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Garden Reach Ship Builders & Engineers hosted a conference call to discuss the performance of the company for the quarter ended Dec 2019. The company was represented by VK Saxena, CMD and Sarvjit Singh Dogra, Director Finance
Key takeaways of the call
The company has till date delivered 103 vessels for Indian Navy & Coast Guard.
The company has delivered 3 vessels in current fiscal and 5 vessels in the last 10 months. The company intended to delivery 3 more warships by end of this fiscal taking total ships delivered to 6 ships in FY20.
The company is currently executing 5 projects for Indian Navy and 1 for Indian Coast Guard (ICG) and of these six projects about three including that of ICG are going to complete by end of current fiscal.
Of the remaining three the major project is ‘Project 17Alpha' which is worth Rs 19256 crore for building 3 advanced stealth frigates. Of which the production/building of first ship is more than 15% complete and the company laid keel for the second one. The production of third vessel will commence soon.
Delivery of first ship in Proj 17A is scheduled in 2023, second on 2024 and third on 2025.
Current order book is Rs 27400 crore for building 19 warships.
As three ships are due for delivery in Q4FY20, the revenue pending to be recognised on these ships will come in Q4FY20.
Apart from revenue recognition of pending portion in 3 ships expected to get delivered in Q4FY20, the company also expects revenue from P17A project in Q4FY20 itself as construction on two ships are underway.
So the company will do better than last year. Bottom-line will be better than last year.
The diesel engine plant in Ranchi has done well with a STO of 17 crore from refurbishing navy engines.
The order tender pipeline is good. Already bid for 3 ICG projects in last 5 months i.e. RFQs for two pollution control vessels; RFQ for 8 nos fast patrol vessels and RFQ for 12 nos air cushion vessels. The company has also submitted bid for RFQs for 6 nos of new generation missile vessels amounting Rs 13000 crore. The company will be submitting bids for one Survey training vessles and 3 nos multipurpose vessels called by Indian Navy. Hopeful some of these orders will come the company's way.
The competition is between four dockyards under defence ministry, Cochin Shipyard and L&T. So six players are eligible for bidding for these projects.
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