Cochin Shipyard's Andaman vessels remain near 55% complete

Cochin Shipyard Limited’s two 1,200-passenger vessels for the Andaman & Nicobar Administration remained unfinished at 54.84% and 55.19% completion on September 30, 2026, after their extended delivery dates expired in 2023 and delivery activity was abated at the buyer’s request. The company is discussing a modified takeover with two government administrations.

Why are Cochin Shipyard's two Andaman vessels stalled?

Cochin Shipyard’s two vessels are stalled because the Andaman & Nicobar Administration asked it to abate delivery activity while seeking to reallocate the ships to prospective buyers. The contracts cover two 1,200-passenger vessels, yard numbers SH.0023 and SH.0024, designed specifically for operations between the Andaman Islands and mainland India. This bespoke design is central to the company’s disclosure that the vessels have no alternative use in their current state.

The extended contractual delivery deadline for SH.0023 expired on April 29, 2023, while the deadline for SH.0024 expired on October 30, 2023. Cochin Shipyard said reallocation would require significant technical modifications and cost. It has therefore described the project as a case where delivery was abated at the buyer’s request, rather than as a completed transfer to a different customer.

How far has Cochin Shipyard completed the vessels?

Cochin Shipyard had completed SH.0023 to 54.84% and SH.0024 to 55.19% as of September 30, 2026. The 0.35-percentage-point difference means both passenger vessels were at broadly the same stage, but neither had advanced to delivery despite the 2023 expiry of their respective extended deadlines.

Revenue recognised on SH.0024 was Rs 171.6187 crore, Rs 2.1555 crore higher than the Rs 169.4632 crore recognised on SH.0023. That revenue was recognised after taking account of liquidated damages, or LD, rather than representing an indication that either vessel has been delivered. The disclosure gives completion, revenue and damages through September 30, 2026, but does not specify a revised delivery date.

What liquidated damages has Cochin Shipyard recognised?

Cochin Shipyard has recognised total liquidated damages of Rs 118.1408 crore for SH.0023 and Rs 97.5634 crore for SH.0024 through September 30, 2026. SH.0023’s recognised damages are therefore Rs 20.5774 crore above SH.0024’s, even though SH.0023 was marginally less complete at the reporting date.

The company said it has not recognised any additional LD beyond April 29, 2023 for SH.0023 or October 30, 2023 for SH.0024. Its stated reason is that the delivery pause followed the buyer’s request and that the contracts with the Andaman & Nicobar Administration remain valid and enforceable. Cochin Shipyard said it had made provisions up to the respective deadlines using prudent estimates under the contracts.

There is no mutual termination or novation of either contract, according to Cochin Shipyard. Novation would replace an existing agreement with a new one, but the company said no such arrangement was in place as of September 30, 2026. It will review accounting estimates and provisioning requirements in later periods as further information becomes available.

Who could take over Cochin Shipyard's unfinished vessels?

Cochin Shipyard is discussing the vessels with the Andaman & Nicobar Administration and the Union Territory of Lakshadweep Administration, or UTLA. Both administrations have confirmed their willingness to take over each vessel in its current under-construction state, subject to the modifications needed to meet their respective requirements.

That willingness is not the same as a disclosed completed transfer, revised contract or delivery timetable. Cochin Shipyard said the ships require significant technical modifications before reallocation because they were customised for Andaman Islands-to-mainland operations. The company remains in discussions with the two administrations, leaving the final buyer, scope of modification and resulting costs unresolved at September 30, 2026.

The potential resolution is therefore tied to changes in the vessels rather than an immediate alternative deployment. Cochin Shipyard’s filing does not quantify modification costs, identify which administration would ultimately take each vessel, or set a target completion percentage beyond the reported 54.84% and 55.19%. Those omissions limit what can be concluded about the eventual financial outcome from the September 2026 disclosure alone.

How does the stalled contract sit within Cochin Shipyard's results?

Cochin Shipyard’s shipbuilding revenue rose to Rs 1,483.1869 crore in the half year ended September 30, 2026 from Rs 1,197.9556 crore in the half year ended September 30, 2025. However, shipbuilding profit before interest and tax, or PBIT, fell to Rs 57.8061 crore from Rs 186.1186 crore over the same periods. The filing does not attribute that change specifically to the two Andaman vessels.

In the quarter ended September 30, 2026, shipbuilding revenue was Rs 783.1442 crore, compared with Rs 758.9823 crore a year earlier, while the segment recorded a PBIT loss of Rs 6.0819 crore against a PBIT profit of Rs 149.7131 crore. Ship repair moved in the opposite direction on quarterly PBIT, reporting Rs 143.3449 crore versus Rs 67.2022 crore a year earlier. These segment figures show that the stalled vessels sit within a much larger shipbuilding operation.

Cochin Shipyard reported consolidated profit after tax of Rs 205.2244 crore for the half year ended September 30, 2026, down from Rs 295.356 crore a year earlier. Its consolidated total equity was Rs 6,070.4591 crore at September 30, 2026, compared with Rs 5,872.7572 crore at March 31, 2026. The company’s disclosure on the passenger vessels focuses on contract status, recognised revenue and LD provisioning rather than providing a separate balance-sheet carrying amount for the two ships.

Conclusion

Cochin Shipyard’s disclosure establishes that two specialised passenger ships remained about 55% complete more than three years after their extended 2023 delivery deadlines. Rs 341.0819 crore of combined revenue had been recognised through September 30, 2026 after Rs 215.7042 crore of combined liquidated damages, while neither project had a disclosed new delivery schedule.

The next point to watch is whether discussions with the Andaman & Nicobar Administration and UTLA produce a formal takeover arrangement and define the modifications required for each vessel. Cochin Shipyard has said it will reassess accounting estimates and provisions in subsequent periods as information develops, so any agreement, revised scope or further provision would be material to the contract’s reported position.