In This Article:
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Order Book: INR24,221.37 crores as of 30th September 2024.
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Revenue from Operations: Increased from INR898 crores to INR1,153 crores, a growth of 28% year-on-year.
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Total Income: Increased from INR969 crores to INR1,228 crores, a growth of 27% year-on-year.
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EBITDA: Increased from INR120 crores to INR145 crores, a growth of 19% year-on-year.
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Profit After Tax: Increased from INR81 crores to INR98 crores, a growth of 21% year-on-year.
Release Date: November 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Garden Reach Shipbuilders & Engineers Ltd (BOM:542011) reported a significant increase in revenue from operations, growing by 28% year-on-year from INR898 crores to INR1,153 crores.
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The company's order book is robust, standing at INR24,221.37 crores, comprising 12 projects with 43 platforms, including four export projects.
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The company has successfully delivered two ships under the Survey Vessel (Large) project and is on track to deliver the remaining ships by mid-next year.
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Garden Reach Shipbuilders & Engineers Ltd (BOM:542011) is actively pursuing green energy initiatives, having developed a fully electric ferry for the government of West Bengal.
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The company has expanded its shipbuilding capacity from 20 to 24 concurrent platforms, preparing for future demand and orders.
Negative Points
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The cost of materials has increased significantly, impacting gross margins due to the maturity stage of ongoing projects.
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The company's trade receivable turnover ratio has decreased from 39.48 to 19.64, indicating potential delays in receivables.
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There are concerns about execution challenges due to social unrest in Bangladesh, where the company is working on several projects.
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The gross margin has declined to below 30%, a level not seen in many quarters, raising concerns about profitability.
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The company faces potential budget constraints from the Indian Navy due to other large defense procurements like drones and Rafale jets.
Q & A Highlights
Q: Why has the cost of materials gone up so high this quarter? A: The increase in material costs is due to the project maturity phase. As projects mature, material costs naturally rise, which is typical in a shipbuilding cycle. Initially, material input is low, but as projects progress to 40%-60% completion, material input and costs increase.
Q: What is the current utilization rate of dockyards, and which countries are importing the most from you? A: Our dry docks and building berths are currently at about 70% utilization. European nations, such as Germany and the Netherlands, are increasingly looking to India for commercial shipbuilding, and we have orders for multipurpose vessels from these regions.