Cochin Shipyard LtdQ2 FY20Industrial Manufacturing

Cochin Shipyard Ltd

Q2 FY20 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Revenue guidance

Category 3

→Ship repair business is expected to grow at 20-25% CAGR for the next 3 years, reaching Rs. 1000-1200 crore turnover.
→Beyond 3 years, ship repair growth is expected to sustain around 12-15% CAGR over a decade, potentially reaching Rs. 2500 crore by 2030.
→Overall ship repair turnover guidance for FY21 is Rs. 500-550 crore.
→The company targets at least flat to near last year's revenue for FY21 due to COVID disruptions, deviating from earlier ~12% growth guidance.
→Order book currently provides visibility for about 3 years, with efforts ongoing to secure bigger orders to extend visibility.
→Export shipbuilding segment is being focused on, especially with technological innovations like autonomous vessels, aiming for growth in international business.
→New dry dock capacity aims to attract larger international commercial vessels for ship repair, expanding business prospects.

Category 3

→Ship repair business expected to grow at 20-25% annually over next 3 years, reaching Rs. 1000-1200 crore turnover (Jose V J).
→Beyond 3 years, growth in ship repair anticipated around 12-15% compound annual growth rate over a decade (Jose V J, Rajesh Gopalakrishnan).
→EBITDA margin expected to steady around 25%, with some quarters possibly near 19%-21% due to pandemic impacts (Jose V J).
→Ship repair EBITDA margin expected to sustain around 25% long term (Jose V J).
→Overall revenue growth targeted 12% annually, but FY21 may see flat or no growth due to COVID-19 disruptions (Jose V J).
→Increase in international ship repair and export focus planned, possibly slightly lower margins but faster turnarounds (Rajesh Gopalakrishnan).
→Post-COVID ramp-up and operational improvements expected to help sustain last year’s earnings levels (Rajesh Gopalakrishnan).

Get access to all 5 sections — revenue, margin, fundraise, orderbook, and capex — for Cochin Shipyard Ltd and 1,400+ other companies.

→No explicit mention of any new fundraising through debt or equity in the provided transcript.
→The company has a total cash position of Rs.1950 crore as of June 30.
→Out of this, Rs.118 crore came from IPO proceeds, and Rs.1100 crore of own funds are earmarked for two CAPEX projects.
→The company has revised its CAPEX downwards from Rs.600 crore to Rs.290 crore due to COVID-19 but plans to fund this internally.
→There are no indications of further equity or debt raising plans discussed during the call.
→Liquidity and working capital appear manageable with collections from Navy recently starting, reducing any immediate need for external fundraising.

→Current order book value: Approximately Rs. 14,000 crore, sufficient for around three years of work.
→ASW (Anti-Submarine Warfare) backlog: Rs. 6,311 crore.
→Indian Navy order backlog: Around Rs. 12,500 crore.
→Revenue recognition from ASW backlog expected to start from Q3 FY21; Rs. 150 crore expected this year, around Rs. 1000 crore per year for next three years.
→Navy orders typically yield Rs. 2,000 - 3,000 crore revenue annually over next three years.
→IAC (Indigenous Aircraft Carrier) order: Rs. 6,000 crore total; Rs. 4,000 crore booked during pre-delivery phase and Rs. 2,000 - 2,500 crore post-delivery.
→Shipbuilding backlog split: Cost plus Rs. 3,800 crore; fixed price Rs. 2,470 crore.
→The company actively bidding for new projects worth about Rs. 10,000 crore.
→Focus on adding large orders for future visibility beyond the existing 3-4 year order book horizon.

Yes

→Current CAPEX guidance is about Rs. 290 crore for the year, revised down from Rs. 600 crore due to COVID-19 related delays and labor issues.
→Major CAPEX projects include the Integrated Ship Repair Facility (ISRF) and a new Dry Dock (300 meters) aimed at expanding ship repair capacity and attracting large international commercial vessels.
→CAPEX progress has been slow due to migrant labor shortages, local curfews, and supply chain issues.
→The company is restructuring and upgrading Tebma Shipyard after acquiring it, with plans to start operations and revenue generation 4-5 months post takeover (expected by mid to end September).
→Strategic focus includes increasing indigenous procurement (working with BEL) to mitigate forex risks and align with Atmanirbhar Bharat policy.
→The new Dry Dock and enhanced repair facilities aim to tap into international markets, especially targeting commercial vessels passing India.

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