India ▾

Sadhav Shipping Ltd — Q4 FY26 earnings call

Call held 21 May 2026

Management summary

Sadhav Shipping reported a mixed FY26 with net profit growing 25% to INR14.72 crores and EPS up 11.5% to INR9.13, despite revenue remaining broadly flat at INR97.55 crores. The company faced operational challenges, including a reduced EBITDA margin of 20% and a significant loss from an asset sale. However, Sadhav secured a robust INR400 crore order book, repaid high-cost debt, and is strategically building foundations for future growth, particularly in port services and a new shipbuilding joint venture, while navigating delays in the Odisha project.

Highlights

  • Net profit grew by 25% to INR14.72 crores for FY26.

  • Earnings per share increased by 11.5% to INR9.13 for FY26.

  • Secured an order book of INR400 crores as of March 31, 2026, with contracts extending up to seven years.

  • Repaid INR5-6 crores of high-cost loans in March 2026, expecting a drastic reduction in finance costs.

  • Entered Chennai Port as a new client and added new contracts in Paradip and JNPT.

Concerns

  • Revenue was broadly flat at INR97.55 crores for FY26 compared to the previous year.

  • Operating margin reduced from 30% in FY25 to 20% in FY26 due to higher operational expenditure and vessel mobilization delays.

  • Incurred a loss of INR36 crores from the sale of vessel Aditri, which was originally acquired for INR76 crores.

  • Significant delays in the Odisha greenfield port project due to land allocation issues from the government.

Key financials

  1. Revenue ₹97.55 Cr 0%YoY
  2. Net Profit ₹14.72 Cr +25%YoY
  3. EPS ₹9.13 +11.5%YoY
  4. EBITDA Margin 20% -33.3%YoY

What they filed

₹ Cr · quarterly
Line itemQ1 FY24Q3 FY26Q4 FY26Q1 FY27
Revenue18 28 34 31
EBITDA5 6 7 8
Net profit2 7 3 3
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
    • New vessels for port business
    • Shipbuilding and ship repair JV ₹5,000 Cr
    So we will be placing orders for new boats to be made. And that is how we are growing the port business actually. ... This venture, we are looking at about INR5,000 crores in a phase-wise manner.
  • Debt Debt disclosed
    • Repayment Repaid high-cost unsecured loans, expecting finance cost reduction. ₹5 Cr
    the raising of preferential was for not only for buying new vessels, but also for repayment of our high-cost loans. So we have done that to whatever we have promised. And so up to approximately INR5 crores to INR6 crores, we have already repaid in March 2026; which actually really eases our monthly outgo as well. ... So this '26, '27, there will not be high-cost loan is there. And it will be drastically come down our finance cost also.
  • M&A United Sadhav Integrated Maritime Private Limited Joint venture · Formed

    To set up a ship repair, ship building, and offshore supply base in Odisha.

    Sadhav Shipping Ltd holds a 26% joint venture partner stake.

    We have also formed an SPV joint venture company between the UPG group and Sadhav Shipping Ltd which is named as United Sadhav Integrated Maritime Private Limited, in which Sadhav is a 26% joint venture partner.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY27 · Medium confidence 15-20%
    So I will only mention about '27. So we are looking at about 15% to 20% increment on our current values.

    — Vedant Choudhury

  • Port Business Revenue Addition Revenue · Yearly · Medium confidence INR12-15 crores
    On an average basis, we can add INR12 crores to INR15 crores from the port business. ... Sir, I will -- yeah, approximately, yes. That is right, sir.

    — Jignesh (confirmed by Vedant Choudhury)

  • Offshore Business Revenue Addition Revenue · Yearly · Medium confidence INR75-80 crores
    And from the offshore business, we can add around INR75 crores to INR80 crores, yearly? ... Sir, I will -- yeah, approximately, yes. That is right, sir.

    — Jignesh (confirmed by Vedant Choudhury)

  • Oil Spill Response Revenue Revenue · FY27 · High confidence Flattened
    We are also expecting a flattened revenue from the oil spill response business because some of the contracts are going to be ending by the end of this year.

    — Vedant Choudhury

Margin

  • EBITDA Margin Margin · FY27 · Medium confidence 30%

    From 20% today

    Yes, sir. Yeah. It is a possible percentage you are talking, and we can achieve it also.

    — Nilakantha Sahu

Order Book

  • Order Book Value Order Book · As of 31st March 2026 · High confidence INR400 crores
    Correct. As of 31st March, we have an order book of about INR400 crores.

    — Vedant Choudhury

  • Order Book Execution Timeline Order Book · Long-term · High confidence Up to FY30 / next seven years
    This will be spilled over up to FY '30 or more its actually, sorry. There are more there are some contracts which are seven year tenure also. ... So the order book for INR400 crores is spread over the next seven years actually.

    — Vedant Choudhury

Capex

  • Shipbuilding JV Investment Capex · Phase-wise · High confidence INR5,000 crores
    This venture, we are looking at about INR5,000 crores in a phase-wise manner.

    — Vedant Choudhury

Operations

  • Shipbuilding JV Operations Start Operations · Post land allocation · Medium confidence 18 months from land allocation
    So at present, I'm not sure if I can give a time line. But from the date of allocation of land, we are looking at about 18 months, we can start the first operations.

    — Vedant Choudhury

What to watch in Q1 FY27

Odisha Greenfield Port Land Allocation

Next 18 months post allocation
Current Delayed
Target Land allocated, project initiation

Why it matters

Crucial for the INR5,000 crore shipbuilding JV and future growth in the marine services sector.

So at present, I'm not sure if I can give a time line. But from the date of allocation of land, we are looking at about 18 months, we can start the first operations.

Risks & concerns

  • Operational challenges and losses from Nigeria project

    high

    Faced significant operational issues and incurred a loss of INR36 crores from the sale of vessel Aditri after a challenging project in Nigeria.

    Management acknowledged

  • Project delays in Odisha greenfield port

    medium

    Significant delays in land allocation from the government for the shipbuilding and port project in Odisha, leading to exploration of alternative locations.

    Management acknowledged

  • High asset prices for new vessel acquisition

    medium

    Current market pricing for assets is very high, making the company cautious about speculative purchases without confirmed contracts.

    Management acknowledged

  • Geopolitical impact on operational costs and project timelines

    medium

    Geopolitical factors are increasing fuel and other operational expenditures, and delaying new business opportunities.

    Management acknowledged

  • Flattened revenue from oil spill response business

    low

    Some contracts in the oil spill response business are ending by year-end, leading to an expectation of flat revenue from this segment.

    Management acknowledged

Q&A highlights

6 direct
Fixed Assets Reduction and Asset Sales Direct
So in the year FY '25, '26, sir, we sold our vessel Aditri, which was in Nigeria. So we have taken that off our fixed asset schedule. And there was one more vessel Bali, which has been sold off for about INR2.5 crores approximately, which has also been taken off the fixed asset schedule.

Clarifies the reason for the reduction in fixed assets from INR202 crores to INR145 crores, including a significant loss on the Aditri sale.

Asked by Jignesh

FY27 Revenue Outlook and Segment Contributions Direct
So in FY '27, we are expecting a further increase in our revenues from our offshore business. and our port business also. We are also expecting a flattened revenue from the oil spill response business because some of the contracts are going to be ending by the end of this year.

Provides a forward-looking view on revenue growth drivers and potential headwinds for different business segments in the upcoming fiscal year.

Asked by Jignesh

EBITDA Margin Compression and Future Targets Direct
our operating margin reduced from 30% in previous financial year to 20% in present financial year. ... Sir, this is because of our delay in vessel mobilization and other assets. ... So EBITDA will be also improving because we are trying to minimize our operational cost. ... Yes, sir. Yeah. It is a possible percentage you are talking, and we can achieve it also.

Addresses the significant drop in EBITDA margin, attributing it to operational delays, and sets an ambitious target of 30% for FY27 based on cost minimization.

Asked by Peddi Amarnath Reddy

Odisha Greenfield Port Project Delays Partial
Having said that, we understand that there is quite a lot of delay from that side, which is happening. We are also exploring other locations in other states, actively exploring that.

Highlights the ongoing challenges and delays in a key strategic project due to government land allocation, indicating potential diversification of location strategy.

Asked by Peddi Amarnath Reddy

Shipbuilding JV Opportunity and Roadmap Direct
So we are looking at majorly with shipbuilding and ship repair, with a added benefit of having the offshore rig repair and offshore cater to the offshore market also, both on the East Coast and the West Coast also. ... Sadhav is going to be the operating partner for the entire JV for all the shipbuilding projects or all the ship repair projects that is going to be taken up or even the marine spread that is required, Sadhav will be the forefront for it.

Clarifies the scope and Sadhav's role in the INR5,000 crore shipbuilding joint venture, outlining the market opportunities it aims to tap.

Asked by Abhishek

Fleet Expansion Strategy vs. Peers Direct
So we are waiting and watching this because I don't know if you have read today's ET infra, ONGC is actually looking at outsourcing the entire work of marine logistics and shore based to a single party. So that will also put a question mark on the current tendering system that they have. ... So unless we have a contract, we'll not go ahead and buy a vessel.

Explains the company's cautious approach to fleet expansion, contrasting with peers, due to high asset prices and uncertainty in ONGC's tendering system, emphasizing a contract-backed acquisition strategy.

Asked by Arvind Singh

Cost of Debt Comparison Direct
Sir, see, last year we had taken some unsecured loan where it was --we were thinking is higher side. That is the reason we went for the preferential and we repaid that also. So this '26, '27, there will not be high-cost loan is there. And it will be drastically come down our finance cost also.

Addresses the analyst's concern about higher borrowing costs compared to competitors, explaining that recent preferential share issuance was used to repay high-cost unsecured loans, which will reduce future finance costs.

Asked by Peddi Amarnath Reddy

2 min read 6 chapters

Detailed narrative

FY26 Performance Overview and Foundation Building

Sadhav Shipping reported a net profit growth of 25% to INR14.72 crores and an earnings per share increase of 11.5% to INR9.13 for FY26. However, revenue remained broadly flat at INR97.55 crores. Management characterized FY26 as a 'foundation building' year, marked by challenges but also strategic developments like commencing the INR108 crore ONGC Canara Pride project and adding Chennai Port as a new client. The company exited the Nigeria project in September, which had presented operational difficulties.

EBITDA Margin Compression and Future Improvement Plan

The company's operating margin significantly reduced from 30% in FY25 to 20% in FY26. This compression was attributed to higher operational expenditure and delays in vessel mobilization. For FY27, management is targeting an EBITDA margin of 30%, planning to achieve this through operational efficiencies, minimizing costs, and implementing future-ready ERP systems to streamline procurement processes.

Strategic Asset Sales and Debt Repayment

Sadhav Shipping sold two vessels, Aditri (from Nigeria) and Bali, removing them from its fixed asset schedule. The sale of Aditri, originally costing INR76 crores, resulted in a loss of INR36 crores. Concurrently, the company utilized funds from a preferential share issuance to repay INR5-6 crores of high-cost unsecured loans by March 2026, expecting a significant reduction in future finance costs from the previous 9-9.5% range.

Order Book and Revenue Outlook for FY27

As of March 31, 2026, Sadhav Shipping holds an order book of INR400 crores, with contracts spanning up to seven years and some extending beyond FY30. For FY27, the company anticipates a 15-20% increase in revenues. This growth is expected to be driven by additions of INR12-15 crores annually from the port business and INR75-80 crores annually from the offshore business, while the oil spill response segment is projected to have flattened revenue due to expiring contracts.

Shipbuilding Joint Venture and Odisha Project Delays

Sadhav Shipping has formed a joint venture, United Sadhav Integrated Maritime Private Limited, with the UPG group, holding a 26% stake. This JV aims to establish a ship repair, shipbuilding, and offshore supply base in Odisha, with a planned investment of INR5,000 crores in a phase-wise manner. However, the project faces significant delays in land allocation from the Odisha government, prompting the company to actively explore other locations in different states for faster deployment.

Cautious Fleet Expansion Strategy

The company maintains a cautious approach to fleet expansion, particularly for larger assets, due to currently high market prices and uncertainty regarding ONGC's tendering system, which is considering outsourcing marine logistics. Sadhav's strategy is to only acquire new vessels if backed by confirmed contracts that make commercial sense, rather than making speculative purchases.

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

More Services earnings calls