Knowledge Marine

Knowledge Marine & Engineering Works Limited achieved a consolidated revenue from operations of ₹256 crores in FY26, marking a healthy growth of 27.36% compared to ₹201 crores in FY25. The company demonstrated robust profitability with an EBITDA of approximately ₹97 crores, translating to an EBITDA margin of nearly 38%. Profit after tax (PAT) stood at approximately ₹79 crores, yielding a PAT margin of 31%, reflecting strong earnings quality and execution excellence. Management emphasized that the focus remains on margin-accretive business opportunities rather than just revenue growth.

FY26 was a landmark year for KMEW, with the company securing new orders worth ₹1,075 crores, the highest in its history. This achievement has bolstered the total diversified order book to approximately ₹1,400 crores as of March 31, 2026. This order book is spread across dredging, charter hire, and shipbuilding, with a substantial portion carrying long-duration tenures, enhancing revenue predictability. The company also highlighted a bid pipeline exceeding ₹2,000 crores, with orders expected to materialize within the next three months, indicating strong future growth prospects.

A significant strategic breakthrough for KMEW was securing two Green Tug contracts from V. O. C. Port and Vishakhapatnam Port, totaling ₹650 crores with a 15-year tenure. These projects align with India's Green Tug Transition Program, aiming to replace conventional diesel harbor tugs with sustainable alternatives. KMEW is strategically positioned to participate in this transformation, with these long-tenure, high-visibility contracts strengthening recurring revenue streams and creating a scalable platform for future green maritime infrastructure opportunities.

KMEW is progressing with backward integration into shipbuilding, having acquired 15 acres of land near Saphale for a state-of-the-art shipyard facility. This strategic move aims to improve capital efficiency, reduce dependency on third-party builders, and capture higher value across the maritime value chain. The shipyard is designed to build vessels ranging from 10 to 120 meters in length, including mooring boats, tug boats, and survey boats. The company expects shipbuilding to become an increasingly meaningful contributor to revenue, projecting a 20% share for the current year.

The company plans a significant capital expenditure of ₹400-500 crores in FY27, with approximately ₹100 crores allocated to the shipyard and the balance for acquiring dredgers and tugs. Management noted that the capital raised through preference issues is being deployed over 12-16 months. Despite an increase in short-term borrowings to ₹114 crores for specific short-duration contracts, KMEW maintains a strong liquidity position with cash and equivalents exceeding ₹350 crores and free cash flow of approximately ₹300 crores, ensuring sufficient funds for growth and debt repayment.

Q4 FY26 experienced a temporary dip in revenue and EBITDA margins to 27%, primarily due to billing delays for two major projects (JNPA Capital dredging and Pondicherry Fishing Harbor dredging works) totaling approximately ₹60 crores. These projects involved single-stage payments upon 100% completion, with expenditures incurred in Q4 but revenue recognition deferred to Q1 FY27. Management anticipates a strong rebound in Q1 FY27, projecting revenue to exceed ₹100 crores and EBITDA margins to improve to over 40%, reflecting the deferred revenue recognition.

KMEW provided an update on its international operations, noting that the Bahrain sand mining project is currently on hold due to regional instability, with the associated vessel redeployed to India. Similarly, operations in Myanmar are inactive, and the vessel previously engaged there has been redeployed to the Port of Ghogha in Gujarat. Management indicated that international operations would resume once the geopolitical situations stabilize, prioritizing asset safety and efficient deployment.