Cochin Shipyard Ltd

NSE:COCHINSHIP

Earnings Call Analysis

Cochin Shipyard Eyes Robust FY Margins and Growth

Cochin Shipyard Limited is progressing well with its strategic projects, achieving significant milestones such as 81% completion of its International Ship Repair Facility (ISRF) and 83% for its new dry dock. The latter is integral to the company's expansion, with a Gantry crane from Hyundai Samho Heavy Industries marking a major development. Orders are strong with an unexecuted order book of INR 22,000 crores. The management aims to surpass the pre-COVID turnover of FY '20 and expects a Profit After Tax (PAT) margin of 16% to 17% for the full financial year.

Comprehensive Overview of Cochin Shipyard’s Performance and Prospects

In the wake of remarkable operational achievements, Cochin Shipyard Limited takes pride in its progress on noteworthy defense projects, particularly the indigenous aircraft carrier, INS Vikrant, and the anti-submarine warfare shallow water craft (ASW SWC Corvette) for the Indian Navy. The former has docked for a refit, contributing INR 85 crores to the recent quarter's revenue, while the latter, a contract worth approximately INR 6,300 crores, is expected to see major advancements with simultaneous launches of three vessels.

Strategic Expansion in Shipbuilding and Recognition for Excellence

Cochin Shipyard is expanding its reputation with an order to build six general cargo vessels from a European client, the mid-life upgrade of INS Beas, and the intensification of presence across seven units nationwide. A slash in market outreach comes through an award of the Best Shipyard in the Country, affirming the company's position as an industry leader.

Impressive Financial Standing

The company's strong financial performance is showcased by a consolidated turnover of INR 1,488 crores and a profit after tax (PAT) of INR 280 crores, representing growth of 32% and 61%, respectively, from the previous year. Shipbuilding and Ship Repair segments both have seen considerable revenue increases, contributing to a substantial EBITDA margin of 20% and a PAT margin of 21% for the half-year.

Rewarding Shareholders with Stock Splits and Dividends

Cochin Shipyard has proposed a stock split to augment share liquidity and declared an interim dividend of INR 8 per share, which manifests the board's confidence in the company's stability and promises shareholders a direct benefit from its profitability.

Pursuing Growth with Ongoing and Upcoming Projects

Currently, the construction of the ASW SCW Corvette is gaining momentum. There's also new project initiation for a trailing suction hopper dredger, as well as several vessels for European clients. The company aims to fortify its ship repair and building capabilities through substantial ongoing projects like the International Ship Repair Facility and a new dry dock, targeting full commissioning by mid-2024.

Fostering Innovation and Anticipating a Strong Order Book

The company's unexecuted order book stands at a robust INR 22,000 crores, suggesting a strong foundation for future revenue streams. Cochin Shipyard also champions innovation through funding maritime start-ups, indicating a commitment not just to immediate projects but to the broader development of the industry.

Projected Financial Health for the Fiscal Year

Looking ahead, Cochin Shipyard expects to surpass pre-COVID turnover levels from FY '20 and projects a PAT margin between 16% to 17% for the fiscal year, underlining the management's confidence in maintaining the upward trajectory of the company's growth and success.

Earnings Call Transcript 2024-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to Q2 FY '24 Results Conference Call of Cochin Shipyard Limited, hosted by Kirin Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to [ Mr. Kaushal Shinde ] from Kirin Advisors. Thank you, and over to you, sir.

[Unknown Analyst]

Thank you. On behalf of Kirin Advisors, I welcome you all to Cochin Shipyard Limited Q2 FY '24 Con Call. From the management side, we have Shri Madhu S. Nair, Chairman and Managing Director; Shri Jose V J, Director Finance; Shri Rajesh Gopalakrishnan, Chief General Manager, Ship Repair; Shri Harikrishnan S., Chief General Manager, Shipbuilding; Shri Shibu John, General Manager, Finance; Shri Syamkamal N., Company Secretary. I will now hand over the call to Mr. Madhu S. Nair. Over to you, sir.

[Madhu Nair, executive]

Thank you. Good evening to all present in this conference call. I'm Madhu Nair, the Chairman and Managing Director of Cochin Shipyard Limited. And I would like to extend a warm welcome to all the participants joining us today.

I'm joined in this con call by Shri Jose V J, Director of Finance; Shri Rajesh Gopalakrishnan, Chief General Manager, Ship Repair; Shri Harikrishnan S., Chief General Manager, Shipbuilding; Shri Shibu John, General Manager of Finance; and Syamkamal N., our Company secretary.

I would like to bring your attention the noteworthy operational accomplishments during the first half of this year. Two major defense projects took the center stage during this period. First, the indigenous aircraft carrier, INS Vikrant, which docked at CSL on 29th July 2023 for undertaking guarantee refit, installation of MF-STAR and the concurrent work package agreed with the Indian Navy.

Our team handled underwater inspections, tank cleaning, painting and repair to ship fittings along with other tasks. The project contributed a revenue of INR 85 crores for the quarter ended September 30, 2023. We plan to undock this vessel on 27th November.

The second significant undertaking during this time was the construction of the ASW SWC Corvette for the Indian Navy, valuing at approximately INR 6,300 crores in total. The progress on this project has been significant, and we are targeting simultaneous launch of 3 vessels this -- 30th of this month, 30th of November 2023.

Further, we aim to lay the keel for 2 additional ASW SCW in December 2023, that is next month. And 3 others are already in advanced stages of block fabrication. These 2 projects have played a significant role in driving our revenue growth during this period. Speaking about major contracts secured during the period, our wholly-owned subsidiary company, Udupi Cochin Shipyard Limited, UCSL, bagged a major order from a European client.

The order is for construction of 6 new-generation diesel electric 3,800 deadweight general cargo vessels with an option for further 8 more vessels for the transportation of general cargo at inland as well as coastal waters in Europe. The estimated contract value is about INR 580 crores and will be completed within March 2026.

CSL also signed a contract with the Ministry of Defense for the Mid Life Upgrade and Re-Powering INS Beas at a cost of INR 313.42 crores. The estimated duration of this project is around 24 months. The project involves modernization and upgradation of various systems and equipment on board the ship to enhance its operational capabilities.

Now I would like to go through other achievements during the period, which I consider worth mentioning here. I'm pleased to inform you that Cochin Shipyard Limited has been upgraded to a Scheduled A Company. This significant development will provide us with more senior management bandwidth, enabling us to effectively manage all 7 units across the country.

CSL has also received an order for building 8 Hybrid Electric Catamaran Passenger Vessels for IWAI at a contract value of INR 129 crores. Six out of the said 8 vessels will be built at our subsidiary company, Hooghly Cochin Shipyard Limited at Kolkata. Balance 2 vessels are being built by CSL and currently in the advanced stages of completion.

These 2 vessels are expected to be delivered in December 2023 and January 2024. CSL signed contract with the Naval Ship Repair Yard Kochi, Indian Navy for Multiple Refit Contract, MRC, for naval vessels. The value of the ship repair contract is INR 80 crores.

CSL signed with Naval Ship Repair Yard Karwar, Indian Navy for Multiple Refit Contract, MRC, for Water Jet Fast Attack Crafts. The value of this repair contract is INR 34 crores. CKSRU, the ship repair unit of CSL at Kolkata successfully completed the dry docking and refurbishment of a floatel, it's a floating hotel.

The project involved more than 100 tonnes of steel renewal and was completed ahead of schedule. We delivered 4 Electric Hybrid 100-Passenger Vessels to the Kochi Water Metro. Our subsidiary, Udipi Cochin Shipyard Limited delivered a new-generation Purse Seiner Vessel to GKS Marine Exports.

UCSL also delivered 5 Deep-Sea Tuna Long Liner vessels. CSL also won a couple of awards during this period. We won the Maritime Excellence Award for the Best Shipyard in the Country during the Global Maritime India Summit. And we also won the PMA National Award for 2023 for Project Excellence.

Moving on to the financials, I would like to mention that our first half financial results were good. These results were uploaded on November 7, 2023, and I'm sure all of you would have gone through it in detail. Director of Finance, Shri V J Jose, will briefly touch upon the results for the half year.

[V. Jose, executive]

Good evening. I'm Jose V J, Director of Finance. I'll just take you through the highlights of the financials. The consolidated turnover stood at INR 1,488 crores compared to INR 1,124 crores in the corresponding previous period.

Our PBT was INR 389 crores, a substantial increase of -- increase from INR 221 crores, while our PAT was INR 280 crores as compared to INR 155 crores in the corresponding financial year. It is worth noting that the PAT for the quarter was INR 180 crores compared to INR 113 crores for the corresponding quarter of the previous year, which is -- we have registered a growth of 61 percentage.

Looking from the segment-wise performance on a stand-alone basis, Shipbuilding turnover has increased from INR 877 crores to INR 996 crores, reflecting an increase of 14%. Our Ship Repair revenue has increased from INR 245 crores to INR 402 crores, registering an increase of 64 percentage. We have achieved a strong EBITDA margin of 20 percentage for the first half which excludes other income. The PAT margin for the half year was 21 percentage.

[Madhu Nair, executive]

Thank you, Jose. The Board has approved a stock split in the ratio 1:2 and the proposal has been put to vote through the e-voting process for obtaining shareholders' approval. The voting period will end on 13th December 2023. And if approved, we expect to complete the process by end January/early February 2024.

The Board has also declared an interim dividend of INR 8 per share, that is 80 percentage, which will be paid in early December 2023.

Now let's discuss our major shipbuilding projects currently under execution. As already mentioned, the construction of the ASW SCW Corvette the Indian Navy is one of our major ongoing projects. We plan to launch 3 vessels simultaneously on 30th November 2023 and lay the keel for 2 more vessels in December 2023. The remaining 3 vessels are currently in advanced hull construction stages.

Additionally, we have taken up the project to build a 12,000 cubic meter trailing suction hopper dredger for an Indian dredging company with a project cost of around INR 900 crores. Fabrication is scheduled to commence at the end of November 2023.

For our European clients, we are currently working on construction of 2 Commissioning Service Operation Vessels with a project cost of approximately INR 1,000 crores. The fabrication process has commenced. In addition, we are building 8 multipurpose vessels for a German order, which are under various stages of construction.

We are also constructing 23 Hybrid Electric Catamaran Hull Vessels for Kochi Water Metro project, out of which 12 have already been delivered. We aim to complete the deliveries by June 2024. The company is also currently working on the construction of what could potentially be deemed as India's first hydrogen fuel cell vessel.

While this does not hold any major monitory significance at present, it is a noteworthy technological achievement that may put the company at the forefront. The vessel was launched in November 2023, and it's slated for completion in December '23/early January '24.

Now let's turn our attention to the large-scale expansion projects. First, our International Ship Repair Facility, ISRF, which has a total project cost of INR 970 crores. We have achieved 81 percentage physical progress to date with the recent delivery of the ship lift platform at the ISRF site.

Commissioning activities of the ship lift systems are currently in progress. We are on track to complete and inaugurate the facility, including the ship lift and the first 2 work stations by December 2023 with full commissioning slated for mid-2024.

Regarding our new dry dock project, which has a total project cost of INR 1,799 crores, we have achieved 83 percentage physical progress. A major milestone for the project was the delivery of the structural and other components of the 600 tonne Gantry crane at CSL by Hyundai Samho Heavy Industries from Korea. This crane is a vital component of a new dry dock.

We plan to inaugurate the dry dock by December 2023 after completion of all civil works and thereafter, full commissioning by mid-2024. I'm pleased to inform you that our unexecuted order book currently stands at around INR 22,000 crores, which is a healthy figure. This includes ship repair orders, which are typically difficult to state specifically, but as a reference, we usually have ship repair orders of approximately INR 700 crores at any given point of time.

Further, it gives me great pleasure to notify you that our company under its USHUS maritime start-up support program awarded seed funding of INR 1.7 crores to 5 start-ups through the IIMK LIVE to catalyze maritime start-up ecosystem in the country and facilitate a larger participation of the start-up fraternity in opening up the immense potential in this relatively unexplored sector.

To sum up, Cochin Shipyard Limited remains dedicated to delivering quality in all our projects and operations. We take pride in our achievements during the first half of the year and have confidence in our ability to sustain this momentum. For the full financial year, our expectation is to cross the turnover we achieved prior to COVID-19, that is FY '20. For the full financial year, we foresee a PAT margin ranging from 16% to 17%. This general guidance should offer a glimpse into our plans for this year.

I would like to conclude now and would be happy to take questions. Thank you all for your patience. Thank you.

[Operator]

[Operator Instructions] The first question is from the line of Sagar Gandhi from Future Generali Life Insurance Company.

[Sagar Gandhi, analyst]

Am I audible?

[Madhu Nair, executive]

Yes, you are audible.

[Sagar Gandhi, analyst]

Sir, congratulations on completing the large CapEx project. So sir, I have 2 questions. First is on IAC 2. So in your judgment, by when is this likely to happen? And what will be the value of this project as per your expectations?

[Madhu Nair, executive]

I would have difficulty in answering that question on both the points. But we hear from the press and also from our interactions that the project -- decision on the project going to DAC is at a very advanced stage. So I will have to rest my answer with that. And I'm not in a position to discuss project figures at this stage.

[Sagar Gandhi, analyst]

Okay. My second question is on the new shipbuilding and the ISRF facility. So while [indiscernible] 2023 and [indiscernible] by June 2024. When will these facilities start clocking or adding on the top line or clocking revenue for the...

[Madhu Nair, executive]

Mid '24 onwards.

[Sagar Gandhi, analyst]

Okay. And my last question is on cash, which we currently stands at INR 4,600 crores approximately. What is the free cash component and advances from customers of this figure?

[V. Jose, executive]

Free cash is around INR 1,000 crores and the remaining is advance from customers.

[Operator]

The next question is from the line of Deepak Krishnan from Kotak Institutional Equities.

[Deepak Krishnan, analyst]

Am I audible?

[Madhu Nair, executive]

Yes, you are audible.

[Deepak Krishnan, analyst]

Yes, I just wanted to sort of look at your EBITDA margin performance, a stellar performance of 20 percentage 1H. And now you're saying PAT margin will be 16% to 17%, whereas earlier you had indicated in the FY '23 earnings call that PAT -- EBITDA margins will be 14% to 15% for the year. So are we sort of raising the margin guidance and what sort of driven the strong performance in 1H?

[Madhu Nair, executive]

See, this year, revenues from IAC and Ship Repair. You can see Ship Repair, we are doing strong growth and the Indigenous Aircraft Carrier has also been docked and we are having a Ship Repair part in this. So largely Ship Repair is giving us better margins.

[Deepak Krishnan, analyst]

So even EBITDA should be in the similar range, 18% to 19%? Is that understanding correct?

[V. Jose, executive]

Yes, around that stage.

[Deepak Krishnan, analyst]

Okay. And of the unexecuted order of Ship Repair, which is 13 -- closer to INR 1,300 crores, all of that is sort of -- sorry, unexecuted order book of IAC, which is INR 1,300 crores, all of that will sort of come in this year itself?

[V. Jose, executive]

Out of that, around INR 800 crores will go to FY '25. Remaining will be in the current financial year.

[Deepak Krishnan, analyst]

Okay. So we may do INR 2,800 crores of top line, out of that, you're seeing that closer to INR 800 crores is coming from your IAC and INR 800 crores is coming from Ship Repair, which is both are higher margin, that's why we're expecting a higher blended EBITDA. Is the understanding correct?

[V. Jose, executive]

Can you repeat that once again?

[Deepak Krishnan, analyst]

So your total revenue guidance of INR 2,800 crores-plus for this year, [ closer to INR 2,900 crores ], higher than FY '20. So you're saying that for the full year, about INR 800 crores, INR 900 crores is coming from Ship Repair and INR 800 crores, INR 900 crores is coming from the IAC order, which are both high margins?

[Madhu Nair, executive]

Just a minute.

[V. Jose, executive]

No, total INR 2,800 crores where did you get? We didn't...

[Deepak Krishnan, analyst]

No higher than FY '20, if I look at it...

[V. Jose, executive]

It was INR 3,400 crore in FY '20.

[Deepak Krishnan, analyst]

Okay. Yes. Sorry, my bad. So it will be higher than that. Sorry, yes, so...

[V. Jose, executive]

Yes, yes, yes.

[Deepak Krishnan, analyst]

Yes, yes, yes. So yes, okay. So those are the 2 factors. Basically, higher Ship Repair and higher IAC is driving higher margins?

[Madhu Nair, executive]

Correct.

[V. Jose, executive]

Correct, correct, correct.

[Deepak Krishnan, analyst]

Okay. And how are we looking at the pipeline in terms of immediate orders that can come. I think we've locked the ocean research vessel order, but anything else that you're seeing that can be done in the estimated 6 months?

[Madhu Nair, executive]

See, the pipeline, there have been a couple of -- the [ ORB ] we lost. And there was another project also which we actually -- FPV project, the fast patrol vessel, that's also gone elsewhere. But we are okay because we never wanted it at the price levels that it has gone. But the order pipeline is still fairly strong. The immediate near-term RFP is about INR 1,400 crores of RFPs at various stages are there. And there are possibilities which we are looking at in Europe also.

[Operator]

[Operator Instructions] The next question is from the line of Darshil Pandya from Finterest Capital.

[Darshil Pandya, analyst]

Am I audible?

[Madhu Nair, executive]

Yes, go ahead.

[Darshil Pandya, analyst]

Yes. Sir, I just want 1 clarification from your end. So could you please provide an update regarding a new cycle which was there in India to construct 24 cargo ships for Russia. This happened in [indiscernible] economic forum reportedly. So is this deal done or how is it? I just want a clarification from your end.

[Madhu Nair, executive]

We are not involved in this. We are not involved in this.

[Operator]

[Operator Instructions] The next question is from the line of Viraj Mithani from Jupiter Financial.

[Viraj Mithani, analyst]

Am I audible?

[Madhu Nair, executive]

Yes, you're audible. Go ahead.

[Viraj Mithani, analyst]

Sir, my first question is on the guidance you gave, which we'll be having a top line of -- if I'm correct, 2020 with 17% net margin, that's what you said, right? Is it correct to think that way?

[Madhu Nair, executive]

Can you repeat that once again, there's a little bit of a bass coming in your voice. Can you repeat that once again?

[Viraj Mithani, analyst]

The guidance given by you, sir, was -- we will have a top line in the range of March 2020 numbers and the net margin would be 17% -- 16% to 17%, is that correct? Is it -- that's what I heard.

[Madhu Nair, executive]

Correct. Correct.

[Viraj Mithani, analyst]

Sir, my next question is, your free cash of INR 1,000 crores, how you plan to use that, sir? This would be the CapEx for this year? And...

[V. Jose, executive]

CapEx will be around INR 355 crores this year. Okay, out of that, we have already spent INR 125 crores so far in the H1. So the remaining will be used from the cash.

[Viraj Mithani, analyst]

And this INR 1,000 crores free cash would be used for further CapEx or some -- or so -- what will be the purpose of this free cash, which we have, INR 1,000 crores?

[V. Jose, executive]

Working capital and partly funding the CapEx.

[Viraj Mithani, analyst]

Partly funding the CapEx. Okay. Sir, the next question is you talked about this possibilities in Europe just to the previous participant. In which -- can you give more color on that, like it would be in the -- which side of the business and what kind of possibilities would be there?

[Madhu Nair, executive]

See, there are 2 areas where there are possibilities: one is you are aware that we have concluded a contract for 2 CSOV vessels. So that space is still looking active and we are sensing possibilities in that space. There is wind support vessels. We have continuously engaged with various companies and we expect some positive news shortly.

The other sector is a European short vessel segment, which is smaller vessels, but then always, it comes in a few numbers. And that is the kind of vessel which we have recently picked up for our Udipi Cochin Shipyard Limited, the 6 vessels which I mentioned, with an 8 option. Something similar is what we are doing in Cochin Shipyard already for the German clients, 8 vessels.

So these are all the European short-sea vessel segment. That segment also we are engaged with a few potential interest, and that also looks strong.

[Viraj Mithani, analyst]

What would be the size of the opportunity, sir?

[Madhu Nair, executive]

See, The CSOV project, a deal could be somewhere between INR 500 crores to INR 1,000 crores. And the short-sea vessel space, again, could be about close to INR 500 crores, a deal size, INR 500 crores -- that will be -- each of those vessels would be about INR 120 crores, INR 130 crores kind of a thing. So INR 500 crores, INR 600 crores kind of a 5-, 6-vessel order is what we could see on a short-sea vessel side.

But on the CSOV side, it is typically 1 or 2 numbers or maybe with a 2 option kind of a thing. So that is why I said about INR 1,000 crores kind of a thing.

[Viraj Mithani, analyst]

Okay. And sir, this the new dock which will be ready probably next year. Will we be using -- will we be leasing it or will be used for the repairs or what would be the -- until the next IAC order comes...

[Madhu Nair, executive]

Initially, we start with shipbuilding. In fact, we have already -- some of the contracts which we already secured will be executed out of that new dry dock -- but the new dry dock is a dwell purpose dry dock. So when we sense good ship repair opportunities, that also would be taken in that dock. But as you rightly said, as and when -- and we hope the second IAC, if it comes, that would also be in the new dry dock. So the new dry dock is a large dock, which has got dual use.

[Viraj Mithani, analyst]

Okay. And sir, my last question is about the green ferry. You understand the West Bengal government is quite interested. So have you -- what kind of traction are you feeling in this sector, sir? Like what could be the could be a good potential for us in years to come?

[Madhu Nair, executive]

That's for sure. Actually, the government is taking a lot of interest in what is being called as a Green Vessel Transition Program, and various entities are involved, especially the Inland Water Authority of India, multilateral funding agencies like the World Bank and others are interested.

So this is an area where we'll see more traction. But we expect that traction to be driven largely from our 2 subsidiary units, in Kolkata and in Udupi, but Kolkata could be the hub for us to drive that traction.

[Viraj Mithani, analyst]

And sir, who will be our competitors in this green ferry segment? I know GRSE is one. Apart from that?

[Madhu Nair, executive]

There could be many of the -- because when this market is opening up, we expect there could be many midsized shipyards and boatyards also coming in that space. So we see there could be many players coming in that space. But we feel the way -- at least we are seeing discussions happening over the next couple of years, there could be significant vessels considering the size and scale of the country and the requirements.

So I think most of the people should have good opportunities. It has to be a little bit technologically advanced. So it is not the run-of-the-mill vessel. Such vessels may not be there too much. And if at all it is there, CSL and our subsidiary companies may not be involved in the run-of-the-mill vessels, but a little bit advanced vessels will be key.

[Operator]

The next question is from the line of Deepak Krishnan Kotak Institutional Equities.

[Deepak Krishnan, analyst]

Sir, maybe just 1 follow-up on the margin. So I think going ahead, maybe for the years ahead, do we sort of revert back to about 15%, 16% sort of PAT margin? Or do we kind of sustain this improvement or how do we kind of look at it?

[Madhu Nair, executive]

Going forward means this financial year, next financial year, is that what you meant?

[Deepak Krishnan, analyst]

Yes, sir. Yes.

[Madhu Nair, executive]

Yes. We hope to sustain better margins over the next year also.

[Deepak Krishnan, analyst]

Sure. Maybe if I look at your, expect you immediate pipeline, if I look at the entire approval, you're saying maybe DAC comes through. How long would you believe that for IAC 2 after the DAC approval, would we be at a stage where the order could potentially come to us? Would it be an FY '25 story or do you think it's sort of...

[Madhu Nair, executive]

I can't, again, discuss that on a hypothetical basis. And again, it would be improper on my side to discuss that.

[Deepak Krishnan, analyst]

Sure. Sure, sir. And maybe any other Indian Navy order that we are targeting? Any on the destroyer, frigate, anything that we can participate in?

[Madhu Nair, executive]

See, the RFP that is already in line, yes, we are participating. But again, we are clear that there must be fairly good financials over there. That is the way we have participated. And the destroyer has not come in. The next-generation destroyer RFP has not come in. As of now, the LPD RFD has also not yet come in. We are eagerly awaiting all this.

[Operator]

The next question is from the line of Sagar Gandhi from Future Generali Life Insurance Company.

[Sagar Gandhi, analyst]

Sir, what will be the approximate value of this RFPs [indiscernible] the next-generation destroyers?

[Madhu Nair, executive]

We are yet waiting to see this, but then the LPDs were in the range of INR 20,000-plus crores. And NGC, the next-generation destroyers figure has not been really discussed, but it's much higher than this LPD figure.

[Sagar Gandhi, analyst]

Okay. And sir, as far as this CapEx projects are concerned, new dry dock and ISRF. Sir, we spent only INR 1,050 crores in new dry dock and INR 740 crores approximately in ISRF. And our CapEx for full year as guided stands at INR 350 crores. So does that mean that we will not be extending or spending the full cost as we had envisaged initially?

[Madhu Nair, executive]

Can you repeat that and -- you came in a little bit feeble. But if you can just talk more loudly?

[Sagar Gandhi, analyst]

Yes, yes. So we have spent INR 1,050 crores approximately for the new dry dock and roughly INR 740 crores for the ISRF project. Now initially, we had envisaged approximately INR 1,800 crores for the new dry dock and INR 970 crores for the ISRF. That means that we are now doing the spend only INR 350 crores for full year FY '24 and both these projects are getting completed in -- I mean until June 2024. Maybe -- I mean both this projects may be -- I mean, leaving some money on the table for Cochin as against envisaged initially?

[Madhu Nair, executive]

Yes. We can explain that to you.

[V. Jose, executive]

Actually, we'll be sending -- because the full commission will happen only in FY '25.

[Madhu Nair, executive]

No, he's talking until June.

[V. Jose, executive]

Until June...

[Madhu Nair, executive]

When you complete it.

[V. Jose, executive]

Yes, yes. It is ISRF will be almost that level -- maybe INR 20 crores less than that, will be around INR 940 crores. And dry dock because we -- originally, we envisaged 2 cranes, now we are doing only 1 crane there. So some savings may come there. So it may be around INR 1,400 crores, INR 1,500 crores instead of INR 1,799 crores.

[Sagar Gandhi, analyst]

Roughly INR 400 crores, at least INR 300 crores will be the savings?

[Madhu Nair, executive]

Yes. I would suggest conservatively, you shouldn't take that. There could be because at the end of the day, when we wrap up the projects, there are escalations -- permissible as per the contract. What Director of Finance mentioned is the main point. See, there were 2 cranes on the dry dock. We are putting only 1 crane, but that 1 crane was a little bit more costlier than 50% of that total crane cost. So we may end up a notch lower, but not to the level at INR 400 crores, you said. I would guide you towards the -- both the projects together, maybe about INR 150 crores to INR 200 crores less than those estimates.

[Sagar Gandhi, analyst]

Okay. Now sir, coming to the ship repair part. So over the last 3, 4 years, we've tried to be build facilities in Mumbai, Andaman & Nicobar and [indiscernible]. And sir, now put together all these facilities are up and running including the new dry dock, which can also be used for ship repair part. What is the maximum Ship Repair revenue we can clock, let's say, 80%, 85% utilization level?

[Madhu Nair, executive]

See, we are continuously being saying that our short term is around 2-and-odd years, 3 years kind of a thing is to go and touch around INR 1,200 crore kind of a figure. As you are aware, like the ISRF, we should have completed this a little bit more earlier. We are now in the mid of next year, even though the civil completion will complete by December.

So INR 1,200 crore kind of a figure is what we will see in about -- give it about 3 years conservatively. This year, we have gone on record our target should be better than the best we have done. So the best we have done was about INR 820 crores...

[V. Jose, executive]

INR 860-or-something crores.

[Madhu Nair, executive]

We should cross that, so around INR 900 crores or slightly thereabouts is what we are expecting for this financial year. And when ISRF also chips in next year onwards. But INR 1,200 crore crossing in about 3 years. And beyond that, I wouldn't want to really talk at this stage, but the next target would be about INR 1,500 crores.

[Sagar Gandhi, analyst]

Okay. Okay. Because until IAC 2 comes in, the new shipbuilding facility can also be used for ship repair, which is a high-margin business.

[Madhu Nair, executive]

But we have certain large projects also which we had taken into that. And ship repair, we have built up significant capacity because the current existing capacities of shipyard plus the ISRF. So we'll have to find the methods and the ecosystem to populate it and execute it well. And we are actually working on various things for that. I just could probably explain a notch on what we are trying to do on the Kochi cluster a little bit. We are not fully out in the open, but a little bit.

[Rajesh Gopalakrishnan, executive]

Yes. This is Rajesh Gopalakrishnan, Chief General Manager, Ship Repair. So as you would probably be aware, the Government of India through its Maritime India Vision 2030 had also proposed ship repair clusters along the coast of India. And since if you look at the landscape today, Kochi is hub already for ship repair with so much infrastructure and ship repair happening in the country in Kochi.

So we are just trying to see how best we can develop Kochi as a formal ship repair cluster, for which we are working towards various things like whether it is partnering, whether it is setting up more ancillaries and the overall improvement of the overall ecosystem. So we hope Kochi, moving forward, we'll actually start seeing more volume and basis which, like sir said, we could even see where to take the long-term targets.

[Madhu Nair, executive]

We are also trying to get a international partner for certain operational aspects in the new facility. We will let you know in due course, but then we are around the corner with the RFPs slated to come any time now.

[Sagar Gandhi, analyst]

Okay. No, because, sir, when we did Mumbai ship repair facility, we were thinking that it will ramp up fast. But somehow it has not reflected in Ship Repair revenues. So now because we've built a lot of good facilities, especially for the repair -- I was expecting a much better guidance from you in terms of Ship Repair for the next 2, 3, 4 years.

[Madhu Nair, executive]

I agree that Mumbai should have done a bit more better, but then Mumbai this year now, we have done INR 70 crores for this year. And the target is around INR 140 crores to INR 150 crores for the full year for Mumbai.

[Sagar Gandhi, analyst]

Okay. Sir, last question from my side is on Next Generation Missile Vessels that you -- that is currently a part of your order book. Now what's likely to be the execution timeline? And what will be the broad margin in this project approximately?

[Madhu Nair, executive]

Execution time line is the first vessel is 48 months from signing the contract, which we signed in March of this year, March 2023. And -- we are in the engineering and main equipment ordering stage right now. Things are generally going good on that project as of now. Margins -- give us some more time to come out with specific margins on that project. But largely, it fits into our normal shipbuilding mix of projects because -- it's a large contract. It is altogether INR 9,800 crores. So it gives us stability in our top line and margin process as we move forward.

[Unknown Executive]

Just a small correction on the CMSRU targets for the year. Sir, mentioned INR 140 crores, but INR 125 crores is what we are looking at.

[Sagar Gandhi, analyst]

Okay. Yes. And sir, can I ask 1 more question because I've been talking for long time? Or is somebody in the queue?

[Madhu Nair, executive]

Go ahead.

[Sagar Gandhi, analyst]

Yes. So sir, recently, I was -- I mean 1 more yard has got operational or it is likely to get operational because NCLT thing has already happened, which we all are aware, it is in the public domain. So what I could understand is there are a lot of LNG carriers which are being built globally and there is no adequate repair facility and some of the yards are also looking at repair facilities for these LNG vessels.

So is Cochin Shipyard also thinking in this direction and because it is already building new facilities, can this be an opportunity for Cochin Shipyard?

[Madhu Nair, executive]

See, our new dry dock is actually an LNG carrier-ready dry dock. It's a 310-meter long dry dock and the typical LNG vessels, except what is called the Q-Max, the Qatar-Max, all the other vessels are in the range of 174,000 to 180,000 cubic meters. That's a standard LNG parcel.

And all those vessels can actually fit into the new dry dock. And we had the LNG vessel in mind. So that's always an opportunity. But -- it's not that straightaway you can jump into that segment. But this is something which we are closely evaluating and we'll keep a growth watch on it. And this opportunity, if it's good, we will be there. That's for sure.

[Operator]

[Operator Instructions] The next question is from the line of [ Chinmay Rane ] from [ Cogent Invest ].

[Unknown Analyst]

Yes. I want to understand the executable period of your order book, current order book.

[Madhu Nair, executive]

The executable period?

[Unknown Analyst]

Of the current order book?

[Madhu Nair, executive]

See, the navel projects are the ASW Corvette and the NGMV. So 8 ASW Corvettes and 6 NGMVs. So the 14 vessels roughly -- don't hold me on to this, but roughly around 7 years.

[Operator]

The next question is from the line of [ Devesh Jawar ], who's an individual investor.

[Unknown Attendee]

Congratulations on a good set of numbers. Sir, my first question is regarding the vessel made for Andaman & Nicobar administration? Any update on finding new potential buyers on that project?

[Madhu Nair, executive]

Not yet, not yet, while there are interactions with at least 2 entities, both government I'm not in a position to disclose, but as of today, not yet. And it's a point of a little bit of concern for us.

[Unknown Attendee]

Okay. And sir, my second question is regarding the dredger we were building for Dredging Corporation of India. What is the current status of projects? And what kind of opportunities are we seeing? Are we seeing any other orders of dredges in India or in the international markets?

[Madhu Nair, executive]

On the current stage of the project which we have concluded, we are cutting steel, we are targeting 30th of this month. It would be a function, but 30th of this month is what we are looking at, steel cutting and thereafter, it goes into construction.

And your second question was opportunities. See, DCI themselves would need at least 1 plus 1 more and that is an opportunity within the country, the large vessels. But we are also seeing a larger opportunity from international market. I'm not in a position to discuss this, but we are in discussions, and it is looking good. So that segment, which is always on our radar because now we are doing this 1 vessel for DCI and in cooperation technological partnership with IHC Holland, which are world leaders in this space, it is bringing a bit of attention into that space from the international market. And we are working closely on this, but it looks good.

[Operator]

[Operator Instructions] As there are no further questions, I would like to hand the conference over to Mr. [ Kaushal Shinde ] for closing comments.

[Unknown Analyst]

Thank you, everyone, for joining the conference call of Cochin Shipyard Limited. If you have any queries, you can write to us at [e-mail]. Once more, thank you, everyone, for joining the conference.

[Operator]

Thank you. On behalf of Kirin Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.