Garden Reach Shipbuilders & Engineers : Transcript of Analysts/Institutional Investor Meet/Con. Call

Garden Reach Shipbuilders & Engineers Limited

Q2 & H1 FY 2023 Earnings Conference Call

November 15, 2022

Management:

• Cmde Hari P.R, IN (Retired), Chairman & Managing Director
• Shri R K Dash, Director (Finance) & CFO
• Smt. Aparajita Ghosh, Additional General Manager (Finance)
• Shri Sandeep Mahapatra, Company Secretary & Compliance Officer

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GRSE | Con Call | Q2 & HY1 FY23 | Transcript

Garden Reach Shipbuilders & Engineers Limited

Q2 and H1 FY '23 Earnings Conference Call

November 15, 2022

Moderator: Good afternoon, ladies and gentlemen. I am Yashashri, the moderator for this conference. Welcome to the Conference Call of Garden Reach Shipbuilders & Engineers Limited arranged by Concept Investor Relations to discuss its Second Quarter and Half Year ended 30th September, 2022 Results.

We have with us today Cmde P R Hari, IN (Retd.), Chairman & Managing Director and Shri R K Dash, Director (Finance) and CFO.

At this moment all participants are in listen‐only mode. Later we will conduct a question & answer session. At that time if you have a question, please press '*' and '1' on your telephone keypad. Please note this conference is recorded.

I would now like to handover the floor to Cmde P R Hari, Chairman & Managing Director. Thank you and over to you.

Cmde P R Hari: Thank you, Yashashri. Ladies and gentlemen, a very good afternoon to each one of you. I am Cmde P R Hari, the Chairman & Managing Director of Garden Reach Shipbuilders & Engineers Limited. I have here with me Shri Ramesh Kumar Dash, the Director (Finance) and CFO; Mrs. Aparajita Ghosh, AGM (Finance); and Shri Sandeep Mahapatra, the Company Secretary. Let me welcome you all to this conference call to discuss the financial performance of the company for the second quarter and half year ended 30th September, 2022.

I intend covering my talk under the following heads, that is, the financial, the order book, the execution plan for the current order book, and a brief glimpse on the future outlook of the Company.

The financial performance for the half year ended 30th September, 2022 have been very encouraging with the revenue from operation moving up from `726 crore to `1,262 crore, is an increase by 74% , if one is comparing the half yearly performance of FY22 to FY23.

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GRSE | Con Call | Q2 & HY1 FY23 | Transcript

When we compare the performance of revenue from operations of Q1 '23 to Q2 '23, there has been an increase of 18%. The figures have gone up `580 crore to `682 crore. Similarly, the total income of half year has gone up by 67% from `802 crore to `1,344 crore.

EBITDA has also gone up for the half year from `125 crore to `163 crore. That is an increase of 31%.

From Q1 of '23 to Q2 of financial year '23, in EBITDA, there has been an increase of 20%, that is from `74 crore to `89 crore.

The profit after tax (PAT), half year to half year comparison, has gone up by 37% from `79 crore to `109 crore. Q1 of FY23, the PAT was `50 crore, gone up by 17% to `59 crore.

Earnings Per Share have gone up from `6.93/‐ to `9.51/‐. This is 37% increase for the half year of 2023.

So, as a whole, the financial performance has been satisfactory, and we are very confident of maintaining the tempo that we have generated during the first half of the financial year and carry it forward to the second half and thereby give good financial performance during the current financial year.

Coming to our order book position.

As on 30th September, 2022, our order book stands at `22,930 crore. This comprises of 7 shipbuilding projects totaling 24 platforms. These include 3 projects for Indian Navy, the P‐17 Alpha project comprising of 3 ships, the Antisubmarine Warfare Shallow Water Crafts (ASW SWC) project comprising of 8 ships and 4 ships Survey Vessel Large project. So, these 3 projects for the Indian Navy total to 15 warships.

In addition, we are executing a project for the Government of Guyana, a passenger cum ocean going ferry vessel and an order of the Indian Coast Guard for a Fast Patrol Vessel. We are also executing the project for the Government of Bangladesh for construction of 6 Patrol boats and an order for the government of West Bengal for a next‐generation electric ferry.

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GRSE | Con Call | Q2 & HY1 FY23 | Transcript

Shipbuilding comprises of a major chunk of our order book that is nearly 97 to 97.5% and the balance is coming from diversified segments i.e. Bailey Bridges, Deck Machinery, Diesel Engines, and Ship Repair.

As far as the execution plan for the current projects of the 7 shipbuilding projects that we are executing currently, 2 of these projects we intend completion during the current financial year. One is the passenger cum ferry vessel being executed for the Government of Guyana. The vessel has now reached around 75% of physical construction and this project is planned to be completed during the last quarter of this financial year.

Similarly, the Fast Patrol Vessel being constructed for the Indian Coast Guard, we almost passed 81% of physical progress and the ship is now in the trial phase. This ship is planned to be delivered during the last quarter of the current financial year.

As far as the other shipbuilding projects are concerned, let me first start with the P‐17 Alpha project. As I stated earlier, we are presently constructing three P‐17 Alpha ship for Indian Navy. The first ship has already clocked around 43% of physical construction, the second ship around 35%, and the third ship around 16%. The progress of these ships is satisfactory, and as per the present bill plan, the first of these ships is scheduled to be delivered during mid‐2025 and the last ship during mid‐2026.

Now coming to the Survey Vessel Large project

We are presently constructing 4 ships under this project, and the first ship which was launched during end 2021 has already touched 65% of physical construction. The ship will be now moving into the trial phase, and the ship planned to be delivered during the first quarter of the next financial year. The second ship of the project has achieved around 58% of physical construction, and the ship is likely to be delivered during the end of the next calendar year, that is the third quarter of FY24. The construction progress of the last two ships of the project is also satisfactory, with both the ships having achieved 38% and 14% respectively.

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