Cochin Shipyard

“And once the required clearances are in place, we are targeting to operationalize the facility within 36 months from the receipt of environmental clearance.”

“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.”

“We expect the environmental clearance shortly.”

“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.”

“We are currently working out the modalities of developing the facility, with shipbuilding, ship repair, and offshore fabrication activities being planned at that location.”

“Presently, our block fabrication facility is around 12,000 tons per year in CSL main facility.”

“Since we are going alone now, we are planning to have a reduced capacity of around 60,000 ton per annum.”

“The facility has a 6,000-ton ship lift and transfer system, six workstations, and around 1,400 meters of berthing space.”

“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.”

“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.”

“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.”

“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.”

“Then, other we are also discussing with Andaman for a four numbers 500-passenger vessels. That is also on a nomination basis.”

“That NGSV, the Indian Navy, the procedures are bit longer. We expect that the order to be inked around November this year.”

“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 from Vadinar, the revenue will start recognizing only from 36 months from the date of getting environmental clearance.”

“The facility will enable us to participate in the growing midsize and niche shipbuilding segments, including European short sea vessels and wind energy vessels.”

“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.”

“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.”

“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.”

“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.”

“Now all the batteries and battery systems are being imported for the marine operations.”

“Our EBITDA margin for the quarter was around 24%, while PAT margin stood at around 14%.”

“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.”

“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.”

“EBITDA margin, normally we include the interest income also, because it is certain element for every year.”

“In shipbuilding margin is around 10% to 12%, and in ship repair, we get around 20% to 22%.”

“Yes. FY27, the cash flow will be positive.”

“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.”

“In the European export market the cash flow is tail-ended.”

“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.”

“Like, during the construction period, they will say pay around 30% during construction period and 70% on delivery.”

“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.”

“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.”

“We also plan to fund these projects through a combination of debt and equity.”

“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.”

“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.”

“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.”

“Subject to receipt of the necessary approvals, the transaction is targeted to be implemented before the end of the current financial year.”

“We will, therefore, be coming out with a postal ballot to seek the requisite approval of our shareholders.”

“These include approval from the Ministry of Ports, Shipping and Waterways, DIPAM concurrence, and shareholders of CSL.”

“because the NGSV is also after emerging as L1, it has become almost one year almost.”

“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.”

“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;”

“See, the revenue booking, last year, we did a consolidated turnover of INR 5,022 crores.”

“Normally, 36 months for the first one, and six -- and the subsequent vessels, 6 to 8 months.”