Garden Reach Shipbuilders & Engineers Limited — Q4 FY25 earnings call

Call held 20 May 2025

Management summary

Garden Reach Shipbuilders & Engineers Ltd. reported its best-ever financial performance in Q4 and FY25, with significant YoY growth across revenue, EBITDA, and PAT. The company successfully maintained its robust order book at ₹22,680 crores, demonstrating strong order inflow matching revenue recognition. GRSE is also making substantial progress on key projects, with the first P-17 Alpha Frigate nearing delivery ahead of schedule, and is actively expanding its shipbuilding capacity and exploring greenfield facilities.

Highlights

  • Q4 FY25 revenue from operations increased 62% YoY from ₹1,015 crores to ₹1,642 crores.

  • Q4 FY25 EBITDA grew 101% YoY from ₹166 crores to ₹335 crores.

  • Q4 FY25 Profit After Tax (PAT) surged 118% YoY from ₹114 crores to ₹244 crores.

  • FY25 revenue from operations crossed ₹5,000 crore barrier, growing 41% to ₹5,075 crores.

  • FY25 PAT increased 46% YoY from ₹360 crores to ₹527 crores.

  • Order book maintained at ₹22,680 crores as of March 31, 2025, despite ₹5,000 crores revenue accrual, indicating strong new order inflow.

  • First P-17 Alpha Frigate is well on track for delivery within two months, ahead of contractual schedule, with 95% physical progress completed.

Key financials

2 periods

Q4

  • Revenue from Operations
    ₹1,642 Cr
    YoY +62%
  • EBITDA
    ₹335 Cr
    YoY +101%
  • PAT
    ₹244 Cr
    YoY +118%

FY25

  • Revenue from Operations
    ₹5,075 Cr
    YoY +41%
  • PAT
    ₹527 Cr
    YoY +46%
  • Operating Profit
    ₹368 Cr
    YoY +103%

What they filed

Q1 FY27: revenue up 38.5%, net profit up 44.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,153 1,271 1,642 1,310 1,677 +45%1,896 +49%2,119 +29%1,815 +39%
EBITDA69 75 221 112 156 +126%172 +129%355 +61%149 +33%
Net profit98 98 244 120 154 +57%171 +74%303 +24%173 +44%
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

₹22,680 Cr

as of 2025-03-31 quantified

0.1% YoY

Inflow this quarter

₹5,000 Cr

Execution

Comprises nine projects, consisting of 40 platforms, including 16 warships for the Indian Navy from 4 projects, three P-17 Alpha Frigates, 7 Anti-Submarine Shallow Watercraft, 2 Survey Vessels Large and 4 Next Generation Offshore Patrol Vessels.

Composition

Mix 9 projects
  • P-17 Alpha project 50.4%
  • Anti-Submarine Shallow Watercraft project 17.4%
  • Survey Vessel Large project 2.3%
  • Next Generation Offshore Patrol Vessel (NGOPV) 14.7%
  • NCPOR Ocean Research Vessel (non-defence) 3.5%
  • Acoustic Research Ship 2.1%
  • Ferry project 1%
  • Export projects (Multipurpose Vessel, Dredger etc.) 5.3%
  • 30 mm Gun project 0.9%

Share of order book by project

Pipeline

qualified rfp

Pipeline includes Next Generation Corvette, Survey Vessels, Fast Patrol Vessels, Offshore Patrol Vessels, Multipurpose Vessels, Water Jet FAC, Fast Interceptor Craft, Mine Counter Measure Vessels, and P-17 Bravo projects.

The company has successfully maintained its order book at ₹22,680 crores despite significant revenue recognition, indicating strong new order inflows. The pipeline for future orders is substantial, with several large projects on the anvil.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Rejuvenation of existing facilities to enhance shipbuilding capacity
    • Long-term lease of dry docks from other agencies in Kolkata
    As far as the yard capacity is concerned, we were having a ship building capacity to construct 20 ships concurrently. But during 2024 we have enhanced this capacity from 20 to 24 through rejuvenation of our existing facilities. And we feel this capacity itself is inadequate to meet the ongoing and the future requirements, so we have put in capital to revive some of the defunct facilities earlier held with us, and also through certain long-term lease of dry docks from one of the other agencies in Kolkata.
  • M&A SWAN Defence Joint venture · Announced

    To jointly build commercial ships of large size, leveraging SWAN's infrastructure and GRSE's expertise, on a project-specific, revenue-sharing model.

    Project-specific agreement based on revenue sharing model; terms and conditions to be concluded as projects arise.

    It is within this intent that we signed an MOU with SWAN, where we will be jointly building commercial ships of the large size. It's an MOU at this juncture, we are negotiating with few clients for orders, and once this materializes, the MOU will get translated into an actual co-production... Coming to SWAN Defence, the agreement is the project specific agreement, which means whenever a project is executed, it will be based on a revenue sharing model.
  • M&A Syama Prasad Mookerjee Port, Kolkata Joint venture · Closed

    To acquire additional dry dock facilities for ship repair and shipbuilding, separate from primary shipbuilding facilities, on a long-term lease with nominal rent and profit-sharing.

    Taken over three dry docks and one additional 125m x 25m dry dock on long-term lease with nominal rent and profit-sharing methodology. Completed nearly 41 refits in this facility.

    Coming to Syama Prasad Mookerjee Port, we have taken over three dry docks fully from this port, and we have taken on a long-term lease. We are paying them a nominal rent, and we have a profit-sharing methodology with them. In addition, we have also taken over one more dry dock very recently it's the 125 meters by 25 meter dry dock, again on a similar model. ... And so far, we have completed nearly 41 refits in this facility, including multiple coast guard ships and naval ships.

Guidance & targets

Capacity

  • Shipbuilding capacity Capacity · 2025-year end · High confidence 28 ships

    From 24-25 ships today

    And we feel this capacity itself is inadequate to meet the ongoing and the future requirements, so we have put in capital to revive some of the defunct facilities earlier held with us, and also through certain long-term lease of dry docks from one of the other agencies in Kolkata. So, we intend increasing the shipbuilding capacity from 24 to 28 ships by 2025-year end.

    — Cmde P. R. Hari

  • Shipbuilding capacity (with SPM Port facilities) Capacity · within next two years · High confidence 30 ships
    So, with the facility in Syama Prasad Mookerjee Port, and our existing facility, including rejuvenation and modernization, we intend taking it up to 30 ships within the next two years.

    — Cmde P. R. Hari

Project Delivery

  • P-17 Alpha first ship delivery Project Delivery · Q1 FY26 · High confidence within two months
    We intend delivering the ship two months from now, ahead of the contractual delivery period.

    — Cmde P. R. Hari

  • P-17 Alpha second ship delivery Project Delivery · FY27 · High confidence early next year
    And this ship we intend delivery early next year.

    — Cmde P. R. Hari

  • P-17 Alpha third ship delivery Project Delivery · FY27 · High confidence August 2026
    And the third ship has attained 54% of physical progress and this ship is planned for delivery during August 2026.

    — Cmde P. R. Hari

  • Survey Vessel Large third ship delivery Project Delivery · Q2 FY26 · High confidence July this year
    We intend delivering this ship by July this year.

    — Cmde P. R. Hari

  • Survey Vessel Large fourth ship delivery Project Delivery · Q4 FY26 · High confidence end of this calendar year
    The last ship of the project, the Survey Vessel Large i.e. fourth, has attained 77% physical progress, and by end of this calendar year, we will be delivering this vessel.

    — Cmde P. R. Hari

  • Anti-Submarine Shallow Watercraft (remaining 3 vessels) delivery Project Delivery · FY26 · High confidence during 2025-26
    And as per our current estimate, all the ships of these projects will be delivered during calendar year 2026 with four of these vessels, that is three more vessels planned to be delivered during 2025-26.

    — Cmde P. R. Hari

  • Next Generation Offshore Patrol Vessel launching Project Delivery · current financial year · High confidence two vessels
    What I would like to state with respect to the Next Generation Offshore Patrol Vessel project is that the keel of all the four ships have already been laid, and we intend launching two of these vessels during the current financial year.

    — Cmde P. R. Hari

  • Oceanographic Research Vessel delivery Project Delivery · FY28 · High confidence October 2027
    the delivery of the ship is planned during October 2027

    — Cmde P. R. Hari

  • FY26 Ship Deliveries Project Delivery · FY26 · High confidence 7 ships
    So, in 2025-26 we will be delivering 1 P-17 Alpha, 2 Survey Vessel Large and 4 Anti-Submarine Shallow Watercraft, that covers four plus two plus one, seven ships.

    — Cmde P. R. Hari

  • FY27 Ship Deliveries Project Delivery · FY27 · High confidence 7 ships
    In 2026-27 we will be delivering 2 P-17 Alpha, this is our major high value projects, 3 then the last three Anti-Submarine Shallow Watercraft, and 1 Next Generation Offshore Patrol Vessels and the Acoustic Vessel Ship.

    — Cmde P. R. Hari

  • FY28 Ship Deliveries Project Delivery · FY28 · High confidence 4 ships
    And the next year that is FY'27-28, we will be delivering 2 Next Generation Offshore Patrol Vessels, the Oceanographic Research Vessel and the Coastal Research Vessels for which we are going to sign the contract now.

    — Cmde P. R. Hari

Order Inflow

  • Next Generation Corvette project contract conclusion Order Inflow · FY26 · Medium confidence December this year (optimistic) / March next year (conservative)
    We expect very, very optimistic timeline of contract conclusion by December this year, and a conservative timeline of March next year. But, I personally feel if together over the L1 shipyard and the Navy pushes, the contract can be signed by end of this calendar year.

    — Cmde P. R. Hari

Revenue Recognition

  • P-17A revenue booking split Revenue Recognition · FY26:FY27 · High confidence 40:60
    So, if you are asking me for a proportion of revenue from the project which is going to be accrued this year and next year, I would say 40:60.

    — Cmde P. R. Hari

Profitability

  • EBITDA margin sustainability Profitability · future · High confidence maintain more or less the same margin
    So, to answer your question, we will be able to maintain more or less the same margin, it is not one off anyway.

    — Cmde P. R. Hari

What to watch in Q1 FY26

Next Generation Corvette contract signing

by December 2025 (optimistic) / March 2026 (conservative)
Current L1 declaration expected in days, contract negotiation ongoing
Target Contract signed

Why it matters

This is a high-value project (₹25,000+ crores for GRSE) that will significantly boost the order book and future revenue.

We expect very, very optimistic timeline of contract conclusion by December this year, and a conservative timeline of March next year.

Risks & concerns

  • Delays in awarding Next Generation Corvette project

    medium

    Analyst notes long delay in AON for NGC. Management explains the process of L1 declaration, negotiation, and contract signing, providing optimistic (Dec this year) and conservative (Mar next year) timelines.

    Analyst acknowledged

  • Geopolitical tensions and supply chain issues

    low

    Management states no direct impact from geopolitical tensions on supply chain, especially for export platforms, and no bottleneck is foreseen.

    Analyst downplayed

  • Delay in naval perspective plan of 200 vessels

    low

    Analyst suggests delays in naval fleet expansion. Management refutes, highlighting 61 ships under construction (60 by Indian shipyards) and numerous active RFPs, indicating no shift in focus on maritime capabilities.

    Analyst downplayed

Q&A highlights

8 direct
Opportunity in Indian shipbuilding and naval fleet expansion Direct
The Navy perhaps to a figure of +200 and Coast Guard perhaps to a figure of around 150... The opportunities are phenomenal.

Provides context on the long-term growth potential and market size for GRSE, indicating a significant expansion in naval and coast guard fleets.

Asked by Vaibhav Dalal

Order book breakup and value of pipeline projects Direct
Our order book stands at 22,680 crores and P-17 Alpha still continues to be the biggest bread earner. We are left with around 11,435 crores from P-17 Alpha project... The Next Generation Corvette project is a high value project, and here we expect, our anticipation is that the total order value could be to the tune of ₹40,000 plus crores.

Clarifies the current order book composition and provides estimated values for key pipeline projects, giving investors insight into future revenue visibility and potential large order wins.

Asked by Harshit Kapadia

Provision write-back of ₹433 crores Direct
This is linked to the P-17 Alpha project. The first ship is actually at the verge of delivery... Accordingly, the provision is reversed, and we will be this profit will be accounted over the next one to two years, when the entire project gets completed.

Explains the nature of a significant one-time financial adjustment, clarifying that it's a positive reversal of provisions due to clearer cost-to-completion for the P-17 Alpha project, which will boost profits over the next 1-2 years.

Asked by Harshit Kapadia

Peak revenue year and execution phase Direct
So, in our appreciation, the peak year perhaps could be the next year. That is financial year, the current year. What I mean is, Financial Year '25-26 could be the peak year. Thereafter, it could flat out and hypothetically, if a big project comes to us, as you rightly said, the revenue recognition from that project will start only two years down the line.

Addresses concerns about revenue peaking, with management indicating that FY26 could be the peak, but future large projects would ensure continued growth after a potential plateau.

Asked by Rohit

Greenfield expansion plans and competitive positioning Direct
Yes, to answer your question, we too are in the process, and we expect clarity on this in the next six months to nine months.

Confirms GRSE's active pursuit of greenfield shipbuilding facilities to meet growing demand, aligning with industry trends and indicating future capacity expansion beyond current sites.

Asked by Rohit

Naval perspective plan and delays in project awards Direct
So, I don't see there is a shift in focus in developing the maritime capabilities. And I have just stated the numbers, the numbers are here for you to see.

Management refutes the analyst's concern about delays and a shift in naval focus, emphasizing the ongoing construction of 61 ships by Indian shipyards and the active pipeline of RFPs, reinforcing commitment to maritime capability development.

Asked by Rohit

Agreement with SWAN Defence and Syama Prasad Mookerjee Port Direct
Coming to SWAN Defence, the agreement is the project specific agreement, which means whenever a project is executed, it will be based on a revenue sharing model... Coming to Syama Prasad Mookerjee Port, we have taken over three dry docks fully from this port, and we have taken on a long-term lease. We are paying them a nominal rent, and we have a profit-sharing methodology with them.

Details the nature of GRSE's strategic collaborations, clarifying the financial models (revenue sharing, nominal rent + profit sharing) and their purpose in expanding commercial shipbuilding and ship repair capabilities.

Asked by Divyesh Shah

Sustainability of EBITDA margin Direct
Since you mentioned one off, it has not been one off it has been similar margins over the last few times. Yes, this time we have touched a new high... So, to answer your question, we will be able to maintain more or less the same margin, it is not one off anyway.

Management confirms that the strong EBITDA margin achieved is sustainable and not a one-off event, providing confidence in future profitability.

Asked by Divyesh Shah

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Detailed narrative

Q4 & FY25 Financial Performance Highlights

Garden Reach Shipbuilders & Engineers Ltd. reported its strongest financial performance in company history for Q4 and FY25. Q4 FY25 revenue from operations surged 62% YoY to ₹1,642 crores, with EBITDA growing 101% to ₹335 crores and PAT increasing 118% to ₹244 crores. For the full fiscal year 2025, revenue from operations reached ₹5,075 crores, a 41% YoY growth, while PAT rose 46% to ₹527 crores. Operating profit for FY25 also saw a significant 103% increase, reaching ₹368 crores.

Robust Order Book and Project Progress

As of March 31, 2025, GRSE's order book stood firm at ₹22,680 crores, effectively maintaining the previous year's level despite recognizing nearly ₹5,000 crores in revenue during FY25, indicating strong new order inflows. Key projects include ₹11,435 crores from P-17 Alpha frigates, ₹3,946 crores from Anti-Submarine Shallow Watercraft, and ₹3,327 crores from Next Generation Offshore Patrol Vessels. The first P-17 Alpha frigate is 95% complete and expected for delivery within two months, ahead of schedule, while the second Anti-Submarine Shallow Watercraft has completed final machinery trials.

Capacity Expansion and Greenfield Initiatives

GRSE has increased its shipbuilding capacity from 20 to 24 ships concurrently through rejuvenation of existing facilities and aims to further expand to 28 ships by the end of 2025. The company plans to reach a capacity of 30 ships within the next two years, leveraging additional dry dock facilities acquired from Syama Prasad Mookerjee Port on a long-term lease with a profit-sharing model. Furthermore, GRSE is actively exploring opportunities for greenfield shipbuilding facilities outside Kolkata, with clarity expected within the next 6-9 months, to meet the growing demand in both defence and non-defence sectors.

Strategic Partnerships and Collaborations

The company has entered into an MOU with SWAN Defence for joint construction of large commercial ships, operating on a project-specific, revenue-sharing basis. This collaboration aims to tap into the commercial shipbuilding market. Additionally, GRSE has taken over three dry docks and an extra 125m x 25m dry dock from Syama Prasad Mookerjee Port under a long-term lease, paying nominal rent and sharing profits. These facilities have already enabled GRSE to complete nearly 41 refits, including for Coast Guard and naval ships, enhancing its ship repair capabilities.

Future Order Pipeline and Market Outlook

GRSE anticipates significant future order inflows from projects such as the Next Generation Corvette (estimated ₹25,000+ crores for GRSE's share), Next Generation Survey Vessels (₹3,500 crores), and 18 Next Generation Fast Patrol Vessels (₹3,000 crores). Other substantial opportunities include Mine Counter Measure Vessels (AON for ₹32,000 crores) and P-17 Bravo frigates (AON for ₹70,000 crores). The company expects the contract for the Next Generation Corvette project to be concluded optimistically by December this year or conservatively by March next year, reinforcing a positive long-term outlook.

Margin Sustainability and Cost Management

Management confirmed that the strong EBITDA margin achieved in Q4 FY25 is sustainable and not a one-off event, expecting to maintain similar margins going forward. A provision write-back of ₹433 crores related to the P-17 Alpha project, due to clearer cost-to-completion, will be recognized as profit over the next one to two years. This indicates effective cost management and improved clarity on project profitability, contributing positively to future earnings.

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