Cochin Shipyard Ltd

Q2 FY25 Earnings Call Analysis

Management growth scorecard

Fundraise

N/A

Capex

Yes

Revenue

Category 3

Margin

Category 4

Order

N/A

1 of 3 growth signals are positive — mixed outlook.

Fundraise plans

→There is no explicit mention of new fundraising activities through debt or equity in the current call transcript.
→Shri Madhu S Nair discussed the Maritime Development Fund (MDF), a government-backed financial pool designed to support the maritime industry, including shipbuilding and shipping.
→MDF funding could include equity or loan components at affordable rates but is not a grant or free money.
→The company is considering leveraging MDF for long-term investments, but exact figures or commitments have not been disclosed.
→For the recently completed CAPEX cycle (~Rs. 3,250 crores), no immediate need for further CAPEX is mentioned until around 2030-31 when additional investments might be needed to more than double turnover.
→Joint ventures with HD KSOE and Drydocks World might require future CAPEX, but details and commitments are currently not specified.

Yes

→Completed a Rs.3,250 crore CAPEX cycle over the last seven years across Cochin Shipyard facilities and subsidiaries.
→Expect no significant additional CAPEX in the near term to double revenue by 2030-31, leveraging existing facilities.
→Future CAPEX planned beyond 2030-31 to cross Rs.10,000-12,000 crore turnover threshold.
→Potential CAPEX for new workstation facilities in collaboration with HD KSOE; details not finalized.
→Drydocks World JV currently requires no further CAPEX; additional investment possible with business expansion.
→Maritime Development Fund (up to Rs.70,000 crore) may provide affordable equity/debt funding for long-term investments.
→Continuous investment in digital tools, modern systems, and skilling for workforce capacity and capability development.
→Strategic partnerships (HD KSOE, Drydocks World, Maersk) indicate long-term growth and potential capital deployment.

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Category 3

→Cochin Shipyard projects top-line growth of 14% to 15% for FY26.
→The company generally guides 10% to 12% annual growth, considering industry cyclicality.
→Aiming to double turnover around 2030-31, leveraging existing and new facilities.
→Current CAPEX cycle (~Rs.3,250 crores) supports doubling turnover by 2030-31 without substantial new CAPEX.
→Beyond 2030-31, additional CAPEX will be invested for growth crossing Rs.10,000-12,000 crores revenue.
→Long-term plans align with Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047, targeting sustained growth.
→Export business, especially specialist vessels and merchant ships, is a key pillar of long-term growth strategy.
→New facilities such as the International Ship Repair Facility (ISRF) expected to generate increased revenues (~Rs.600 crores full potential).

Category 4

→Cochin Shipyard guides for overall EBITDA margin around 20% for FY26, lower than FY24's ~24%, mainly due to absence of large aircraft carrier projects.
→PAT margin guidance is around 15% for FY26.
→Top-line revenue growth expected at 14%-15% for FY26, with a general long-term industry growth outlook of 10%-12% annually over 5-10 years.
→Ship repair revenue projected at about Rs.1,500 crores in FY26, lower than previous year’s one-off aircraft carrier repair impact.
→Long-term vision includes doubling turnover by 2030-31, leveraging existing facilities and completed Rs.3,250 crores CAPEX cycle, with further CAPEX planned post-2030 for expansion beyond Rs.10,000 crores turnover.
→The company expects steady growth driven by defense orders, ship repair, and export focus, with cyclical industry considerations.
→Digital and modular shipyard advancements, as well as strategic partnerships, are part of growth plans enhancing competitiveness and margins.

→Current order book stands at approximately Rs. 21,100 crores.
→This includes about Rs. 1,500 crores from ship repair orders.
→Shipbuilding order book is around Rs. 19,600 crores comprising 75 vessels across Kochi facility, Udupi CSL, and Hooghly CSL.
→Of these 75 vessels:
→ - 25 are in design and early construction stage,
→ - 37 are under fabrication and assembly (mid-stage),
→ - 13 vessels have been launched and are in advanced completion stages.
→Defense order book is Rs. 13,700 crores covering 14 vessels in two main projects:
→ - ASW Corvette project (Rs. 3,700 crores),
→ - Next Generation Missile Vessels project (6 ships).
→Defense order pipeline totals nearly Rs. 2.2 lakh crores with various projects at bid, RFP, and RFI stages.
→Two major bids worth Rs. 10,000 crores submitted:
→ - Next Generation Fast Patrol Vessels (18 ships for Coast Guard),
→ - Next Generation Survey Vessels for Indian Navy.

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