ABS Marine

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%.

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.

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.

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.

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.