Shipping Corporation of India FY 2025-26: Record profits, tanker strength, and a fleet renewal push

The Shipping Corporation of India (SCI) closed FY 2025-26 with its strongest profitability in recent years, supported by a robust tanker market and disciplined balance sheet management. On a standalone basis, operating revenue rose to INR 5,778 crore (from INR 5,592 crore in FY 2024-25). EBITDA increased to INR 2,633 crore (from INR 1,960 crore), and PAT climbed to INR 1,326 crore (from INR 814 crore). Consolidated PAT was INR 1,353 crore, broadly tracking standalone performance.

Management attributed the year’s outperformance primarily to the tanker segment, while acknowledging that late-year geopolitical disruption in the Middle East created operational constraints, including vessels stuck in the Strait of Hormuz, which affected voyage completion and the timing of revenue recognition.

FY 2025-26 in numbers: profitability surge with conservative leverage

SCI’s profitability expansion was visible across key metrics. Standalone PBT rose to INR 1,396 crore (from INR 822 crore), and return ratios improved meaningfully, with ROE at 16.34% and ROCE at 14.31% for FY 2025-26.

The company also highlighted balance sheet strength on the concall, disclosing net worth of INR 8,489 crore, cash and liquid investments of INR 2,676 crore, and long-term debt of INR 2,409 crore. Debt-equity stood at 0.29 and DSCR at 4.61, suggesting meaningful headroom for fleet expansion without aggressive leverage.

Dividend payout also rose. The presentation shows dividend of INR 349.34 crore for FY 2025-26, and management stated a total dividend of 75%, quantified as INR 7.5 per share.

Segment performance: tanker dominance, bulk drag, liner split between coastal strength and EXIM weakness

SCI’s FY 2025-26 segment mix reinforces its dependence on tankers for earnings, even as management positions coastal containers and offshore as medium-term growth vectors.

The tanker segment delivered operating revenue of INR 3,942 crore in FY 2025-26 (up from INR 3,610 crore), while segment PBIT jumped to INR 1,190 crore from INR 680 crore. Management described the tanker environment in Q4 as highly volatile due to the Middle East conflict, with elevated rates but disrupted transit through the Strait of Hormuz and fewer available cargoes.

Bulk improved in revenue terms, rising to INR 789 crore from INR 711 crore, but remained loss-making at the segment PBIT level at negative INR 19 crore. Management cited better deployment and higher voyage charters as contributors to improvement.

The liner segment recorded a decline in operating revenue to INR 784 crore from INR 1,036 crore. Segment PBIT reduced to INR 75 crore from INR 166 crore. The presentation and concall both split the narrative into two sub-themes: strong coastal execution and weaker EXIM freight markets.

On coastal trade, SCI reported a 10% YoY increase in coastal freight rates, 99.2% ship availability, and 99% utilization. For EXIM, the company said revenue and profitability declined due to soft freight markets and the absence of a traditional peak season. Even so, SCI stated service utilization remained at 95%.

Technical and Offshore Services (T&OS) remained comparatively small but stable, with revenue of INR 298 crore and segment PBIT of INR 35 crore.

Operating context: volatile freight markets and Strait of Hormuz disruption

SCI’s Q4 discussion focused heavily on the Middle East conflict and its second-order effects on shipping routes, vessel deployment, and the recognition of earnings.

For crude tankers, the presentation shows sharp quarter-end strength across dirty tanker indices. Management stated VLCC earnings on key routes in Jan-Feb were in the range of about USD 80,000 to USD 150,000 per day, and that rates rose significantly after the conflict began. However, SCI also noted that Strait of Hormuz transits were disrupted for over a month in the presentation and “more than two months” on the concall, with fewer cargoes and intense owner competition for available fixtures.

The operational consequence for SCI was direct. In response to questions on why tanker performance did not spike quarter-on-quarter, management explained that some vessels were stuck inside the Persian Gulf and could not transit, limiting the ability to capture peak rates. They also clarified that revenue for unfinished voyages is recognized proportionately based on voyage completion, with the remaining revenue to be recognized after voyage completion, potentially in the next financial year.

On bulk, SCI’s presentation highlighted that BDI levels for Jan-March 2026 were higher than seasonal patterns, supported by strong fundamentals and temporary supply shortages due to ships being stuck in the Strait of Hormuz. On liner, management stated it maintained 100% continuity on the India-Europe service by rerouting via the Cape of Good Hope to avoid Red Sea risks.

Fleet, renewal agenda, and strategic MoUs

SCI ended FY 2025-26 with 58 owned vessels and management of an additional 40 vessels for government organizations. The average age of the owned fleet was stated as 15.5 years, which increases the urgency of renewal.

The company has already executed select actions. SCI inducted two Very Large Gas Carriers, Sahyadri and Shivalik, each with around 82,000 cubic metres LPG capacity, intended for deployment on the Persian Gulf to India route.

On the energy transition theme, SCI executed a shipbuilding contract with Mazagon Dock Shipbuilders Ltd on 18 March 2026 for one 3,000 DWT methanol dual fuel diesel-electric Platform Supply Vessel. Management positioned this as the first SCI vessel planned to operate on alternate fuel green methanol under the National Green Hydrogen Mission.

In addition, SCI disclosed ongoing tenders for newbuild acquisition: 4 MR tankers, 6 container vessels of 1,700 TEU, and 4 Aframax tankers. In Q&A, management acknowledged that tanker market conditions were abnormal and that asset prices could be elevated, signalling caution against rushing procurement at peak-cycle pricing.

Strategic collaboration is another pillar of the plan. SCI signed an MoU on 19 September 2025 with BPCL, HPCL/ONGC, and IOCL to jointly acquire and operate vessels for petroleum and hydrocarbon cargoes. Another MoU was signed on 3 February 2026 with CONCOR and major ports, alongside Sagarmala Finance Corporation, to acquire, own, lease and operate container vessels and related assets for EXIM and coastal trade, with the stated objective of delivering end-to-end logistics solutions.

On the concall, management discussed a proposed Bharat Container Shipping Line concept, stating that the Indian container fleet is currently negligible. They also spoke about linking charter arrangements to global indices with floor and ceiling limits, and repeatedly referenced an IRR target of about 10% to 12% for vessel acquisition projects, with the Board generally not considering projects below 10% unless strategically necessary.

Takeaways

SCI’s FY 2025-26 results reflect a year where market strength in tankers combined with financial discipline to deliver a step-up in profitability and returns. The company’s disclosures also show clear segment divergence: tanker profitability remains the anchor, liner is resilient in coastal but challenged in EXIM, bulk is improving but still loss-making at the PBIT line, and offshore is positioned as a demand-driven opportunity.

The next phase for SCI appears centred on fleet renewal and expansion, supported by MoUs with CPSEs and ports, selective newbuild and second-hand additions, and a stated focus on return thresholds for capital deployment. At the same time, management’s commentary underlined the operational reality of shipping: geopolitical risk can distort both utilization and the timing of earnings, even in a strong freight environment.