible?
Moderator:
Yes, go ahead.
Garvit Goyal:
Hi. Good afternoon. My question is on Green Maritime Propulsion JV. I wanted to understand
more on the product basket which will be catered by this JV and also, what is the ball-park scale
that this JV is targeting over the next 3 years within that product basket? And lastly, when can
we expect some meaningful contribution coming out of that JV?
Harikrishnan S:
The company was incorporated in June '26. And we are targeting a product range of energy
storage systems, especially for the marine sector. Then, electrical power management systems
and all. And we are targeting a revenue as per our business plan, we are targeting a revenue of
INR 640 crores by 5th year. This is our plan.
Garvit Goyal:
And what kind of competitive landscape do you see for these product baskets which you
mentioned? How do you see -- how many competitors are already there or maybe coming in the
upcoming years? I'm just trying to understand what kind of margins we can have in this product?
Harikrishnan S:
We expect an EBITDA margin of around 20%. And as per our green tug transition program and
other various initiatives in the green sector, we expect a lot of orders for the battery in India in
the coming years. So, the prospects are very high.
Jose V J:
See, the basic purpose of constituting that JV is that see, now HBL is a number one battery
manufacturer, but they are not in the marine sector. And we have our expertise in the marine
sector. So this company will marinize that battery requirement for the marine usage. Now all the
batteries and battery systems are being imported for the marine operations.
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So already we are building four green tugs. The battery system for that tugs are being routed
through that JV. So CSL has already given an order for that JV company. But we are not
expecting much revenue or top line from that company in the immediate future.
Harikrishnan S:
So, progressively, we are aiming a target of around INR 640 crores in the 5th year.
Garvit Goyal:
Okay. And this 20% margin which you mentioned, is it a PAT margin you are speaking about,
or EBITDA margin?
Jose V J:
It is on a ballpark figure only because there are a lot of R&Ds also involved, but he was
mentioning about EBITDA margin.
Harikrishnan S:
Yes, the business plan is yet to be evolved. We are on the process of making a business plan.
Garvit Goyal:
Okay, okay, okay. And your partner HBL has mentioned that this JV has placed orders for
batteries for two electrical tugs, right? So, I wanted to understand with respect to this particular
product category, what is the size of -- what is the market size do you people feel maybe in next
three years for electrical tugs? What is the bid pipeline there, and how many competitors are
currently bidding in along with ourselves?
Rajesh Gopalakrishnan:
See, actually, this electric propelled propulsion on the tug segment is just evolving. And this is
because the Government of India has also recently declared the GTTP or the Green Tug
Transition Program, wherein they're trying to push the major ports to start off with electricpropelled tugs.
We feel it will take a little time for a mass movement on this one, purely because the electricpropelled tugs would cost almost twice that of a conventional diesel-propelled tug. But having
said that, with environmental requirements becoming more and more stringent, there is definitely
no other way to go, but move on this front.
So, Government of India is also wanting to see 50% of our tugs go green by around 2035 to '40.
So, there are going to be volumes that will come up, but I think the real movement will probably
happen maybe 3, 4 years down the line.
Harikrishnan S:
So, to add more to that, so as per this program, that all the conventional diesel-powered harbor
tugs will be replaced with zero-emission vessels. So, this is implemented across various phases.
And by 2040, for we are targeting a 50% green tug by year 2035. So, the total investment in this
sector is around INR 1,000 crores in the next 10 years, and major pie is for the battery. So, we
foresee a good scope for this batteries in the coming years.
Jose V J:
And in this JV, 60% is held by HBL, and 40% is CSL. So we have only 40% stake in that
company.
Garvit Goyal:
Okay. And ultimately, whatever the tugs order we are getting in this JV, batteries will be supplied
by HBL, right?
Jose V J:
Yes. Yes.
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September 10, 2026
Garvit Goyal:
Understood. Understood. And what kind of capital we are looking to deploy in this JV, sir, over
the next 3, 4 years?
Jose V J:
Not much. Because see, it is a technology-driven business, the manufacturing will be done by
the HBL. So, we are not setting up a manufacturing facility at all. We'll be doing marketing and
R&D. And the total capital is only INR 50 crores.
Garvit Goyal:
Okay. This tug will be manufactured by HBL or you? Because you people are having that skill,
isn't it?
Jose V J:
No, no the ship or tug will be manufactured by us, the battery will be manufactured by the JV
through the existing facility of HBL.
Garvit Goyal:
Okay.
Jose V J:
Some kind of contract manufacturing.
Garvit Goyal:
Understood. And this entire revenue thing, for example, this tug, that will be splitted between
60/40, right? HBL 60 and 40 you.
Jose V J:
Not the turnover of tug. Only the turnover of battery system.
Garvit Goyal:
Can you explain a bit more, like, I'm just confused over here. Means how the revenue will be
split? Because what I am understanding is if you people are selling the tug, right? The JV is
selling the tug, right? So, battery is the internal component, which you are purchasing from HBL
as a stand-alone entity.
Jose V J:
See, the order for the tug will be taken by Cochin Shipyard. And the order for supplying the
battery system will be given to the JV. So the JV will have the turnover of only the battery
system.
Garvit Goyal:
Okay. And that would be manufactured by HBL?
Jose V J:
Yes.
Garvit Goyal:
So, this INR 640 crores which you are speaking about, this will be the JV's revenue, right?
Jose V J:
JV's revenue and that will be consolidated by HBL only, because they are holding 60% share.
Harikrishnan S:
That is by the 5th year, progressively INR 640 by 2031.
Garvit Goyal:
Okay. And just last thing, then I will join back the queue. This 20% number which you
mentioned, is it EBITDA margin or the net margin, sir?
Jose V J:
It is an EBITDA level, but the business plan is yet to be finalized. We are discussing that only,
but it's only the ballpark figure of 20%.
Garvit Goyal:
Got it. Thank you very much, sir. Thank you. All the best for the future.
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Moderator:
Thank you. Next question is from the line of Dipen Vakil from PhillipCapital. Please go ahead.
Dipen Vakil:
Hi, sir. Congratulations on the joint venture, sir. My first question is on the lines of, sir, you
mentioned about the Drydocks World JV. So, what I wanted to understand over here is that, now
will this -- so, while the complete operation lies with DDW. So what kind of orders -- so will
you be involved in terms of ordering or anything? Or will this facility just cater to DP World's
vessels? As to how about – how will be the operations going on? So, is it just an entity covering
for DP World or it will be still cater to the domestic demand as well?
Rajesh Gopalakrishnan:
Yes. So, it's like this. The reason for bringing in DDW is to bring in global scale, global
efficiencies, and connects into the global market. Having said that, CSL today commands a
significant captive market in India for this size of vessel. The ISRF facility can handle vessels
up to 130-meter long and 6,000 tons in weight, and we have a fairly good captive market for
this.
We also have a lot of defense and other government vessels, which fall under this size and
category, which will continue to be routed through CSL. These orders will be taken by CSL, and
will be executed by the JV, it's a sort of an execution JV, if we may call it so, with the freedom
for DDW to bring in their clients, and it will become an add-on sort of a -- add-on to the capacity
which we currently or the market that we currently target. So, it is seen from that perspective.
So, the business being held by CSL currently will continue to be available for the facility.
Dipen Vakil:
And how about the opportunity which is there, which is addressable by both? So, considering
that yours is a -- so DDW will be a JV, and you also have an active ship repair presence in India.
So, for the orders where both of them are qualified, as to how the split will happen? Whether
there will be any market share loss? Or whether any such thing which can happen, which can be
detrimental for CSL?
Rajesh Gopalakrishnan:
No. See, actually, the ISRF can handle vessels only up to 130-meter long and 6,000 tons in
weight. Even today, all the larger vessels are being handled across the main CSL yard and across
all our units. So, we have, between the 2 of us, have a very clear understanding that there will
be no ingress into that market by DDW, and the current market share of CSL in the other
segments will continue to be held by CSL.
The JV will also continue to do the jobs that I told earlier, but we are expecting more, global
vessels to be brought in by the JV, by DDW, because they will now want to tap into their global
clientele as well. So, otherwise, there will be no impact on the business that we hold.
Dipen Vakil:
Got it, sir. That's very encouraging. Sir, second question on the lines of your order book and
order pipeline, so you mentioned that your order pipeline, currently, you are L1 in towards
defense order for Next Generation Survey Vessel. Beyond that, what is the order pipeline maybe
in a year or two that you're looking at, either in defense or in the commercial side of it, or even
in the export side of it, which one gives us a visibility on the order inflow and the order book for
the company?
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Jose V J:
See, actually, in the defense, there are lot of programs are running in the order pipeline like the
LPD and...
Harikrishnan S:
Minesweeper etc.
Jose V J:
LPD from defense side, the major order which we are expecting soon is around LPD four
numbers, that will be approximately INR 32,000 crores. Then, 12 numbers MCMV,
approximately INR 36,000 crores. Then, P-17 Bravo, seven numbers, that will be approximately
INR 49,000 crores. So, these are the major orders which we are expecting from the defense side.
Rajesh Gopalakrishnan:
RFPs.
Jose V J:
RFPs, because there are other competitors also. So, we will also be participating in the bids. And
from the Indian commercial side also, because of the demand aggregation being run by the
Government of India, there's a requirement of around 432 vessels over a period of 10 years. So,
already SCI and the newly formed joint venture company, BCSL, have come out with three or
four tenders already. We are participating in that, and other companies are also participating in
that. So, the pipeline is good for all shipyards in India.
Dipen Vakil:
Got it, sir. Sir, any contract finalization expected in this year amongst in the commercial side?
Jose V J:
In the commercial segment, we are actively negotiating with one more dredger because, as you're
aware, we are building one 12,000 m³ dredger for Dredging Corporation of India. They want a
repeat one for that. So, that negotiation is going on. It's on a nomination basis to CSL. Then,
other we are also discussing with Andaman for a four numbers 500-passenger vessels. That is
also on a nomination basis. Then, we have also participated various tenders of SCI, with the MR
tankers etc, but that result of that has yet to be published.
Dipen Vakil:
Got it, sir. Sir, last question. Sir, you mentioned about the block fabrication unit that you are
coming up with that at Kochi facility, and now you are going solo into it, and maybe it will be
at a smaller size than first envisaged. So, can you help us with what is the current block
fabrication capacity, and what could be the block fabrication capacity once the new facility
comes in?
Jose V J:
Presently, our block fabrication facility is around 12,000 tons per year in CSL main facility. But
because having commissioned the new drydock, we need more steel throughput. So, what we
are expecting is that with the Hyundai, we were planning to have a 1 lakh ton capacity block
fabrication facility. Since we are going alone now, we are planning to have a reduced capacity
of around 60,000 ton per annum.
Dipen Vakil:
Got it, sir. Sir, very encouraging.
Jose V J:
So, 60,000 tons from the new block fabrication facility plus 12,000 tons from our existing
facility. So, it will be around for the throughput will be around 72,000 tons.
Dipen Vakil:
Got it. Got it. Thank you so much, sir, and all the very best.
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Jose V J:
Thank you.
Moderator:
Thank you. Next question is from the line of Mohit Chaurasiya, Individual Investor. Please go
ahead.
Mohit Chaurasiya:
Hi, sir. Thanks for taking my question. Just wanted to understand the cash flow side of the
business a little better. Despite the strong PAT in FY26, operating cash flow was negative,
mainly because of that increase in inventory and receivables. And now you're entering another
investment cycle in ship repair, including the Vadinar project. So, from normalized perspective,
what kind of cash conversion should we expect from the business? And now on new ship repair
investments, what sort of ROC or a return threshold are you targeting?
Jose V J:
Can you can you repeat the question once again, please?
Mohit Chaurasiya:
Even the FY26 PAT was very strong, the operating…
Moderator:
Mohit, sorry to interrupt you. Can you speak through the handset directly, please?
Mohit Chaurasiya:
Okay. Hello?
Moderator:
Go ahead.
Mohit Chaurasiya:
Am I audible?
Moderator:
Yes.
Jose V J:
Yes.
Mohit Chaurasiya:
So, I was asking that even the FY26 PAT was strong, the operating cash flow was negative,
mainly because of receivable and inventory. And now we are entering the -- another investment
cycle. So, from normalized perspective, what kind of cash flow should we expect from the
business? And this new investment, what sort of ROC we are targeting here?
Jose V J:
See, why that operating cash flow is negative, mainly because in the order book, we have
commercial orders from the export also, from the European customers. In the European export
market the cash flow is tail-ended.
Like, during the construction period, they will say pay around 30% during construction period
and 70% on delivery. Like, on signing, they will pay 10%, then keel laying 10%, launching 10%,
and delivery, maybe 70%.
So, now, that the vessel delivery the orders which has been taken during the period of '23 and
'24 and all, they have all slated to be delivered in current and next financial year. So, we have
already completed the construction of around 80% to 85% to 90%, but whereas we have received
the money up to 30% only.
We are targeting delivery of around 10 vessels during the -- this current financial year. As
mentioned in my opening remarks, we have already delivered three. So, once we start delivering
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the vessels, we get the 70% or 60% money from the owners, so the cash flow will become
positive.
Mohit Chaurasiya:
Okay. So, we can expect that cash flow will become positive in FY27, right?
Jose V J:
Yes. FY27, the cash flow will be positive.
Mohit Chaurasiya:
Okay. And what kind of ROC we are looking with new investments?
Jose V J:
Around 14, the ROC will be around 14% to 15%.
Mohit Chaurasiya:
Okay, sir. Thank you.
Moderator:
Thank you. Next question is from the line of Garvit Goyal from Serene Alpha. Please go ahead.
Garvit Goyal:
Hello. Thanks for the follow-up. Sir, again, the question is on Green Maritime. I understood that
HBL will be playing the manufacturing partner role for the component, right? What will be the
role of CSL here across the product basket that we will be catering to?
Jose V J:
See, the…
Harikrishnan S:
I think this is a synergy between our shipbuilding skills and the experience of HBL in the
manufacture of energy storage systems. So, this is actually a synergy between the two
companies.
Garvit Goyal:
No, that I understood.
Rajesh Gopalakrishnan:
Our inputs will actually…
Garvit Goyal:
Yes.
Rajesh Gopalakrishnan:
Our inputs will actually come in in helping HBL to marinize the systems.
Garvit Goyal:
Yes.
Rajesh Gopalakrishnan:
See, the thing is our battery companies are all catering currently to the landside segments,
automobiles or, you know, the landside segments. So, marinizing requires a little bit of expertise
and knowledge to come in from the marine sector, and that is what we will come in with.
Jose V J:
And now in India, all this marine batteries are being imported presently. So, once we develop
such a technology, this JV company can supply that marine batteries to CSL and to other
shipyards also.
Garvit Goyal:
Okay.
Jose V J:
This is a prospect which we are.
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Rajesh Gopalakrishnan:
So, maybe if I can just explain that a little for you. Recently, we have delivered the India's first
indigenous hydrogen fuel cell vessel, which is now operational in Varanasi. So, here also, fuel
cells, India does not have marine fuel cells.
So, we teamed up with KPIT Pune, who had developed fuel cells for automobiles, and this was
marinized and used on a ship or a vessel for the first time. So, this is something similar that we
will do with HBL.
Garvit Goyal:
Okay. And sir, on that side also, this hydrogen marine fuel cell vessel, how much scale are we
targeting there? And what kind of arrangement do we have for our technology partner, which is
KPIT Pune, as you mentioned?
How do you see this business, this venture, to scale up over the years? And what kind of
commercial arrangements do we have with them? Are we going to share some royalty? Or how
exactly is it going to take place?
Rajesh Gopalakrishnan:
See, this was actually a technology demonstrator. We had actually done it as a pilot project.
Worldwide, hydrogen fuel cell is just in the initiation stage. People are just starting off, you
know. So, it's more--it has a lot of factors that will come into play. One is, of course, the
development of hydrogen fuel cell-propelled vessels, but again, the landside infrastructure, the
hydrogen availability, the bunkering facilities, a lot of systems have to come into play.
The ecosystem will take time to develop. So, we were just wanting to be onboard the technology
and see how it goes, so that we have that front-runner advantage, and we have the technical and
the technological capabilities, which is what we proved. So, converting that into a business and
returns may will take a little time, but what I can assure you is we will be up there when the time
comes.
Garvit Goyal:
Got it. Got it. And from the JV, have we delivered some Can we expect some revenue to kick in
in FY27?
Jose V J:
FY27, not much turnover. But it will not come to our top line.
Garvit Goyal:
Okay. But at least, bottom line will be there, right? Because if it's a JV, 40% should be there.
Jose V J:
Yes, yes but negligible.
Garvit Goyal:
Okay. Thank you, sir. Thank you very much.
Moderator:
Thank you. Next question is from the line of Bhavya Gandhi from Bajaj Alternate. Please go
ahead.
Bhavya Gandhi:
Yes, hi. Thanks for the opportunity. Just wanted to understand basis the order book INR 22,000
crores that we have, how much of revenue booking can we expect over the next two years? And
also on the margin front, if you can throw some light on the EBITDA margin, how much of the
EBITDA margin can one expect over the next two years?
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Jose V J:
See, the revenue booking, last year, we did a consolidated turnover of INR 5,022 crores.
Normally, we guide around 12% every year to the investors. So, we are still sticking on to that,
because normally we guide around 12%, but finally, we may end up between something around
12% to 15% every year. That's what, but conservatively, we guide around 12%. EBITDA margin
will be around 14%, blended on a very conservative basis.
Bhavya Gandhi:
Okay. And also basis the order pipeline, you said you are already L1 for the next-generation
survey vessels. When can we expect the order contract signing for this? And also, for any other
contracts bid pipeline that which is there in the bid pipeline, when can we expect the contract
signing for them? When can we see the order book rising hereon? Yes.
Jose V J:
That NGSV, the Indian Navy, the procedures are bit longer. We expect that the order to be inked
around November this year. And DCI, the repeat order for the next dredger, it can happen within
two months. That's what we expect.
Bhavya Gandhi:
Hello?
Moderator:
Bhavya, do you have any follow-up question?
Bhavya Gandhi:
Yes, I just missed out the second one. Which order did you mention, sir?
Jose V J:
Dredging Corporation of India. We are building a dredger currently. They require a sister vessel
for that, second vessel. So, that we will be we will be getting on a nomination basis. So,
discussions are going on. So, that contract may be concluded within two months.
Bhavya Gandhi:
And what will be the order value, sir?
Jose V J:
That is around INR 1,300 crores, one ship.
Bhavya Gandhi:
Okay. Okay. So, basically, this year, we can expect INR 5,000 crores and INR 1,300 crores order
wins, that is the right understanding?
Jose V J:
Yes, these are expected orders for this financial year, but there are other tenders also we are
participating, and the export orders also we are negotiating. That will we will take as and when
it comes. We cannot tell a definitive time for that.
Bhavya Gandhi:
Okay. Fair enough. Thank you so much. That's it from my end.
Moderator:
Thank you. Next question is from the line of Abhishek Poddar from Citadel. Please go ahead.
Abhishek Poddar:
Hi. Thanks for taking my question, sir. First regarding the margins, so if you look at the last
three years, the margins were stronger than…
Moderator:
Abhishek, sorry to interrupt. Can you please speak through the handset?
Abhishek Poddar:
Is it better now? My voice is clearer?
Moderator:
Can you speak a little louder, please?
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Cochin Shipyard Limited
September 10, 2026
Abhishek Poddar:
Okay, I'll try to, Yes. Sir, regarding the margins, if I look at last 3 years, EBITDA margins were
much higher than 14%. How to think about the margin from here? You have guided for 14%
this year. This is mainly because of the lower margin in the ship repair, and how would we
should we think about next 2 years?
Jose V J:
See, the higher margin for the last 3 years is mainly because we had some the nominated orders
like in aircraft carrier for the shipbuilding, Indian the indigenous aircraft carrier. In ship repair
also, there were two aircraft carrier refit. So, there the margins are higher. But going forward,
we cannot expect such margins from the commercial orders or the defense order, because now
all the tenders from the defense is also on a tender basis.
And also, now that the higher EBITDA margin was also on account of we were having a cash
surplus of around INR 2,000 to INR 3,000 crores always, that interest was also a steady income
for every year. So, having capitalized or commissioned the two capex projects of ISRF and
Drydock, which where we have spent around INR 3,000 crores without any loan, that cash
surplus is also not there now. So, these are the reasons for reduced EBITDA margin compared
to previous years.
Abhishek Poddar:
Understood. So, this EBITDA margin includes the interest income that we earn on cash reserves?
Jose V J:
EBITDA margin, normally we include the interest income also, because it is certain element for
every year. If you take last 10 years, this interest income was a normal interest income every
year. So we used to include that.
Abhishek Poddar:
Understood. So, because I was looking at the first quarter, what you have reported, and that was
like more than 17. So, we should assume that the remaining quarters and all, it will be little lower
than 17% to kind of reach an average of 14% for the year?
Jose V J:
In shipbuilding margin is around 10% to 12%, and in ship repair, we get around 20% to 22%.
And shipbuilding constitutes around 70% and ship repair constitutes around 30%. So, blended
will be around 14%, 15%, something like that on a very conservative basis.
Abhishek Poddar:
Okay, that makes sense. Thank you for that, sir. Second question is regarding this inquiry
pipeline that you mentioned, LPD and MCMV and P-17 Bravo. What should we expect to get
ordered in next '27, '28? Next 12, 18 months?
Jose V J:
See, Navy is yet to come out with the RFP for the LPD, but I understand P-17 Bravo is already
they have issued the RFP. So, even if they Now, I think the three months or four months time
for submitting the bid. After that, the normally Navy, the procedure is to finalize the bid, it takes
time, because the NGSV is also after emerging as L1, it has become almost one year almost. So,
they have a CCS approval, then they do a PNC and all. So, we can't expect the timeline for that,
but we are actively participating in all these bids. Since that timeline is not in our control, we
cannot say anything.
Abhishek Poddar:
Understood. Because last time P-17 Bravo was built by other shipyards, Garden Reach and -Yes. So do we have capability we have to bid for it or…
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Cochin Shipyard Limited
September 10, 2026
Shiraz V P:
We are a category A shipyard and we are qualified.
Jose V J:
We are a category A shipyard, and we are qualified to bid for that, and we are submitting the bid
also.
Abhishek Poddar:
Understood. So, this will be financial L1 bid and L2 bid, who will get the contract here?
Jose V J:
Yes.
Abhishek Poddar:
Okay. Understood, sir. Thank you and all the best.
Moderator:
Thank you. Next follow-up question is from the line of Dipen Vakil from PhillipCapital. Please
go ahead.
Dipen Vakil:
Yes. Thank you for the follow-up opportunity, sir. Sir, you mentioned about the 10 vessels that
are to be delivered in FY '27, out of which three are delivered. So, can you tell us about your
schedule as to which vessels are you planning on delivering, whether those are anti-submarine
warfare, so multipurpose vessels, NGM, and what would be the status on NGMV?
Harikrishnan S:
NGMV, Yes. We are planning to deliver 10 vessels in this financial year. So among the three
submarines we are planned this year, we have already delivered one, and the balance will be
delivered by December 2026.
Jose V J:
That's two more ASW.
Harikrishnan S:
Two more ASWs. Regarding the multipurpose vessel, we have already delivered one. We are
planning to deliver two more in this financial year. We will be delivering that trailing suction
hopper dredger by next month. So, it is under the fag end of construction, and trials we are
planning to start by the end of this month.
Then, we have got an order for two commissioning service vessels for a Cyprus client, and we
will be delivering the one by October '26 and the other one by end February or early March.
Then, we are building two zero-emission container vessels for Samskip, Netherlands, and we
are planning to deliver one number by end February. And this is our planned schedule for this
year, financial year.
Dipen Vakil:
Got it, sir. Yes. So, that's it from my side, sir. Thank you so much.
Moderator:
Thank you. Next follow-up question is from the line of Garvit Goyal from Serene Alpha. Please
go ahead.
Garvit Goyal:
Hi. Thanks for the follow-up again. I wanted to understand the kind of differentiation we are
trying to make in the terms of the marinized batteries that we will be manufacturing in the JV.
You mentioned currently all these batteries are getting imported into India. So, against those
batteries, what kind of differentiation we will be bringing in, is it in the terms of cost? Or is it in
the terms of quality? How we should look at that?
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Harikrishnan S:
This marine batteries has to undergo more strenuous conditions like salt, vibration, etcetera. So
and being in the electric mobility sector, HBL has got expertise and technology in this area. So,
we want to leverage those advantages.
Garvit Goyal:
Okay. But how we should look at the cost differentiation against the imported batteries? Because
ultimately, why those buyers will shift to this JV, instead of keep on importing the batteries?
Harikrishnan S:
Yes. See, there will be, they have got multiple advantages. One is the cost reduction. Local
production significantly will reduce the transportation cost and import duties. So, this will
obviously aid to decrease cost. Then, there will be a supply chain resilience in the especially in
this period of crisis and all, it will improve the supply chain resilience if we it is indigenously
manufactured. So, disruptions can be addressed evenly.
Then, delivery. There will be faster delivery if we are producing these batteries in India. And
moreover, being since we are focused on sustainability goals, obviously, this venturing into an
electric battery production is of most significant, especially in this transition period to electric
mobility and all. These are the four advantages. So, for informatively, major shipyards in the
world are now having strategic alliances with this battery manufacturer for their supply chain
resilience and all. So, we are also moving in the same path.
Moderator:
Thank you. Garvit, I will request to come back for a follow-up. Next question is from the line of
Deepak Krishnan from Kotak Institutional Equities. Please go ahead.
Deepak Krishnan:
Hi, sir. Am I audible?
Jose V J:
Yes, go ahead.
Deepak Krishnan:
Yes. Just wanted to understand these the various capex plans that you have. So today with say
INR 1,800 crores ISRF, what is sort of the revenue potential we are looking at? Maybe 3 years,
5 years? Similarly, by when does Phase 2 capex get done, and what is the revenue potential post
that?
And if I look at the other capex also 3 years you said Vadinar ship repair facility, and you have
INR 1,500 crores, INR 1,600 crores there. What is the vision in terms of maybe after 3 years?
So, assuming you get it in 1 year, this [inaudible 0:49:52] and then how much is the revenue
potential, say, by 2030, 2032 equivalent?
And similarly, your Block Fabrication Facility, as well as your Tuticorin facility, for all of these
four that you are spending -- literally, if I look at it, you're going to spend INR 6,000 crores of
capex over the next 5 years, INR 6,500 crores. Broadly, what are the revenue targets from this,
and how are you looking at these investments?
Jose V J:
See, from the ISRF facility, we are expecting to get around INR 600 crores turnover over a
period of next 2 years, to start with. Then, it will scale up to around INR 1,000 crores to INR
1,200 crores over a period of 5 years. And from Vadinar, the revenue will start recognizing only
from 36 months from the date of getting environmental clearance.
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So, after 3 years, we may get a turnover of around -- to start with around INR 300 crores to
around INR 500 crores to INR 600 crores. That is for Vadinar. In Tuticorin, we are in the DPR
stage only. But there also, we expect a turnover of around -- should start with around INR 650
crores to INR 700 crores to scale up to around INR 1,800 crores to INR 2,000 crores over a
period of next 7 to 8 years.
And as this capex will be spent over a period of next 5 years, and we will be going mostly
through a debt-equity ratio of around 80:20. And there is also a Shipbuilding Development
Scheme announced by the Government of India, by which we get a 25% capex subsidy for all
these projects, and also the Interest Incentivisation Fund of around 3% subvention also, interest
subvention also we'll get. So, we want to tap all these benefits while executing this capex.
Deepak Krishnan:
Sure, sir. And maybe just wanted to understand, IAC-2 at this point, there is no visibility. Is that
understanding correct?
Jose V J:
I would say there is no visibility, because as of now, it has not reached the AoN stage, because
Navy has a procedure called the Approval of Necessity. Even as per our information, we don't
have that authentic information, but it has not reached the AoN stage also. But if it comes, Navy
takes a decision, it will come to us. That's what we feel.
Deepak Krishnan:
Sure, sir. And maybe, you know, just wanted to sort of understand on the various programs that
are there, which ones on the naval side do you think you have a higher probability? Like some
of the previous participants asked, P-17 Bravo, there's always someone who's done P-17 Alpha.
So, maybe if I look at the potential programs, what are the ones that can come through you?
And this entire, domestic shipbuilding, you know, what kind of order inflow potential over next
2, 3 years or revenue potential you see from SCI and the other entities that sort of created for
containerized vessel manufacturing?
Jose V J:
See, from the defense order book pipeline, as you rightly said, the P-17 Bravo, because other
yards are more competitive because they have the expertise or they have already done the
vessels. But if you look into that aspect, then the LPD will be the most suitable for us, and -- the
possibility is more on LPD, because we have already done aircraft carrier, and we have a large
dock, and the steel heavy platform is LPD. So, the LPD and MCMV will be more suitable for
us compared to P-17 Bravo, though we will participate in all the tenders aggressively.
Deepak Krishnan:
Sure. And similarly, just on the domestic commercial shipping opportunity we have, what is the
sizable realistic orders we are targeting, maybe if not this year, this year, next year, and maybe
next couple of years? And then what is the cycle of these orders, and what is the potential revenue
that we can get maybe in '28, '29 and '30?
Harikrishnan S:
For MR tankers, we have submitted the technical bid, and the indicative cost is around INR
1,700 crores. Similarly, for Aframax tanker, we have responded to the expression of interest,
and the indicative cost is around INR 2,600 crores.
Deepak Krishnan:
Sure. And what is your order cycle for this, typical execution cycle for this type of orders?
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Cochin Shipyard Limited
September 10, 2026
Harikrishnan S:
Normally, 36 months for the first one, and six -- and the subsequent vessels, 6 to 8 months.
Deepak Krishnan:
Sure. And maybe on your margins, I still didn't get the 14% guidance. Could you just highlight
that how much is shipbuilding, and how much is ship repair, and maybe different than
commercial, if you're giving that split as well?
Jose V J:
The shipbuilding as a whole, it's around 10 percentage to 12 percentage margin, and ship repair,
it's around 22 percentage to 24 percentage. So, the blended will be around 14 to 15 percentage
conservatively because shipbuilding constitutes around 70 percentage of turnover, and ship
repair around 30 percentage of the turnover.
Deepak Krishnan:
Sure. Sure, I get that. And excluding other income, how much would be this EBITDA? Like
you're seeing 200 basis points is the other income impact, roughly?
Jose V J:
I have not considered other income because now we don't have that much other income because
going forward.
Deepak Krishnan:
Yes, yes. Okay, sure. I get that. Sure, sir. Those were my questions. I'll get back in the queue.
Moderator:
Thank you very much. Ladies and gentlemen, we'll take that as a last question. I'll now hand the
conference over to Ms. Sakhi Panjiyara for closing comments.
Sakhi Panjiyara:
Thank you everyone for joining the investor conference call of Cochin Shipyard Limited. If you
have any further queries, please write to us at research@kirinadvisors.com. Once again, thank
you everyone for joining the conference. Good day.
Moderator:
Thank you very much.
Jose V J:
Thank you all for joining the conference.
Moderator:
Thank you all. On behalf of Kirin Advisors, that concludes this conference. Thank you for
joining us, and you may now disconnect your lines. Thank you.
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