Cochin Shipyard LtdQ2 FY21Industrial Manufacturing

Cochin Shipyard Ltd

Q2 FY21 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Revenue guidance

Category 3

→Cochin Shipyard expects turnover to exceed ₹3500 crore in FY22 and around ₹4000 crore in FY23.
→Aircraft Carrier (IAC) revenues are significant but will gradually phase out; IAC turnover expected around ₹1850 crore in FY22.
→Non-IAC naval shipbuilding projects (ASW Corvette, NGMV) and ship repair contribute remainder; ASW Corvette orders to begin revenue recognition from FY22, NGMV orders expected from FY24.
→The shipbuilding turnover target is approximately ₹2500 crore, including ₹1600-1700 crore from NGMV and ₹800-1000 crore from ASW Corvette.
→Ship repair turnover is expected around ₹750-800 crore, with Cochin and other yards ramping up post-COVID disruptions.
→New order pipelines across Navy and Coast Guard total about ₹4500 crore, with high confidence in winning at least one major order.
→Dredger orders worth about ₹1000 crore represent an emerging business area.
→Infrastructure and workforce expansion at multiple locations (Mumbai, Kolkata, Port Blair) supports growth ambitions.
→Long-term strategic focus includes new technology and electric propulsion solutions under the Shipyard Strategic & Advanced Solutions division.

Category 3

→Continued strong order pipeline, with current order book ~₹12,000 crores and next generation missile vessels (NGMV) ~₹10,000 crores.
→Targeting FY23 revenue around ₹4,000 crores, up from ₹3,500 crores in FY22.
→Shipbuilding margins expected to normalize post-IAC project; IAC had higher-than-normal margins due to its unique scale and phase.
→New orders like ASW Corvette and NGMV expected to contribute from FY22/FY24 onwards, with ASW margins single-digit and NGMV low double-digit margins.
→Ship repair business aims to regain FY20 turnover levels, with consistent margins expected.
→Infrastructure improvements (dry dock, ISRF) and scale-up post-IAC completion intended to support higher annual order execution (₹1,500-2,000 crores).
→Overall profitability may moderate from unusually high FY21 levels due to project phases but expected to maintain stable growth aligned with order book execution.

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→No explicit mention of current or future fundraising through debt or equity in the provided transcript.
→Discussion focuses on CAPEX plans, order book, project execution, and margins.
→CAPEX for FY23 expected around ₹400 crore, with ongoing investments in dry dock and ISRF projects.
→No direct references to new fund raising activities.
→Focus appears on operational execution and completing existing order book rather than equity or debt raising.
→Management mentions risks and opportunities but does not indicate plans for external capital raising.

Yes

→Current order book excluding the Indigenous Aircraft Carrier (IAC) is approximately ₹17,000 - ₹18,000 crores, including ₹10,000 crore for the Next Generation Missile Vessel (NGMV).
→The IAC order book is about ₹4,500 crores, expected to be executed over 2-3 years.
→IAC margins are higher but considered a one-off project, with other shipbuilding orders delivering lower but stable margins.
→NGMV orders involve 6 vessels with an execution period spanning 9 years (48 months for first vessel, then one per year).
→ASW Corvette order execution spans about 6 years.
→There is a significant pipeline including 3 Navy/Coast Guard tenders totaling around ₹4,500 crores in advanced stages.
→Additional expected orders include a potential dredger order worth around ₹1,000 crores.
→Management aims to continuously replenish the order book over time to maintain yard utilization and revenue stability.

Yes

→Current CAPEX for FY23 is targeted around ₹400 crore.
→Total CAPEX spent till now on dry dock and International Ship Repair Facility (ISRF) is about ₹1240 crore.
→Expected CAPEX spend this year (current year) on dry dock and ISRF is ₹330 crore.
→New dry dock at Hooghly and ISRF projects are underway but faced delays due to labor issues and contractor difficulties.
→Kolkata (Hugly Cochin Shipyard Ltd) and Malpe (Tebma Shipyards) facilities are being refurbished and expected to start work soon.
→Expansion includes seven functional units across Kochi, Mumbai, Kolkata, Port Blair, and Malpe with increased staffing.
→Formation of a new division "Shipyard Strategic and Advanced Solutions" focusing on electric mobility, fuel cells, hydrogen, solar powered vessels, and defense tech as a strategic long-term investment.
→Plans for ramping up operations in ship repair and shipbuilding, including a strong pipeline of naval and dredger orders (₹1000 crore dredger opportunity).

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