Net profit margins for the year are also likely to remain at 15% during the current financial year, according to the management. However, the margins seen in the ship repair segment are unlikely to sustain at current levels. Cochin Shipyard is also expecting 10-12% margins from the shipbuilding segment.
Cochin Shipyard expects the contribution of the ship repair business to decline going forward. This business is likely to report ₹1,500 crore in revenue this financial year.
The Shipbuilding segment made up for 36% of Cochin Shipyard’s revenue in the June quarter compared to 66% in the previous year. Meanwhile, ship repair made up 64% of its revenue in the first quarter this fiscal compared to 34% in the year-ago period.The company reported a positive set of earnings in the first quarter, despite sharp increases in subcontracting expenses and provisions from the previous year. Revenue for the quarter increased by 38% from last year to ₹977 crore, while its earnings before interest taxes depreciation and amortisation (EBITDA) increased 28% to ₹234 crore.
Cochin Shipyard’s order book declined 6% at the end of the June quarter to ₹21,100 crore from ₹22,500 crore during the same period last year.
Defence made up 65% of its order book, while commercial – export made up 20% and commercial – domestic and ship repair contributed 8% and 7%, respectively.
Cochin Shipyard shares ended the previous session 0.9% lower at ₹1,705.7 apiece. The stock has declined 9.1% in the past month.
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