Cochin Shipyard Feb-24
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Questions and Answers

What was the segmental margin level for ship repair mentioned in the discussion?

  • 19%-20%
  • 13%-14%
  • 18%-19% (correct)
  • 16%-17%

What improvement in margin percentage was discussed compared to the previous quarter?

  • 300 basis points
  • 200 basis points (correct)
  • 100 basis points
  • 50 basis points

What factor was mentioned as contributing to the improved margins this quarter?

  • Aircraft carrier projects (correct)
  • Launch of new vessels
  • Increased labor costs
  • Expansion to international markets

What blended margin percentage was indicated before the current discussions?

<p>16%-17% (A)</p> Signup and view all the answers

What is the long-term steady-state margin guidance mentioned for shipbuilding?

<p>13%-14% (B)</p> Signup and view all the answers

What period did the 19% margin guidance refer to?

<p>Post aircraft carrier period (B)</p> Signup and view all the answers

Who posed the question regarding the change in margin guidance?

<p>Deepak Krishnan (B)</p> Signup and view all the answers

What was the primary concern discussed regarding the margin levels?

<p>Factors influencing long-term guidance (C)</p> Signup and view all the answers

What was the previous rating of Cochin Shipyard Limited before upgrading to GreenCo Gold?

<p>GreenCo Silver (C)</p> Signup and view all the answers

What was the turnover for Cochin Shipyard Limited in the third quarter of FY '24?

<p>INR 1,021.45 crores (B)</p> Signup and view all the answers

What was the growth rate of profit before tax for the third quarter of FY '24?

<p>129% (C)</p> Signup and view all the answers

How much was the profit after tax for Cochin Shipyard Limited in the third quarter of FY '24?

<p>INR 248 crores (B)</p> Signup and view all the answers

What was the year-to-date profit before tax for FY '24 as mentioned?

<p>INR 748 crores (D)</p> Signup and view all the answers

By how much did the total turnover increase in FY '24 compared to the previous year's turnover?

<p>38% (A)</p> Signup and view all the answers

What was the profit after tax in Q3 of FY '23 for comparison?

<p>INR 118 crores (B)</p> Signup and view all the answers

In terms of financial performance, what aspect showed marked improvement during FY '24 year-to-date?

<p>Turnover and profitability (D)</p> Signup and view all the answers

What primary strength does the organization highlight regarding its position in Europe?

<p>Depth of engineering expertise (A)</p> Signup and view all the answers

What is the average age of the European fleet mentioned?

<p>20 years (B)</p> Signup and view all the answers

What type of vessels are primarily needed to replace the old European fleet?

<p>Green or hybrid vessels (B)</p> Signup and view all the answers

What emerging market is mentioned as a key focus for the organization?

<p>Wind energy market (D)</p> Signup and view all the answers

When is the demand for service and support vessels in the wind energy market expected to peak?

<p>2027 (A)</p> Signup and view all the answers

What is one crucial trend influencing the replacement of vessels in Europe?

<p>Regulatory requirements for emissions (D)</p> Signup and view all the answers

Which type of vessels are considered old and in need of replacement?

<p>Short sea multiplex vessels (D)</p> Signup and view all the answers

What type of demand is associated with the European short sea vessels?

<p>Replacement demand for old vessels (C)</p> Signup and view all the answers

What was the total debt of the company after redeeming its tax-free infrastructure bonds?

<p>INR23 crores (B)</p> Signup and view all the answers

What was the EBITDA margin achieved by the company during the 9-month period ended December '24?

<p>34 percentage (A)</p> Signup and view all the answers

What was the total payout to shareholders from the two declared interim dividends?

<p>INR197 crores (B)</p> Signup and view all the answers

As of January 10, 2024, what was the face value of each equity share after the split?

<p>INR5 each (A)</p> Signup and view all the answers

How many vessels are being constructed for the ASW-SWC Corvettes project for the Indian Navy?

<p>8 vessels (A)</p> Signup and view all the answers

What is the total cost for the ASW-SWC Corvettes project?

<p>INR6,300 crores (D)</p> Signup and view all the answers

How many Hybrid Electric Catamaran Hull vessels have been contracted for Kochi Water Metro?

<p>23 vessels (B)</p> Signup and view all the answers

What was the PAT margin achieved by the company during the same 9-month period?

<p>23 percentage (B)</p> Signup and view all the answers

What is the total export order mentioned in the context?

<p>INR2,688 crores (A)</p> Signup and view all the answers

What is the expected EBITDA margin after IAC?

<p>19% to 20% (C)</p> Signup and view all the answers

What is the order book amount for ship repair?

<p>INR800 plus crores (B)</p> Signup and view all the answers

Why did Madhu S Nair choose not to discuss project specifics?

<p>Complexity involved in different businesses (D)</p> Signup and view all the answers

What is the total order book mentioned for subsidiaries?

<p>INR700 crores (B)</p> Signup and view all the answers

What does the acronym RFP stand for in the context of defense projects?

<p>Request for Proposal (A)</p> Signup and view all the answers

What is the RFP amount issued for defense projects mentioned in the conversation?

<p>INR1,600 crores (D)</p> Signup and view all the answers

For which specific project was no comment made regarding order inflow?

<p>INS Vishal (A)</p> Signup and view all the answers

What type of wind energy is anticipated to dominate the energy transition in Europe?

<p>Offshore wind energy (B)</p> Signup and view all the answers

How much power does each offshore wind tower typically generate?

<p>10 megawatts (C)</p> Signup and view all the answers

What is the projected offshore wind power target for the U.K.?

<p>25 gigawatts (B)</p> Signup and view all the answers

What type of contracts are primarily included in ship repair revenue projections?

<p>Medium refit orders (C)</p> Signup and view all the answers

What is the anticipated ship repair turnover for the next year or two?

<p>INR 1,200 crores (A)</p> Signup and view all the answers

What is the estimated target for ship repair business in approximately three years?

<p>INR 1,500 crores (D)</p> Signup and view all the answers

What is needed for the maintenance and support of offshore windmills?

<p>A variety of specialized ships (B)</p> Signup and view all the answers

What does Madhu S Nair suggest is necessary for continued business growth?

<p>Increased ship repair turnover (B)</p> Signup and view all the answers

Flashcards

GreenCo Certification

Cochin Shipyard Ltd. (CSL) achieved a significant milestone by being upgraded from GreenCo Silver to GreenCo Gold, a recognition of its commitment to environmental sustainability. This achievement establishes CSL as a leading green shipbuilding and repair yard in India.

CSL's Q3 FY'24 Financial Performance

CSL's financial performance in the third quarter of fiscal year 2024 (FY'24) demonstrated substantial growth, showcasing a significant increase in turnover and profitability.

CSL Q3 FY'24 Turnover Growth

From INR631 crores in Q3 of FY '23, CSL's turnover in Q3 of FY '24 reached INR1,021.45 crores, displaying a growth rate of 62%.

CSL Q3 FY'24 Profit Before Tax Growth

CSL's profit before tax in Q3 of FY '24 amounted to INR345 crores, a notable increase from INR151 crores in Q3 of FY '23, depicting a growth rate of 129%.

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CSL Q3 FY'24 Profit After Tax Growth

CSL's profit after tax in Q3 of FY'24 reached INR248 crores, indicating a substantial increase from INR118 crores in Q3 of FY '23, showing a growth rate of 109%.

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CSL YTD FY'24 Financial Performance

CSL's year-to-date (YTD) financial performance in FY'24 showcased significant growth in both turnover and profitability.

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CSL YTD FY'24 Turnover Growth

CSL's YTD turnover in FY'24 reached INR2,420 crores, representing a 38% increase compared to FY '23's YTD turnover of INR1,753 crores.

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CSL YTD FY'24 Profit Before Tax Growth

CSL's YTD profit before tax in FY'24 amounted to INR748 crores, showing a remarkable improvement from FY '23's YTD profit before tax of INR390 crores, reflecting a 92% growth rate.

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Stock Split

The process of dividing a company's existing shares into a larger number of shares with a lower face value, making them more affordable and accessible for investors.

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Income Dividend

A type of dividend paid to shareholders from the company's profits after all expenses have been deducted.

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EBITDA

Earnings before interest, taxes, depreciation, and amortization. A key financial metric measuring a company's profitability from its core operations.

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Profit After Tax (PAT) Margin

The percentage of earnings remaining after all expenses, including taxes, are paid, indicating the company's efficiency and profit generation.

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Tax-Free Infrastructure Bonds

Long-term debt instruments issued by companies to raise capital, usually with fixed interest rates and maturity dates. These bonds can be tax-free, meaning that the interest earned is not subject to income tax.

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Debt-to-Asset Ratio

A measure of a company's financial health that refers to the amount of debt a company carries relative to its assets. A lower debt-to-asset ratio indicates better financial stability.

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ASW-SWC Corvettes

A type of vessel designed for anti-submarine warfare and surface warfare operations.

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Hybrid Electric Catamaran Hull Vessels

A type of vessel that uses a combination of electric and diesel engines to power its propulsion system, often used in water transportation.

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GreenCo Gold Certification

Cochin Shipyard Ltd. (CSL) has achieved a significant milestone by being upgraded from GreenCo Silver to GreenCo Gold, a recognition of its commitment to environmental sustainability. This achievement establishes CSL as a leading green shipbuilding and repair yard in India.

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Cochin Shipyard Ltd. (CSL)

Cochin Shipyard Ltd. (CSL) is a leading shipbuilding and ship repair company in India. It plays a crucial role in the nation's maritime sector.

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CSL's Total Order Book

Cochin Shipyard Limited (CSL) has a total order book of approximately INR21,500 crores. This includes INR2,688 crores from export orders, INR700 crores from subsidiaries, and INR800+ crores from ship repairs.

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CSL's EBITDA Margin

CSL's current EBITDA margin is around 20%, but this may not be sustainable in the long term. After the upcoming IAC (Annual Investors Conference), the estimated EBITDA margin is around 19-20% excluding other income.

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ASW EBITDA Margin

The EBITDA margin for CSL's ASW (After Sales Warranties) business is also expected to be in the range of 19-20%. This refers to the profit generated from repairs and maintenance services provided to vessels post delivery.

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INS Vishal Project Update

CSL is currently not ready to comment on the progress of the INS Vishal project. This is a major Indian naval project and any updates might be sensitive.

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CSL's New Order Inflow

CSL is actively seeking new orders and is currently awaiting responses to an RFP (Request for Proposal) worth INR1,600 crores for defense projects. Additionally, they are exploring other project opportunities, but details are not yet available.

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CSL's Diverse Business Operations

CSL operates different businesses, including shipbuilding, ship repair, commercial, and defense sectors. This makes it difficult to discuss specific project details as project costs and profit margins vary significantly.

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What are the main drivers of ship demand in Europe?

The demand for ships in Europe is driven by two main factors: the need to replace aging vessels in the short sea shipping market and the growing wind energy sector.

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Why is there a demand for replacement vessels in European short sea shipping?

Ships used for short sea transport within Europe are getting old, with an average age approaching 20 years. This necessitates replacements with more modern and environmentally friendly vessels, leading to a demand for newer technology and greener ships.

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How does the wind energy market impact ship demand in Europe?

The increasing popularity of wind energy in Europe is driving a demand for specialized ships that support and service offshore wind farms.

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When is the peak demand for wind energy-related ships anticipated?

The demand for ships supporting wind energy projects is expected to significantly increase after 2027, as the industry expands and investments in this sector ramp up.

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Why is Cochin Shipyard focusing on the European market?

Cochin Shipyard is strategically focusing on the European market, recognizing its strength in delivering quality products, engineering expertise, strong client relationships, and brand visibility.

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Why is Cochin Shipyard not currently exploring other markets despite their awareness?

Cochin Shipyard believes the European market, with its strong demand for ships, offers a promising opportunity for growth, outweighing other potential geographic options.

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What is Cochin Shipyard's outlook for the European market?

Cochin Shipyard is confidently positioned to capitalize on the European market, leveraging its expertise and existing relationships to secure contracts for new ships.

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What are the two main types of demand for new ships in the European market?

The demand for new ships in the European market is driven by both the replacement of older vessels in cargo shipping and the emergence of the wind energy sector.

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Offshore Wind Maintenance

The practice of maintaining and supporting wind power systems and equipment in offshore environments.

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Support Ships

Specialized vessels designed to service and repair offshore wind turbines.

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Ship Repair Market Size

The potential revenue from ship repair and refit contracts related to offshore wind energy.

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Ship Refits

The process of upgrading and repairing ships, particularly for extended life or improved capabilities.

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Ship Repair Revenue Potential

The expected revenue from ship repair and refit contracts related to offshore wind energy.

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Cochin Shipyard's (CSL) Ship Repair Capability

The company's ability to provide ship repair services to meet the increasing demand from the offshore wind industry.

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Top Line Revenue

The revenue from the ship repair and refit contracts.

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Business Stability

Maintaining a strong financial performance even in the face of fluctuating market conditions.

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Study Notes

Cochin Shipyard Limited Q3 FY'24 Results Conference Call

  • Date: February 08, 2024
  • Management: Madhu S Nair (Chairman & Managing Director), Jose V J (Director Finance), Rajesh Gopalakrishnan (Chief General Manager, Ship Repair), Harikrishnan S (Chief General Manager, Shipbuilding), Shibu John, Syamkamal N (Company Secretary)
  • Moderator: Ms. Chandni Chande (Kirin Advisors)
  • Key Financial Highlights (Q3 FY'24):
    • Turnover: INR 1,021.45 crore (62% increase YoY)
    • Profit Before Tax: INR 345 crore (129% increase YoY)
    • Profit After Tax: INR 248 crore (109% increase YoY)
    • Year-to-date turnover: INR 2,420 crore (38% increase YoY)
    • Year-to-date profit before tax (PBT): INR 748 crore (92% increase YoY)
    • Year-to-date profit after tax (PAT): INR 548 crore (91% increase YoY)
  • Major Defence Projects:
    • INS Vikrant (Indigenous Aircraft Carrier) commissioned in September 2022.
    • ASW SWC (Anti-Submarine Warfare Corvettes) for the Indian Navy (INR 6,300 crore estimated value)
    • 3 Multi-Purpose Vessels launched (3 consecutive launches in November 2023)
    • 2 additional vessels (4 & 5 in the series) had keel laid (in December 2023)
  • Other Projects:
    • 8 Hybrid Electric Catamarans for Cochin Water Metro (delivered in Jan)
  • Financial Highlights:
    • Management highlighted the achievement of the Gold rating from CII GreenCo.
    • The company had redeemed INR 100 crore tax-free infrastructure bonds in Dec 2023.
  • Order Book: Total order book of INR 21,500 crore (INR 800 plus crore in ship repair).
  • Future Outlook:
    • Targeted ₹1,200 crore to ₹1,500 crore ship repair business in the next few years.
    • Aiming to increase capacity by 15% in the following year and to exceed the ₹ 3,000 crore turnover mark.
    • Additional RFPs (Requests For Proposals) expected in 2024 for defense projects (INR 1,600 crore)

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Cochin Shipyard Limited Q3 FY'24 Results Conference Call PDF

Description

Test your knowledge on the financial performance of Cochin Shipyard Limited for the third quarter of FY '24. This quiz covers key metrics such as margin levels, profit figures, and growth rates discussed in recent financial analyses. Understand the factors contributing to the shipyard's performance and its rating upgrades.

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