Cochin Shipyard: Scaling capacity while margins normalize

The presentation states shipbuilding order book of about INR 21,900 crores, with balance amount to be recognised shown as INR 20,700 crores across 78 vessels. The segment split shown is defence INR 11,900 crores (54 percent), commercial export INR 7,200 crores (33 percent), commercial domestic INR 1,600 crores (7 percent), and another bucket of INR 1,200 crores (6 percent).

The presentation states ship repair orders of about INR 1,200 crores and FY26 ship repair turnover of about INR 1,656 crores, with 163 projects handled in FY26.

Management stated the joint venture is proposed at 50:50 equity, with Drydocks World Dubai having operational control and 3 of 5 board seats. ISRF is proposed to be transferred on a slump sale basis for INR 1,800 crores, with CSL receiving INR 900 crores in cash and INR 900 crores as equity, subject to multiple approvals and targeted before financial year end.

The presentation indicates total capex of INR 1,570 crores (INR 650 crores civil infra by port and INR 920 crores floating dry docks and equipment by CSL). Management said the project is pending environmental clearance and would be operationalised within 36 months after clearance.

Management stated they typically guide around 12 percent revenue growth per year and may end up around 12 to 15 percent. They also said shipbuilding margins are around 10 to 12 percent, ship repair margins around 22 to 24 percent, leading to a conservative blended EBITDA margin around 14 to 15 percent.

Management attributed negative operating cash flow mainly to tail-ended export contract payment terms, where a large portion of payments is received on delivery. They said cash flow should become positive in FY27 as more vessels are delivered and delivery-linked receipts are realized.