Cochin Shipyard Q1 FY26 earnings call

Where management's figures differ from the filing

• EBITDA margin (Q1 FY26): said 28% (includes other income); filed 22.6% (excludes other income). Management's 28% ≈ ₹241.36 cr EBITDA + ₹54.33 cr other income ÷ ₹1,068.59 cr revenue = 27.7% rounded to 28%. Filed figure excludes other income.

What moved the numbers, as management explained it

• Revenue +38.5% YoY to ₹1,068.59 cr driven by execution ramp-up of the ₹21,100 cr order book across shipbuilding and ship repair segments.
• EBITDA margin of 28% in Q1 (per management) was lifted by ship repair mix including residual IAC and Vikramaditya work; FY26 guided lower at ~20% as these high-margin jobs are completed.
• PAT grew only 7.8% YoY to ₹187.82 cr versus revenue +38.5%, reflecting a high base from prior-year ship repair (aircraft carrier work); PAT margin moved from ~22.6% to ~18%. (one-off)
• Management's stated 28% EBITDA margin includes other income of ₹54.33 cr; on filed basis (excluding other income) the margin is 22.6%. (accounting)

The numbers management led with

• Order book value: Rs 21,100 crores (shipbuilding Rs 19,600 cr + ship repair Rs 1,500 cr) across 75 vessels
• Defense order pipeline: Rs 2.2 trillion (Rs 1.29 trillion at RFI stage defense + Rs 65,000 crores commercial)
• Defense bids submitted: ~Rs 10,000 crores across Next Generation Fast Patrol Vessels (18 vessels for Coast Guard) + Next Generation Survey Vessels (Indian Navy)
• Recent capex completed: Rs 3,250 crores capex cycle completed across two facilities and subsidiaries over the last ~7 years

Guidance on this call

Filed figures are summed from the company's own quarterly results for the whole period (EBITDA excludes other income); where one sits against what was guided is arithmetic, not a judgement.

Guided on earlier calls, and what was filed

Filed figures are summed from the company's own quarterly results for the whole period (EBITDA excludes other income); where one sits against what was guided is arithmetic, not a judgement.

By business

Balance sheet, capex and funding

• CAPEX: ~₹3,250 cr capex cycle over the last ~7 years across new drydock, ISRF and subsidiaries is now completed; next cycle to be invested over the next ~5 years for outcomes beyond 2030-31.
• ISRF (ship lift plus 6 workstations) and new drydock are operational and balance sheet-funded; no incremental capex committed for Drydocks World partnership at present.
• HD KSOE partnership will require further capex for new fabrication workstations aligned with merchant shipbuilding; quantum and timing not yet defined.
• Maritime Development Fund (₹70,000 cr) could provide equity or debt funding for long-term investments; contours not yet public.
• Working capital: not separately quantified on the call; investor request was deferred to email follow-up.
• Free cash: management intent is to fund the next capex cycle from internal accruals, given the recently completed ₹3,250 cr capex cycle on existing facilities.

The industry, as management sees it

Management framed shipbuilding as a strongly government-promoted industry under Maritime India Vision 2030 and Amrit Kaal Vision 2047, with multiple coastal states (Odisha, Andhra Pradesh, Maharashtra, Gujarat, Tamil Nadu) actively scouting shipbuilding clusters and potential foreign players from Korea and Japan likely to invest. CEO guided to 10–12% general industry growth over a 5–10 year horizon, with cyclicality factored in.

Risks management named

• Cyclical nature of shipbuilding industry (10–12% normal growth band vs 14–15% this year)
• Dredger for Dredging Corporation of India facing delivery delays; launch in ~1 month
• Cost pressures in steel, equipment and manpower absorbed at bidding stage
• FY26 margins compressed vs FY25 because aircraft carrier work rolls off the mix
• New-drydock utilisation not disclosed quantitatively

Not answered directly

• New Drydock utilisation percentage
• Working capital requirement
• Revenue mix interpretation (defense vs commercial vs export)
• IAC-2 timeline
• US Navy MSRA ship repair engagement
• Maritime Development Fund specific drawdown
• Offshore renewables plans

Asked for a number, answered without one

• Revenue potential from HD KSOE and Drydocks World MoUs: I am not in a position to paint any financial figures out of both these associations at this stage; maturity horizon 3-5 years.
• Profitability profile across domestic commercial vs export orders: Too general and too large a question to be answered pointedly; directed investor to uploaded presentation.
• Working capital requirement for the large order pipeline: Requested to send the question by email to the company secretary for response.
• IAC-2 timelines and developments: There are no fresh developments to report on IAC-2; unable to hazard a guess on timelines.

Every question, with its answer

1. 1. Digital shipyard roadmap

   Sucrit Patil, Eyesight Fintrade

   Question. You have spoken about defense exports, green vessels and modular construction in prior calls. Now that revenue has grown considerably, are you planning a full digital shipyard model with AI, smart sensors and modular systems to reduce build time and improve global competitiveness? Is there a roadmap to make Cochin Shipyard a global centre for smart naval manufacturing?

   Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO stated CSL will invest in modern systems on engineering and adopt digital tools on production, but is NOT moving into a fully smart / fly-by-wire smart shipyard configuration. Will take facets of 'smart' but a fully smart shipyard is not on the anvil.

2. 2. Capex prioritisation framework

   Sucrit Patil, Eyesight Fintrade

   Question. How do you decide where to spend first as CSL invests in new tech, modular yards and export plans? Is there a system to balance short-term profits with long-term growth?

   Answer, Shri Jose V J., Director (Finance). CFO stated CSL has a long-term plan aligned with Maritime India Vision 2030 and 2047, with sector-wise investment priorities. Investments are made on the merits of each case based on this long-term plan.

   Partly answered.

3. 3. MoU monetisation and timelines

   Deepak Krishnan, Kotak Institutional Equities

   Question. On the HD KSOE and Drydocks World announcements plus Maersk — at what stage are we in terms of getting anything on the ground, are we looking at building a separate shipyard with HD, and what is the medium-term revenue potential?

   Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO explained: HD KSOE engagement is largely merchant ship building using Cochin's newly completed 310m Drydock with additional fabrication capacities; Drydocks World is ship repair-focused to start with using the new ISRF. Horizon 3–5 years for these to mature; ship repair part could happen 1.5–2 years onwards. Maersk MoU aims to get one vessel repaired at Cochin this financial year. CEO declined to give financial figures for any of the three associations, calling them long-term and strategic.

   Not answered directly.

4. 4. Defense pipeline and IAC-2

   Deepak Krishnan, Kotak Institutional Equities

   Question. On the order pipeline of Rs 2.2 trillion with Rs 1.29 trillion at RFI stage for defense and Rs 65,000 crores commercial — any update on IAC-2 since the last earnings call?

   Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO said defense pipeline is strong with some projects already bid, some at RFI and more to come. Commercial pipeline represents what CSL has had interactions on, not the entire global market. On IAC-2: 'no fresh developments to report'; CSL is hopeful but not in a position to hazard a guess on timelines.

   Not answered directly.

5. 5. FY26 margin profile by segment

   Deepak Krishnan, Kotak Institutional Equities

   Question. Ship repair margins have been strong on the back of two IACs — Vikrant and Vikramaditya. Now that those are out, how do margins look for FY26 overall, and specifically for ship building vs ship repair?

   Answer, Shri Jose V J., Director (Finance). CFO confirmed: ship repair margin this year will not be at FY25 level (no aircraft carrier); ship repair revenue guided at ~Rs 1,500 crores this year. Ship building margin is around 10–12% normally. CEO added that overall PAT margin guidance is around 15%.

6. 6. JV capex implications

   Dhiraj Dave, Samvad Financial Services, LLP

   Question. On both JVs (HD KSOE and Drydocks World), do we expect further capex to be incurred or will the new JVs themselves be capexed?

   Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO stated: HD KSOE engagement will involve capex in new workstation facilities but not quantified at this stage. Drydocks World side has no further capex for existing ship repair facility (ship lift + six workstations already done), but future expansion of cooperation will require further investments — whether from CSL alone or jointly is 'early days'.

   Partly answered.

7. 7. Order book disclosure

   Dhiraj Dave, Samvad Financial Services, LLP

   Question. Suggestion to include order movement in presentations over a period (year-on-year) to give context. Also asked about order book range.

   Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO acknowledged the suggestion ('Okay. Okay. Noted.'). Order book details are in the slide; CEO did not commit to adding time-series in future presentations.

   Partly answered.

8. 8. Top-line guidance

   Naman Jain, Kotak Institutional Equities

   Question. You gave PAT guidance of 15%. Can you also give top-line growth guidance for the year?

   Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO: 'for the current year from where we were last year, we consider 14% to 15% top line growth.'

9. 9. ISRF revenue ramp

   Naman Jain, Kotak Institutional Equities

   Question. On ISRF — what asset turn or top line can be generated before additional capex to scale up ship repair?

   Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO: in initial 18–24 months, expect ~Rs 250 crores of extra revenue; at full blown utilisation, expect Rs 600+ crores.

10. 10. New Drydock potential and future capex

    Naman Jain, Kotak Institutional Equities

    Question. Similarly, can you share something on the new Drydock top-line potential? And the capex needed to double shipbuilding revenue in 4–5 years?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO said new Drydock revenue is difficult to isolate since shipbuilding output is an ecosystem output, not a single facility output. On doubling turnover by 2030–31 to Rs 10,000–12,000 crores, CSL will not need much capex to reach that level as the Rs 3,250 crores capex cycle is largely completed. Capex invested now will only show outcomes beyond 2030.

    Partly answered.

11. 11. Maritime Development Fund utilisation

    Akhilesh Gupta, Individual Investor

    Question. On the increased Maritime Development Fund of around Rs 70,000 crores announced by the government, how much of it are we going to tap?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO clarified MDF contours are not fully in public domain; it is essentially a specialist maritime financial pool — not a grant. Could come in as equity partner or as affordable-rate debt. CSL is factoring MDF into discussions but is not in a position to give exact figures.

    Not answered directly.

12. 12. ISRF and new Drydock utilisation

    Dhanraj Tolani, Individual Investor

    Question. What is the current utilisation rate of the new Drydock and ISRF facilities?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. Rajesh Gopalakrishnan (ED Ship Repair) confirmed 14 vessels under various stages of repair at ISRF. CEO: ISRF total strength is 82 ships per year; currently 14 vessels. On new Drydock — 3 vessels being built plus 1 dredger coming in for ship repair; being utilised fully but no percentage to be given currently.

    Not answered directly.

13. 13. Renewables, revenue mix and workforce

    Dhanraj Tolani, Individual Investor

    Question. Do we have any plans to expand to offshore renewables or allied segments? And what revenue growth do we expect in FY26? How do we balance domestic vs international commercial projects? Are we upskilling workforce?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO: 'No, not right away' on offshore renewables. Revenue growth FY26 reiterated as 14–15%. On domestic vs export, mix is presented in the order book slides — a balance between defense (domestic) and commercial (export). On workforce, multiple levels of skilling ongoing for workmen and capability/capacity development for officers/supervisors.

14. 14. Segment profitability and working capital

    Priyal Jain, Green Capital

    Question. Can you give a breakdown of the profitability profile across domestic commercial and export orders, and the working capital requirement for the large order pipeline?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO pushed back on the broad profitability question ('too general and too large') and asked for pointed questions. On working capital, CEO asked analyst to send most important question by email to Company Secretary for response.

    Not answered directly.

15. 15. Defense opportunities and revenue mix interpretation

    Priyal Jain, Green Capital

    Question. What opportunities do we see in India's defense push and how is the company placed to benefit? And how should investors interpret the shift in revenue mix between shipbuilding and repair?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO: CSL is operationally and financially robust, 'cautious and optimistic' — its DNA. Government policies have never been this supportive; global majors see India as collaborator; CSL is one of the most sought-after partners. FY26 top-line guided 14–15%; general industry guidance 10–12% reflecting cyclicality; 10–12% growth prospects over 5–10 years. On revenue mix interpretation — CEO declined to advise investors, said 'our job is to run the company transparently' and left it to the market.

    Not answered directly.

16. 16. 5-year outlook

    Priyal Jain, Green Capital

    Question. Where can I see Cochin Shipyard in the next five years?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO: 'Somewhere around double this turnover, strong company and very strongly alive and kicking.'

17. 17. Recurring revenue and export strategy

    Aditi Roy, Individual Investor

    Question. What is your strategy to build recurring revenue streams beyond ship building? And how significant are exports as part of long-term growth strategy?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO explained ship building is EPC, not build-to-stock; CSL scouts for orders and picks best-suited ones. Ship repair is a continually flowing market with 3-month to 1.5-year visibility and continual engagement with major ship owners. Exports are very important — specialist vessel exports to Europe and merchant vessel exports with HD KSOE. Defense ship building is 100% Indian; commercial ship building has strong export focus.

18. 18. Cost pressure management

    Aditi Roy, Individual Investor

    Question. What cost pressures are you facing in steel, equipment or manpower and how are they being managed?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO: CSL is not building to stock; it is exposed only between bidding and construction phases. Over the years it has developed experience to manage these situations, and largely considers current market pricing at the bidding stage to pass on to clients.

    Partly answered.

19. 19. Shipbuilding clusters policy

    Harsh Shah, Shree PMS

    Question. Could you throw light on the government's focus on upcoming shipbuilding clusters across the country, and how will that affect the industry and CSL specifically?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO outlined: government focused on shipbuilding from strategic, industrial, employment and MSME ancillaries angles. Multiple coastal states (Odisha, Andhra Pradesh, Maharashtra, Gujarat, Tamil Nadu) actively scouting. Expect significant industry growth; potential foreign players from Korea and Japan may invest in clusters. Too early to comment on exact impact for CSL.

20. 20. FY26 ship repair revenue

    Rupam Jaiswal, Investwell Agents

    Question. How much are we going to do in terms of ship repair this financial year given last year had two aircraft carriers? Is the repair high finished?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO: Last year had the aircraft carrier, so figures were inflated. This year, ship repair revenue expected at ~Rs 1,500 crores (vs Rs 1,875 crores last year, with the difference being the one-off aircraft carrier repair).

21. 21. US Navy MSRA and shipbuilding capacity

    Rupam Jaiswal, Investwell Agents

    Question. Cochin Shipyard has a master agreement with the US Navy. Are we expecting ships from them in terms of repairs? And what is ship building capacity in terms of number of ships?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO: Discussions ongoing under MSRA but no ship repair engagement concluded with US Navy as of today. CSL 'working towards it' but being an MSRA, cannot comment. On ship building capacity — depends on size, scale and complexity of vessels; CSL does not talk about a number; 75 vessels under contract group-wide with 50 under various stages of construction and 25 in design/engineering.

    Not answered directly.

22. 22. Design capability and DCI dredger status

    Rupam Jaiswal, Investwell Agents

    Question. Do we have design and technology capability for Panamax, FSRU, LPG or crude oil carriers? And status of the dredger for Dredging Corporation of India — completed and delivered?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO: Some capabilities available in India but it is also a measure of market/client needs. Some clients may want proven designs; CSL will look at both options but largely team up with international players for merchant vessels. On dredger for DCI — not yet completed; facing challenges in delivery timelines but vessel is at advanced stages. Launch (in water) expected in ~1 month, then a few more months for delivery.

23. 23. Defense order book and pipeline breakup

    Sachin Maniyar, 3P Investment Managers

    Question. On the defense order book of Rs 13,700 crores, can you give a rough breakup for the larger platforms? And on the defense pipeline of Rs 2.2 trillion shown in the PPT, can you give larger platforms included in bid/RFP/RFI stage?

    Answer, Shri Madhu S Nair, Chairman & Managing Director. CEO: Rs 13,700 crores defense order book = 14 vessels across two projects — ASW Corvette (~Rs 3,700 cr unexecuted) and Next Generation Missile Vessels (6 ships). On pipeline: two projects worth ~Rs 10,000 crores for which bids have been submitted — Next Generation Fast Patrol Vessels (18 vessels for Coast Guard) and Next Generation Survey Vessels for Indian Navy. RFI-stage large projects include MCMV (Mine Countermeasure Vessel), P-17 Bravo and LPD.

24. 24. EBITDA margin trajectory and product mix

    Harsh, Toro Wealth Managers LLP

    Question. In FY24 we had higher EBITDA margins of ~24%, now closer to 19%, and last year is also expected lower on changing product mix. Is there a change in mix vs FY24 as well when margins were higher? Do we expect aircraft orders again in future?

    Answer, Shri Jose V J., Director (Finance). CFO: Q1 EBITDA is 28% but full year will be lower. Year before had aircraft carrier building, last year had aircraft carrier repair — both pushed margins higher. This year, without such large projects, EBITDA around 20%. CEO added: ship repair aircraft carrier work will come in a cycle, but next aircraft carrier timeline not in a position to discuss.

Topic by topic, in the order it was spoken

In their words