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  • 27 May 2024
  • ICICI Securities

STRONG GROWTH CONTINUES IN BOTH THE SEGMENTS

COCHINSHIP - 1411 Change: -12.35 (-0.87 %)

News: Revenue increased by 114.3% YoY (+21.7% QoQ) to Rs 1286.0 crore, led by strong execution in both the segments. Ship-building revenue (77% of total) increased by 117.1% YoY (+30.8% QoQ) to Rs 985.2 crore and ship-repair segment revenue (23% of total) grew by 105.8% YoY (flat QoQ) to Rs 300.9 crore. EBITDA margin expanded sharply by 3359 bps YoY to 22.4% (vs -11.2% in Q4FY23), led by lower raw material cost and positive operating leverage. Subsequently, EBITDA was up significantly to Rs 288.3 crore (vs EBITDA loss of Rs 67.1 crore in Q4FY23). EBIT margin of ship-building stood at 17.6% (+3700 bps YoY, -900 bps QoQ) while it stood at 43.9% (+2976 bps YoY, +247 bps QoQ). PAT came in at Rs 258.9 crore (vs Rs 39.3 crore in Q4FY24). For FY24, revenue is up 62% YoY (ship-building and ship-building revenue are up 58% YoY and 76% YoY respectively) with EBITDA margin stands at 22.7% (vs 10.5% in FY23).

Views: With 62% YoY revenue growth for FY24, operational performance came significantly better than expectations. Execution in both the segments (ship-building and ship-repair) has improved significantly in the last 3 quarters on YoY basis after facing muted execution last year due to some design changes and supply chain issues in a few contracts. With positive operating leverage and better gross margins, EBITDA margin has also improved significantly. Order backlog is estimated to be at ~Rs 22000 crore (5.7x FY24 revenues), providing strong revenue growth visibility. Order pipeline remains robust across defence & commercial ships/vessels (domestic and exports) and ship-repair. Moreover, recent commissioning of ship-building and ship repair facilities have significantly augmented the company's capacity and overall capabilities.

Impact: Positive