India ▾

Cochin Shipyard Limited — Q1 FY27 earnings call

Call held 10 Sep 2026

Company page: Cochin Shipyard share price, financials & guidance record

Management summary

Cochin Shipyard reported a modest 2.4% YoY revenue growth in Q1 FY27 to ₹1,094.21 crores, but PBT and PAT saw declines of 18.86% and 19.36% respectively. The company made significant strategic moves, including a ₹1,800 crore JV with Drydocks World for its ISRF and securing L1 status for ₹5,000 crores in new orders, pushing the pro-forma order book to ₹27,000 crores. Management outlined ambitious capex plans totaling ₹6,000-6,500 crores over five years for new facilities and a Green Maritime JV, expecting positive cash flow in FY27 despite current quarter's negative operating cash flow.

Highlights

  • Revenue grew by 2.4% YoY to ₹1,094.21 crores in Q1 FY27.

  • Secured a significant joint venture with Drydocks World, Dubai, for ISRF, valued at ₹1,800 crores, enhancing global reach and operational efficiency.

  • Achieved L1 status for five next-generation survey vessels worth ₹5,000 crores, boosting the order book to ₹27,000 crores post-conversion.

  • Advanced expansion plans with CCEA approval for Vadinar ship repair facility and successful bid for Tuticorin facility (₹305.76 crores lease payment).

  • Established a Green Maritime Propulsion JV with HBL, targeting ₹640 crores revenue by 2031 with a 20% EBITDA margin, addressing the growing green marine sector.

Concerns

  • PBT declined by 18.86% YoY to ₹202.49 crores in Q1 FY27.

  • PAT declined by 19.36% YoY to ₹151.45 crores in Q1 FY27.

  • Operating cash flow was negative in Q1 FY27 due to payment terms of export orders, with 70% payment on delivery.

  • EBITDA margin of 24% in Q1 FY27 is lower than previous years due to a shift from nominated orders to tender-based projects and reduced interest income from cash surplus now deployed in capex.

Key financials

  1. Turnover ₹1,094.21 Cr +2.4%YoY
  2. PBT ₹202.49 Cr -18.9%YoY
  3. PAT ₹151.45 Cr -19.4%YoY
  4. EBITDA Margin 24%
  5. PAT Margin 14%

What they filed

Q1 FY27: revenue up 2.3%, net profit down 19.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,143 1,148 1,758 1,069 1,119 −2%1,350 +18%1,484 −16%1,094 +2%
EBITDA197 237 266 241 74 −62%187 −21%310 +17%193 −20%
Net profit189 177 287 188 108 −43%145 −18%276 −4%151 −20%
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.

Order book

high confidence

Total value

₹22,000 Cr

as of 2026-06-30 quantified

Pipeline

L1 awaiting loa

L1 for five next-generation survey vessels for Indian Navy, valued approximately INR 5,000 crores. Once this contract concludes, the order book will be around INR 27,000 crores.

The company has a robust order book providing good revenue visibility, with significant pipeline opportunities in both defense and commercial segments.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed Combination of debt and equity, with a debt-equity ratio of around 80:20. Supported by 25% capex subsidy under Shipbuilding Development Scheme and 3% interest subvention from Maritime Development Fund's Interest Incentivisation Fund.
    • ISRF (International Ship Repair Facility) JV ₹1,800 Cr
    • Green Maritime Propulsion JV (total capital) ₹50 Cr
    • Tuticorin facility lease payment ₹305.76 Cr
    • Total capex across ISRF, Vadinar, Tuticorin, Block Fabrication Facility over next 5 years ₹6,000 Cr
    The ISRF undertaking is proposed to be transferred to the JV company on a slump sale basis, as a going concern, for a consideration of INR 1,800 crores. CSL will receive 50% of the consideration in cash, while the balance 50% will be received in the form of equity in the shares of JV company. The valuation of INR 1,800 crores is based on an independent third party valuation. ... And the total capital is only INR 50 crores. ... Under this arrangement, against a one-time payment of INR 305.76 crores, CSL will get access to around 110 acres of land and 17.29 acres of waterfront area for a period of 30 years. ... For all this strategic project, government support and policy initiatives will be very important, and CSL has already applied for financial support under the Government of India Shipbuilding Development Scheme for our greenfield and brownfield expansion project, which will help reduce the overall funding requirement and actual cash outflow for these investments. We also plan to fund these projects through a combination of debt and equity. In this context, Maritime Development Fund's Interest Incentivisation Fund, which provides interest subvention up to 3% on the loans extended to the shipyards and shipping companies, will also be very helpful supporting the financing of this strategic initiative. ... So, assuming you get it in 1 year, this [inaudible 0:49:52] and then how much is the revenue potential, say, by 2030, 2032 equivalent? And similarly, your Block Fabrication Facility, as well as your Tuticorin facility, for all of these four that you are spending -- literally, if I look at it, you're going to spend INR 6,000 crores of capex over the next 5 years, INR 6,500 crores. Broadly, what are the revenue targets from this, and how are you looking at these investments? ... And as this capex will be spent over a period of next 5 years, and we will be going mostly through a debt-equity ratio of around 80:20.
  • M&A Drydocks World, Dubai JV (for ISRF) Joint venture · Announced · Consideration ₹[object Object] (mixed)

    To own, operate, and manage CSL's International Ship Repair Facility (ISRF), bringing global scale, efficiencies, and customer network to attract international customers.

    CSL receives 50% (₹900 crores) in cash and 50% (₹900 crores) in equity in JV shares. JV will operate existing ISRF and undertake capacity augmentation.

    The Board has approved the proposal to form a joint venture with Drydocks World, Dubai, a DP World company, for owning, operating, and managing CSL's International Ship Repair Facility, ISRF, at Willingdon Island, Kochi. ... The proposed joint venture will have equal shareholding, with CSL and DDW holding 50% each. ... The ISRF undertaking is proposed to be transferred to the JV company on a slump sale basis, as a going concern, for a consideration of INR 1,800 crores. CSL will receive 50% of the consideration in cash, while the balance 50% will be received in the form of equity in the shares of JV company.
  • M&A Green Maritime Propulsion JV (with HBL) Joint venture · Announced · Consideration ₹[object Object] (undisclosed)

    To marinize battery systems for marine usage, leveraging HBL's battery manufacturing expertise and CSL's marine sector knowledge, addressing the growing demand for green tugs and reducing imports.

    CSL holds 40% stake in the JV, with a total capital of INR 50 crores. The JV will focus on marketing and R&D, with manufacturing done by HBL. Expected to generate INR 640 crores revenue by 2031 with 20% EBITDA margin.

    See, the basic purpose of constituting that JV is that see, now HBL is a number one battery manufacturer, but they are not in the marine sector. And we have our expertise in the marine sector. So this company will marinize that battery requirement for the marine usage. ... And the total capital is only INR 50 crores. ... And in this JV, 60% is held by HBL, and 40% is CSL. So we have only 40% stake in that company.

Guidance & targets

Revenue

  • Green Maritime Propulsion JV Revenue Revenue · by 5th year (2031) · Medium confidence ₹640 crores
    The company was incorporated in June '26. And we are targeting a product range of energy storage systems, especially for the marine sector. Then, electrical power management systems and all. And we are targeting a revenue as per our business plan, we are targeting a revenue of INR 640 crores by 5th year. This is our plan.

    — Dr. Harikrishnan S

  • Annual Revenue Booking from Order Book Revenue · annually · Medium confidence 12-15%
    Normally, we guide around 12% every year to the investors. So, we are still sticking on to that, because normally we guide around 12%, but finally, we may end up between something around 12% to 15% every year.

    — Jose V J

  • ISRF JV Turnover Revenue · over next 2 years (start) · Medium confidence ₹600 crores
    See, from the ISRF facility, we are expecting to get around INR 600 crores turnover over a period of next 2 years, to start with. Then, it will scale up to around INR 1,000 crores to INR 1,200 crores over a period of 5 years.

    — Jose V J

  • ISRF JV Turnover (scaled) Revenue · over 5 years · Medium confidence ₹1,000-1,200 crores
    Then, it will scale up to around INR 1,000 crores to INR 1,200 crores over a period of 5 years.

    — Jose V J

  • Vadinar Ship Repair Facility Turnover Revenue · after 36 months from EC · Medium confidence ₹500-600 crores
    And from Vadinar, the revenue will start recognizing only from 36 months from the date of getting environmental clearance. So, after 3 years, we may get a turnover of around -- to start with around INR 300 crores to around INR 500 crores to INR 600 crores. That is for Vadinar.

    — Jose V J

  • Tuticorin Facility Turnover Revenue · start · Medium confidence ₹650-700 crores
    In Tuticorin, we are in the DPR stage only. But there also, we expect a turnover of around -- should start with around INR 650 crores to INR 700 crores to scale up to around INR 1,800 crores to INR 2,000 crores over a period of next 7 to 8 years.

    — Jose V J

  • Tuticorin Facility Turnover (scaled) Revenue · over next 7-8 years · Medium confidence ₹1,800-2,000 crores
    to scale up to around INR 1,800 crores to INR 2,000 crores over a period of next 7 to 8 years.

    — Jose V J

Profitability

  • Green Maritime Propulsion JV EBITDA Margin Profitability · long-term · Medium confidence 20%
    We expect an EBITDA margin of around 20%.

    — Dr. Harikrishnan S

  • Return on Capital (ROC) for new investments Profitability · long-term · Medium confidence 14-15%
    Around 14, the ROC will be around 14% to 15%.

    — Jose V J

  • Blended EBITDA Margin Profitability · annually · High confidence 14%
    EBITDA margin will be around 14%, blended on a very conservative basis.

    — Jose V J

Deliveries

  • Total Vessel Deliveries Deliveries · FY27 · High confidence 10 vessels
    We are planning to deliver 10 vessels in this financial year.

    — Dr. Harikrishnan S

Order Inflow

  • Next Generation Survey Vessels (NGSV) Contract Signing Order Inflow · November 2026 · Medium confidence November 2026
    That NGSV, the Indian Navy, the procedures are bit longer. We expect that the order to be inked around November this year.

    — Jose V J

  • Dredging Corporation of India (DCI) Repeat Order Contract Signing Order Inflow · within two months · Medium confidence within two months
    And DCI, the repeat order for the next dredger, it can happen within two months. That's what we expect.

    — Jose V J

Green Initiatives

  • Green Tug Transition Program (GTTP) Target Green Initiatives · by 2035-40 · High confidence 50% green tugs
    So, Government of India is also wanting to see 50% of our tugs go green by around 2035 to '40.

    — Rajesh Gopalakrishnan

Market context

  • Operating Cash Flow Cash Flow · FY27 · High confidence Positive
    So, we can expect that cash flow will become positive in FY27, right? Yes. FY27, the cash flow will be positive.

    — Jose V J

What to watch in Q2 FY27

Drydocks World JV Agreement Signing

next quarter
Current Approved by Board, JV agreement to be signed tomorrow (Sept 11, 2026)
Target Agreement signed and announced

Why it matters

This JV is a major strategic initiative for CSL's ship repair business and global expansion.

The JV agreement will be signed tomorrow on the sidelines of the BRICS Summit at New Delhi, while other agreements will be signed after incorporation of JV and receipt of requisite approvals.

Risks & concerns

  • Execution delays for Vadinar Ship Repair Facility due to environmental clearance

    medium

    The facility is targeted to be operationalized within 36 months from the receipt of environmental clearance, which is still pending.

    Management acknowledged

  • Development of hydrogen fuel cell ecosystem

    medium

    The ecosystem for hydrogen fuel cell vessels, including landside infrastructure, hydrogen availability, and bunkering facilities, will take time to develop.

    Management acknowledged

  • Competition in defense orders for P-17 Bravo

    low

    Other shipyards are more competitive for P-17 Bravo due to prior experience, though CSL will participate aggressively.

    Management acknowledged

Q&A highlights

8 direct
Green Maritime JV Scale & Margins Direct
The company was incorporated in June '26. And we are targeting a product range of energy storage systems, especially for the marine sector. Then, electrical power management systems and all. And we are targeting a revenue as per our business plan, we are targeting a revenue of INR 640 crores by 5th year. This is our plan. We expect an EBITDA margin of around 20%.

Clarified the specific product focus, revenue targets, and margin expectations for the new Green Maritime JV, providing insight into its future contribution.

Asked by Garvit Goyal, Serene Alpha

Cash Flow & ROC for New Investments Direct
So, now, that the vessel delivery the orders which has been taken during the period of '23 and '24 and all, they have all slated to be delivered in current and next financial year. So, we have already completed the construction of around 80% to 85% to 90%, but whereas we have received the money up to 30% only. ... Yes. FY27, the cash flow will be positive. ... Around 14, the ROC will be around 14% to 15%.

Addressed concerns about negative operating cash flow despite strong PAT, explaining the impact of export order payment terms and providing a clear timeline for cash flow improvement and ROC targets for new projects.

Asked by Mohit Chaurasiya, Individual Investor

Drydocks World JV Strategy and Market Impact Direct
The reason for bringing in DDW is to bring in global scale, global efficiencies, and connects into the global market. Having said that, CSL today commands a significant captive market in India for this size of vessel. ... No. See, actually, the ISRF can handle vessels only up to 130-meter long and 6,000 tons in weight. Even today, all the larger vessels are being handled across the main CSL yard and across all our units. So, we have, between the 2 of us, have a very clear understanding that there will be no ingress into that market by DDW, and the current market share of CSL in the other segments will continue to be held by CSL.

Provided clarity on the strategic rationale behind the JV, assuring analysts that CSL's existing market share would be protected while leveraging DDW's global network for new business.

Asked by Dipen Vakil, PhillipCapital

Order Pipeline and Contract Finalization Timelines Direct
That NGSV, the Indian Navy, the procedures are bit longer. We expect that the order to be inked around November this year. And DCI, the repeat order for the next dredger, it can happen within two months. That's what we expect. ... That is around INR 1,300 crores, one ship.

Gave specific timelines and values for key upcoming defense and commercial orders, providing visibility into future order book additions.

Asked by Dipen Vakil, PhillipCapital

Block Fabrication Facility Capacity Post-Solo Decision Direct
Presently, our block fabrication facility is around 12,000 tons per year in CSL main facility. But because having commissioned the new drydock, we need more steel throughput. So, what we are expecting is that with the Hyundai, we were planning to have a 1 lakh ton capacity block fabrication facility. Since we are going alone now, we are planning to have a reduced capacity of around 60,000 ton per annum. ... So, 60,000 tons from the new block fabrication facility plus 12,000 tons from our existing facility. So, it will be around for the throughput will be around 72,000 tons.

Clarified the revised capacity plans for the Block Fabrication Facility after CSL decided to proceed independently, detailing the current and projected total capacity.

Asked by Dipen Vakil, PhillipCapital

Reasons for Reduced EBITDA Margin Direct
See, the higher margin for the last 3 years is mainly because we had some the nominated orders like in aircraft carrier for the shipbuilding, Indian the indigenous aircraft carrier. In ship repair also, there were two aircraft carrier refit. So, there the margins are higher. But going forward, we cannot expect such margins from the commercial orders or the defense order, because now all the tenders from the defense is also on a tender basis. And also, now that the higher EBITDA margin was also on account of we were having a cash surplus of around INR 2,000 to INR 3,000 crores always, that interest was also a steady income for every year. So, having capitalized or commissioned the two capex projects of ISRF and Drydock, which where we have spent around INR 3,000 crores without any loan, that cash surplus is also not there now. So, these are the reasons for reduced EBITDA margin compared to previous years.

Provided a comprehensive explanation for the observed decline in EBITDA margins, attributing it to a shift in order types and the deployment of cash surplus into capex, which previously generated interest income.

Asked by Abhishek Poddar, Citadel

Capex Plans and Revenue Potential from New Facilities Direct
See, from the ISRF facility, we are expecting to get around INR 600 crores turnover over a period of next 2 years, to start with. Then, it will scale up to around INR 1,000 crores to INR 1,200 crores over a period of 5 years. And from Vadinar, the revenue will start recognizing only from 36 months from the date of getting environmental clearance. ... In Tuticorin, we are in the DPR stage only. But there also, we expect a turnover of around -- should start with around INR 650 crores to INR 700 crores to scale up to around INR 1,800 crores to INR 2,000 crores over a period of next 7 to 8 years. ... you're going to spend INR 6,000 crores of capex over the next 5 years, INR 6,500 crores.

Detailed the revenue potential and timelines for the major new facilities (ISRF, Vadinar, Tuticorin) and provided the total capex outlay for these strategic projects over the next five years.

Asked by Deepak Krishnan, Kotak Institutional Equities

Naval Program Prioritization and Commercial Shipping Opportunities Direct
See, from the defense order book pipeline, as you rightly said, the P-17 Bravo, because other yards are more competitive because they have the expertise or they have already done the vessels. But if you look into that aspect, then the LPD will be the most suitable for us, and -- the possibility is more on LPD, because we have already done aircraft carrier, and we have a large dock, and the steel heavy platform is LPD. So, the LPD and MCMV will be more suitable for us compared to P-17 Bravo, though we will participate in all the tenders aggressively. ... For MR tankers, we have submitted the technical bid, and the indicative cost is around INR 1,700 crores. Similarly, for Aframax tanker, we have responded to the expression of interest, and the indicative cost is around INR 2,600 crores.

Provided management's strategic focus on specific naval programs (LPD, MCMV) where CSL has a competitive advantage, and updated on the progress and indicative values of commercial shipping tenders.

Asked by Deepak Krishnan, Kotak Institutional Equities

4 min read 8 chapters

Detailed narrative

Q1 FY27 Financial and Operational Performance Overview

Cochin Shipyard Limited reported a Q1 FY27 turnover of ₹1,094.21 crores, marking a 2.4% increase from ₹1,068.59 crores in the corresponding period last year. Despite this revenue growth, PBT and PAT saw declines of 18.86% and 19.36% respectively, reaching ₹202.49 crores and ₹151.45 crores. The company maintained an EBITDA margin of around 24% and a PAT margin of 14%. Operationally, CSL delivered three vessels, including an Anti-Submarine Warfare Shallow Water Craft and a multipurpose export vessel, while its subsidiary, Udupi Cochin Shipyard, delivered three vessels including two general cargo vessels and a tug.

Strategic Joint Venture with Drydocks World, Dubai for ISRF

The Board approved a 50:50 joint venture with Drydocks World, Dubai, to manage CSL's International Ship Repair Facility (ISRF) at Kochi. The ISRF, valued at ₹1,800 crores, will be transferred to the JV on a slump sale basis, with CSL receiving 50% in cash and 50% in JV equity. This partnership aims to leverage DDW's global network and operational expertise, combined with CSL's Indian market presence, to enhance efficiency, reduce turnaround time, and attract international customers. The JV agreement is slated for signing on September 11, 2026, with the transaction targeted for completion by the end of the current financial year, subject to regulatory and shareholder approvals.

Expansion into New Facilities: Vadinar, Tuticorin, and Block Fabrication

CSL is actively pursuing several expansion projects. The proposed ship repair facility at Vadinar, Gujarat, a joint venture with Deendayal Port Authority, received CCEA approval and is expected to be operational within 36 months of environmental clearance, targeting ₹500-600 crores in turnover. In Tuticorin, CSL secured a 30-year lease for 110 acres of land and waterfront for ₹305.76 crores, planning a hybrid shipbuilding and repair facility with a potential turnover of ₹1,800-2,000 crores over 7-8 years. The Block Fabrication Facility at Kochi, initially planned with HD KSOE, will now be developed independently by CSL at a reduced capacity of 60,000 tons per annum, adding to the existing 12,000 tons/year capacity.

Green Maritime Propulsion Joint Venture

CSL has formed a Green Maritime Propulsion JV with HBL, holding a 40% stake in the ₹50 crore capital. This JV aims to marinize battery systems for marine applications, a segment currently reliant on imports. The venture targets a revenue of ₹640 crores by its fifth year (2031) with an EBITDA margin of around 20%. This initiative aligns with the government's Green Tug Transition Program, which aims for 50% green tugs by 2035-40, creating a significant market for marine battery systems.

Robust Order Book and Pipeline

The company's current unexecuted order book stands at a healthy ₹22,000 crores. CSL has achieved L1 status for five next-generation survey vessels for the Indian Navy, valued at approximately ₹5,000 crores, which upon contract finalization, will increase the order book to ₹27,000 crores. The defense pipeline also includes significant RFPs for LPDs (₹32,000 crores), MCMVs (₹36,000 crores), and P-17 Bravo (₹49,000 crores). On the commercial front, CSL is negotiating a repeat order for a dredger worth ₹1,300 crores and discussing four 500-passenger vessels, in addition to participating in tenders for MR tankers (₹1,700 crores) and Aframax tankers (₹2,600 crores).

Capital Allocation Strategy and Funding

CSL plans a total capex of ₹6,000-6,500 crores over the next five years for its various expansion projects, including ISRF, Vadinar, Tuticorin, and the Block Fabrication Facility. This will be funded through a combination of debt and equity, with a targeted debt-equity ratio of around 80:20. The company is also leveraging government support, including a 25% capex subsidy under the Shipbuilding Development Scheme and a 3% interest subvention from the Maritime Development Fund's Interest Incentivisation Fund, to reduce overall funding requirements and cash outflow.

Margin Dynamics and Future Outlook

Management clarified that the higher EBITDA margins observed in the past three years were largely due to nominated orders (e.g., aircraft carrier projects) and interest income from a significant cash surplus. With the shift towards tender-based defense and commercial orders, and the deployment of cash into capex, the blended EBITDA margin is expected to normalize to a conservative 14-15%. The company projects shipbuilding margins at 10-12% and ship repair margins at 22-24%. Despite a negative operating cash flow in Q1 FY27 due to export payment terms, CSL anticipates positive cash flow for the full FY27 as vessel deliveries accelerate.

FY27 Delivery Schedule

Cochin Shipyard plans to deliver a total of 10 vessels in FY27, having already completed three. The remaining deliveries include two Anti-Submarine Warfare Shallow Water Crafts by December 2026, two more multipurpose vessels, a trailing suction hopper dredger by next month, two commissioning service vessels for a Cyprus client (one by October 2026 and another by February/March), and one zero-emission container vessel by end February. This aggressive delivery schedule is critical for revenue recognition and improving the company's operating cash flow.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Capital Goods earnings calls