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- 10 Feb 2023
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PICK-UP IN EXECUTION LEADS TO STRONG REVENUE GROWTH - GARDEN REACH SHIPBUILDERS LATEST QUARTERLY RESULT
GRSE - 2669 Change: -132.60 (-4.73 %)Garden Reach Shipbuilders & Engineers – Q3FY23 First Cut
(CMP: Rs 478: MCap: Rs 5471 crore)
Q3FY23 Earnings Summary
Revenue came in at Rs 699.1 crore; increased by 43.6% YoY as the execution has picked up considerably in its three major contracts (P-17A frigates, anti-submarine warfare corvettes, and survey vessels). 9MFY23 revenue is also up by 61.6% YoY
EBIDTA margin stands at 6.7%; down 389 bps YoY; mainly on account of higher subcontracting charges and other expenses. Sequentially EBITDA margin is down by 37 bps. 9MFY23 EBITDA margins stands at 6.6% vs 8.9% for 9MFY22. EBITDA for the quarter came in at Rs 46.9 crore; down 9.1% as lower margins negated the impact of increase in revenues. 9MFY23 EBITDA is up 18.6% YoY
PAT came in at Rs 63.9 crore (up 1.6% YoY and 8.8% QoQ) as other income is up by 14.2% YoY to Rs 50.2 crore. 9MFY23 PAT is up 15.2% YoY to Rs 172.8 crore
View: GRSE’s revenue recognition is set to increase during FY22-25E in its major contracts (P-17A frigates, anti-submarine warfare corvettes, and survey vessels). With an order backlog of ~Rs 22000 crore (8.8x TTM revenues), the company is well placed to benefit from Indian Navy’s big procurement plan for the next three to four years (like next generation corvettes, ocean going patrol vessels, next phase of frigates and other vessels). Moreover, pick-up in execution will be supported by increasing indigenisation of platforms/sub-systems used in different warships & vessels.
Impact: Neutral