ABS Marine — Q4 FY26 earnings call

Call held 8 Jun 2026

Management summary

ABS Marine Services reported exceptional financial performance for FY26 and H2 FY26, driven by robust revenue growth, significant EBITDA and PAT margin expansion, and strategic fleet additions. The company successfully inducted the offshore support vessel Artemis and acquired MPSV, with another vessel expected in Q1 FY27, bolstering its operational capabilities. Management provided optimistic guidance for FY27, expecting 10% revenue growth and maintaining EBITDA margins between 45-50%, supported by favorable market dynamics and the benefits of tonnage tax for new vessels.

Highlights

  • FY26 consolidated total income grew robustly by 75.05% to INR322.64 crores, demonstrating strong business momentum.

  • EBITDA for FY26 surged by 179.17% to INR152.55 crores, with the EBITDA margin expanding significantly by 1,763 basis points to 47.28%.

  • H2 FY26 saw even stronger performance with EBITDA margin reaching 51.46%, an increase of 1,667 basis points.

  • Profit after tax for FY26 increased by 196.45% to INR80.80 crores, with PAT margin improving by 1,026 basis points to 25.04%.

  • Successfully inducted the offshore support vessel Artemis and scheduled delivery of another offshore supply vessel in Q1 FY27, enhancing fleet capabilities and revenue visibility.

Concerns

  • Emerald vessel became idle in May 2026 due to dry docking, incurring an idle cost of approximately $1,700 per day.

  • The newly acquired MPSV requires dry docking and Indian flag conversion, delaying its operational chartering for a few months.

  • Analyst raised concerns about potential oversupply if high charter rates lead to aggressive capex across the industry, though management downplayed this risk.

Key financials

2 periods

H2 FY26

  • Total Income
    ₹183.11 Cr
    YoY +78.9%
  • EBITDA
    ₹94.23 Cr
    YoY +164.6%
  • EBITDA Margin
    51.5%
  • PAT
    ₹49.46 Cr
    YoY +158.2%
  • PAT Margin
    27%
  • EPS
    ₹19.96
    YoY +146.4%

FY26

  • Total Income
    ₹322.64 Cr
    YoY +75%
  • EBITDA
    ₹152.55 Cr
    YoY +179.2%
  • EBITDA Margin
    47.3%
  • PAT
    ₹80.8 Cr
    YoY +196.4%
  • PAT Margin
    25%
  • EPS
    ₹32.59
    YoY +184.9%

What they filed

₹ Cr · quarterly
Line itemQ2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue80 100 136 183
EBITDA17 33 55 94
Net profit8 19 31 49
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex Capex disclosed
    • Acquisition of Hades (Artemis) and MPSV vessels $15 Mn
    P. B. Narayanan: Just a moment. We have totally, we have spent about $15 million for both the vessels.
  • Debt Debt disclosed
    V. V. Anantha Narayanan: At this point of time with our debt-equity ratio the banks are also comfortable. I don't think we have overshot on the debt side. With adequate reserves and all, I think bankers are comfortable for lending at this point of time. With Bankers comfortable with the current debt-equity ratio ,we don't see funding will be a problem at this point of time.
  • M&A Hades (Artemis) and MPSV vessels Acquisition · Closed · Consideration ₹[object Object] (undisclosed)

    Enhance offshore capabilities, expand owned fleet, improve operational control, service delivery, and long-term revenue visibility.

    The acquisition has also improved fleet flexibility and enhanced long-term revenue visibility for the business.

    Arathi Narayanan: As part of this strategy, during H2 FY26, we successfully inducted the offshore support vessel, Artemis, into our owned fleet, expanding our vessel ownership portfolio and improving our ability to participate in higher-value offshore projects. The acquisition has also improved fleet flexibility and enhanced long-term revenue visibility for the business. ... P. B. Narayanan: Just a moment. We have totally, we have spent about $15 million for both the vessels.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY27 · Medium confidence 10% increase
    V. V. Anantha Narayanan: As regards the guidance on the top line is concerned, we can expect a 10% increase -- assuming that all the vessels will be running in the second half.

    — V. V. Anantha Narayanan

Profitability

  • EBITDA Margin Profitability · FY27 · Medium confidence 45-50%
    V. V. Anantha Narayanan: As regards the EBITDA is concerned, I am sure that currently it is in the band of 45 to 50. I am sure that that will continue.

    — V. V. Anantha Narayanan

Tax Rate

  • Effective Tax Rate Tax Rate · FY27 · High confidence 1.5% to 2%
    V. V. Anantha Narayanan: Around maximum of 1.5% to 2% in that range.

    — V. V. Anantha Narayanan

Fleet Expansion

  • Number of New Vessels Fleet Expansion · over a period of two to three years · Medium confidence 7 to 8 vessels
    V. V. Anantha Narayanan: I think Captain has already told that the vision is to expand and to go forward for seven to eight vessels over a period of two to three years.

    — V. V. Anantha Narayanan

Operational Efficiency

  • Operational Days per Year Operational Efficiency · financial year · High confidence 330 days
    P. B. Narayanan: A ballpark figure is that the vessel doesn't operate 360. An optimum would be about 330. So, we normally calculate everything on the basis of 330 days working in a financial year or a normal year. That takes care of our maintenance and other other issues.

    — P. B. Narayanan

What to watch in Q1 FY27

Operational Status of Emerald and Serenity

next quarter
Current Emerald idle since May 2026; Serenity (MPSV) undergoing dry dock/clearance
Target Both vessels secured new charters and operational

Why it matters

Ensuring these vessels are operational is key to realizing revenue and avoiding idle costs, directly impacting FY27 financial performance.

P. B. Narayanan: Whereas Emerald, we had to pull out because the dry docking was coming up, so some jobs were to be done. So, we have pulled out and as of now, she is at the anchorage and we are negotiating with various people for the next contract. ... P. B. Narayanan: The other vessel has just come into India, we are just going through the process. We have a lot of inquiries. We are not doing anything because she has to go for a dry dock and then conversion to Indian flag and other things. Only then we will start looking for a charter.

Risks & concerns

  • Vessel Idling Costs

    medium

    The Emerald vessel became idle in May 2026, incurring costs of approximately $1,700 per day while at anchorage.

    Analyst acknowledged

  • Delay in New Vessel Deployment

    medium

    The newly acquired MPSV requires dry docking and Indian flag conversion, which will delay its operational chartering for a few months.

    Management acknowledged

  • Oversupply in Offshore Vessel Market

    low

    Analyst questioned if high charter rates could lead to aggressive capex and oversupply. Management stated supply is low, new builds are expensive, and they focus on long-term charters.

    Analyst downplayed

  • Seasonal Impact on Operations

    low

    EPC contracts and some vessel operations are seasonal and cannot operate during the monsoon period, impacting H1 revenue clocking for new vessels.

    Management acknowledged

Q&A highlights

7 direct
Contract Renewals and Charter Rates for Existing Vessels Direct
P. B. Narayanan: We hope to get at least this kind of rate or better because the availability of vessels is very less. At the same time, these vessels have proved to be very fuel-efficient. Most of the vessels they have been getting, ideally, it would be about 8 to 9 kilolitres per day, whereas these are doing it at 5.

Analyst questioned the company's ability to secure repeat contracts at favorable rates, and management explained their competitive advantage in fuel efficiency and market scarcity.

Asked by Rahil Dasani

Acquisition and Charter Rates of New Vessels (Artemis/Hades & MPSV) Direct
P. B. Narayanan: Yes, this one vessel which is already in Chennai, going through her routines to get the clearance from the Ministry of Defence. We are just waiting for that. We have already got a charter with Hardy Oil for a five-year contract and... The other vessel has just come into India, we are just going through the process.

Provided specific details on the status, contracts, and expected charter rates for the newly acquired vessels, indicating future revenue streams.

Asked by Rahil Dasani

Idle Vessel Costs and Utilization Direct
P. B. Narayanan: I am not I mean, it all depends on number of people we keep on board and how much we are burning. So, let's put it as a ballpoint figure, it's about $1,700 a day.

Quantified the daily cost of an idle vessel (Emerald), providing insight into operational expenses during non-charter periods.

Asked by Apoorv Bandi

FY27 Revenue and EBITDA Margin Guidance Direct
V. V. Anantha Narayanan: As regards the guidance on the top line is concerned, we can expect a 10% increase -- assuming that all the vessels will be running in the second half. We can expect on the turnover front a 10% increase from the current levels. As regards the EBITDA is concerned, I am sure that currently it is in the band of 45 to 50. I am sure that that will continue.

Management provided explicit forward-looking financial targets, crucial for investor modeling and expectations.

Asked by Apoorv Bandi

Impact of Tonnage Tax on FY27 Tax Rate Direct
V. V. Anantha Narayanan: So, with the new vessels, everything we will be putting it in the tonnage tax scheme because of which the 75% of the revenue will be taxed at much lesser rate, only the balance 25% will be coming under the normal taxation scheme.

Clarified the significant reduction in effective tax rate for FY27 due to strategic utilization of the tonnage tax scheme for new vessel acquisitions.

Asked by Yogansh Jeswani

Demand Outlook and Bid Pipeline Direct
P. B. Narayanan: See, demand is as of -- as we talk now, ONGC is asking for about 20-vessel tender is going to come. I don't know when, they have been talking about it for last 4 months. But our inside information is it should come anytime soon, I would say anytime soon, but I can't give any commitment. So, there is a demand from that.

Provided specific details on upcoming large tenders from ONGC and general strong demand in the offshore sector, indicating future growth opportunities.

Asked by Rahil Dasani

Revenue Stream Composition Direct
V. V. Anantha Narayanan: Now, because of new acquisition of vessels, it's almost 75 to 25. That is 75% comes from chartering, that is the income recognized from charter hire of owned ships comes to 75%. From ship management and other port-related services, it's 25%.

Detailed the shift in revenue mix towards chartering (75%) due to new vessel acquisitions, highlighting the increasing contribution from owned assets.

Asked by Kiran

Related Party Transaction (Erin) Clarification Partial
V. V. Anantha Narayanan: No, actually, to give more clarity on the related party transaction, we generate around 10% to 15% on the Erin thing as a ship management fee, what we generally maintain on the ship management, that is at an arm's length price of 15% to 20% is being recognized on the Erin also.

Addressed an analyst's concern about a potential loss on a related party transaction, clarifying the nature of the income as a ship management fee.

Asked by Rahil Dasani

2 min read 5 chapters

Detailed narrative

Exceptional Financial Performance in FY26 and H2 FY26

ABS Marine Services Limited delivered a robust financial performance for FY26, with consolidated total income reaching INR322.64 crores, marking a significant 75.05% year-on-year growth. EBITDA surged by 179.17% to INR152.55 crores, leading to a sharp expansion in EBITDA margin by 1,763 basis points to 47.28%. Profit after tax (PAT) also saw a substantial increase of 196.45% to INR80.80 crores, with PAT margin improving by 1,026 basis points to 25.04%. The strong momentum continued in H2 FY26, where total income grew by 78.93% to INR183.11 crores, and EBITDA margin further expanded to 51.46%.

Strategic Fleet Expansion and Operational Enhancements

The company strategically expanded its owned fleet during H2 FY26 by inducting the offshore support vessel Artemis and acquiring MPSV, investing a total of $15 million in these two vessels. Another offshore supply vessel is slated for delivery in Q1 FY27. This expansion aims to improve operational control, service delivery, and long-term revenue visibility. Management emphasized that these vessels are highly fuel-efficient, consuming 5 kilolitres per day compared to the industry average of 8-9 kilolitres per day, which is a significant advantage given current diesel prices exceeding INR2 lakh per liter.

Positive Industry Outlook and Demand Drivers

ABS Marine is optimistic about opportunities in the offshore and maritime sectors, driven by government initiatives like the Maritime India Vision 2030, which projects INR3 lakh crores to INR3.5 lakh crores in investments, and a INR69,725 crores support package for shipbuilding. Favorable demand-supply dynamics, an aging global fleet, and limited new vessel additions are improving utilization levels and charter rates. Management noted strong demand from ONGC, which is expected to release a 20-vessel tender soon, and other major players like Reliance.

FY27 Financial Guidance and Tonnage Tax Benefits

For FY27, ABS Marine expects a 10% year-on-year increase in revenue, assuming all vessels are operational in the second half of the year. The EBITDA margin is projected to remain strong, in the range of 45-50%. A significant highlight for FY27 is the expected reduction in the effective tax rate to approximately 1.5% to 2%. This is attributed to the company's strategy of placing new vessel acquisitions under the tonnage tax scheme, which will tax 75% of the revenue at a much lower rate.

Vessel Management and Capital Allocation Strategy

The company operates a diversified fleet of 12 vessels, with 5 on long-term charters and 4 smaller vessels (pilot/security boats) also on long-term contracts. Two vessels (Emerald and Diamond) recently came off charter, and one new acquisition (Serenity/MPSV) requires dry docking. Management stated that they continuously look for bargains in vessel acquisitions and aim for vessels that generate sufficient PAT and cash flows to be self-funding. The current debt-equity ratio is comfortable, and bankers are willing to lend, indicating no funding constraints for future expansion.

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