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Garden Reach Shipbuilders & Engineers Ltd
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Ladies and gentlemen, a very good afternoon to all of you. I am Rear Admiral VK Saxena, Chairman and Managing Director of Garden Reach Shipbuilders & Engineers Limited. I extend a very hearty and warm welcome to all of you to join us today for this conference call to discuss the financial performance of the company for the fourth quarter and fiscal year ended 31st March 2021.I have with me Mr. RK Dash, the Director of Finance of the company; and also Mr. Siddhartha Ray, the Chief General Manager, Finance; and Mr. Mahapatra, Company Secretary.Well, before I brief you all on the financials of the company, which I'm sure that you would have all must have gone through, I would like to brief you, firstly, on the recent activity that has taken place during FY '21. Just to recap as to how FY '21 [indiscernible] some of you have earlier heard me what I would like to again highlight that we started with the COVID first wave. And on 21st March -- 23rd March, we had the lockdown. The first quarter was virtually a washout, and the second also had some implemented lockdowns at Kolkata, persisting an overall 81 days of the production loss. You're all aware that we are a labor-intensive, manpower-intensive industry and completely depend on supply chain with basically the platform integrators. And therefore, both these fields, both these things are badly affected. And as a result, the company suffered a loss in the first quarter.I'm not giving any excuse to our investors but simply apprising you about the ground reality and nature of our industry and what happened. But I'm very happy to inform you that we fought very strongly. We fought back the situation at that point of time. And with new strategies, strong measures and further refinement of various process, procedures and operations, we were able to improve the operational efficiency of the company as a result of that. What we achieved during the first quarter, every quarter thereafter, we have seen substantial improvement. Primarily in third and fourth quarters, the financials were much better than the corresponding third and fourth quarters of previous financial years.Against the constraint and restriction of the social-distancing laws related with the COVID-19, we succeeded delivering 3 warships to our esteemed customers. The happiest moment came to us on 14th of December when we launched our [ big ship ] -- warship, the most complex warship of the field of P-17 Alpha on the second frigate, Himgiri, 2 months ahead of schedule despite of the COVID-related restrictions and other issues. We successfully completed 2 important projects of the Indian Navy during the year 2020, [indiscernible], we delivered the fourth and the last ship, Kavaratti, to the Indian Navy; and also the eighth and the last LCU, landing craft utility ship, to the Indian Navy. And with these 2 ships, last ones getting delivered, we successfully completed the 2 important projects of the Indian Navy. On 31st of December, we commenced the production of the ASW Shallow Water Craft warship. You are aware that we have got the order for 8 in number ships construction from the Indian Navy. We began the fourth quarter and FY -- and the financial year -- I would say the new year 2021, on a very positive note when we received the good export orders, which I've been telling all of you for quite some time. We're working very hard to improve our export possibilities. And we did get the order from government of Guyana for construction of 1 in number ocean-going passenger cum ferry at a cost of around USD 12.7-odd million. And also, we got the order for 1 in number fast patrol vessel for the government of Seychelles at the cost of around USD 13-odd million. And also, we received this order for 1 in number [indiscernible] of the Mauritian offshore patrol vessel at a cost of around USD 3 million. So we have been also looking at the refit vertical, and I'm happy that we could get the refit order from the foreign country. Now this fast patrol vessel, which was -- actually, we got a contract, was already ready against the contract of the Coast Guard ship, which was diverted for the government of Seychelles. And this particular ship was handed over to the warship [indiscernible] the Prime Minister of our country, Shri Narendra Modi, to the President of Seychelles on the 8th of April. During FY '21, while we all were having a problem of the COVID, we continued working on the background on augmenting our infrastructure and resources. Finally, we did play -- have made a lot of focus on the infrastructure augmentation on various fronts. And I'm happy to inform you that the Goliath crane -- 250-ton Goliath crane, which we had ordered from South Korea [indiscernible] had finally arrived here at Kolkata. And it was a massive crane, which is weighing around 1,600-plus-odd tons. The complete structure was transported all the way from South Korea to India. And it has entered through River Hooghly. It has come in a very big ship, which was 38 meters wide. And it's the first time in the history of India that a massive structure in the form of a Goliath crane has come all the way through the difficult bends of the River Hooghly and was completely [indiscernible] as a single unit was successfully moved from the ship to the tracks of the train directly.In fact, that's so interesting operation. We have videographed it. And the great advantage is actually had it not come in the same assembled form, it would have taken 3 years. That is a long time to assemble such huge structures and thereafter, assembly and commission, et cetera. So now with the help of this crane, which is going to get now shortly commissioned by end of this month, we will be now moving very fast in terms of handling the -- our block and mega blocks in the new dry dock and the building berth. So that will help us in increasing our throughput to a great measure.We have also commissioned 2 in number block fabrication complex in the Rajabagan Dockyard unit in FY '21. And as a result of this commissioning, we can construct 8 blocks simultaneously. And with that, our capacity has gone up for the block fabrication by 28%. We also commissioned 1 in number underwater plasma plate-cutting machine, CNC plasma cutting machine. And this machine is very powerful, at the cost of INR 3.8 crores we have purchased it, installed at Rajabagan Dockyard unit. And with this, our -- the throughput of the plate cutting is going to go up by 35% or so. We have also got 1 in number 80-ton [ rail ] bridge installed at Rajabagan Dockyard so that the number of plates that is going to be now moving to Rajabagan for plate cutting and block application can be weighed directly. We don't have to waste time to bring it to main unit. So with all these efforts, the Rajabagan dock unit has become so self-sufficient that a large number of [ certification ] activity can happen there itself. It will become a very good feeder unit, [ exactly already ] happening.Apart from that, we have also taken initiative in terms of ordering the robotic flat panel welding station, AI-enabled. And also, we are -- that is structurally going to be now. We'll be completing the technical negotiation and we'll be able to procure it on a fast track. I'm also going to be ordering the product with AI-based robotic welding machines, which will be doing the erection work for us.We have also undertaken a massive store augmentation. See, with this augmentation happening, both AC and non-AC store spaces, our capacity of storage has gone up by around 2.3x primarily to meet the requirement of 15 warships material that is going to be coming to us and that is to be stored.Construction of the 6 FPV has already commenced in fourth quarter itself. Basically, I told you that 1 number of fast patrol vessel, which was there for the Coast Guard, had to be diverted to the Seychelles. So we have to build another fast patrol vessel for the Coast Guard. And Coast Guard has given the approval for that. So we have already commenced the thing. Similarly, the Guyana order which we have received, we completed design activity. It's moving on a very, very fast track, and we were expecting to commence the construction of this particular ship construction from 17th of May. But because of lockdown at Kolkata, the construction would be commencing in early June.At this point of time, we have around 5 projects with us, 3 with Indian Navy, that is 3 ships of 17 Alpha class, 4 ships of the Survey Vessel large and 8 ships of the ASW Shallow Water Craft. I told you 1 ship of the Coast Guard hospital vessel and 1 ship of Government of Guyana. So altogether, 17 ships are going to be constructed by us. We have a healthy order book of INR 25,707 crores at this juncture.In addition, I told you the impetus and focus that we are trying to give it on the refit. We have entered an MOU with the Kolkata Port Trust. And very shortly, we'll be signing the agreement on the leasing of the 3 dry docks that is going to help us tremendously in handling the refit of the ships.Now I'll just take you through the financials of the company. You're already aware about it. As regard to the revenue from operations, yes, it is down by around 20% as compared to the FY '20, INR 1,141 crores we have achieved this year, as compared to INR 1,433 crores last year. The -- because of these -- and I told you the reason that 81 days was a complete washout, complete loss of the production time. As a result of that, the EBITDA has also gone down to INR 240 crores compared to the previous year of INR 255 crores. The PBT has gone down to INR 207 crores as against INR 224 crores marginally. But I must tell you that we really worked very hard in the third and fourth quarters to bridge the gap and the -- that in particular, and we have reached INR 153 crores as against INR 163 crores in FY '20. However, I'm happy to again inform you that despite all the challenges, and I have said that we work very, very hard to improve my -- operational efficiency. As a result of that, my operating profit in the last 5 years, well, for the first time, I would say, has gone up so high it is INR 40 crores, as compared to INR 9 crores in FY '20.To just give you a glimpse of the improvement that happened in the third and fourth quarter to cover up the losses of 81 days, revenue from operations per day, if you look at that, the figures stand at INR 4.02 crores per day in FY '21 as compared to INR 3.92 crores in FY '20. However, the margins for which we have been working very, very hard towards -- because of the operational efficiency improvement, the EBITDA margin is up from 15.39% to 18.07%. PBT margin has gone up from 13.50% to 15.58%. And the PAT margin is up from 9.86% to 11.52%.We have declared a dividend of INR 1.15. And the final dividend is -- we have final dividend, and total dividend stands at INR 5 per share of INR 10 as compared to -- which is 50% as compared to INR 7.14 as compared to previous year. But I would like to once again highlight that we have been very consistent in paying dividend to our shareholders. But because of the need for investment, every investment and requirements of the CapEx, due to the crane, Goliath crane, which is INR 153 crores, we have to divert certain profits to meet the requirement of the CapEx, which you know that will be of great benefit to the company. And as a result of that, the dividend amount has gone down a bit, but certainly, we will be doing much better in the coming years. The [indiscernible] as number of days to the revenue from operations has actually shown a lot of improvement, and it stands at 57 days as against 136 days in FY '20.Now going forward, I am of the firm belief that FY '22 is expected to be much brighter and better compared to all the previous years. I expect a very encouraging growth in all our financial and operations but with a caveat that COVID second wave weakens at -- by end June. But I'm still very confident that we would be able to do much better in the coming quarters and perform much, much better. Why I'm saying so? Because of the fact that -- and hard fact which I've been reading you all the while in my previous interactions with all my esteemed shareholders, you thereof, looking at the shipbuilding, warship building cycle. We have already launched the first stealth [indiscernible] frigate in the month of December. And this ship would be shortly entering the Phase 2 of the activity that is outfitting. Similarly, the first Survey Vessel is also moving towards the launching stage. And by August, end of September, we should be launching the first Survey Vessel on the -- whole Survey Vessel which are under construction. Now these 2 ships entering into the Phase 2 of the outfitting, we'll see a large number of equipment getting lowered. So that is actually going to go -- give us a good amount of revenue recognition. In fact, all the 4 Survey Vessels, all the 4 are all under construction, and I told you the first ship will be entering Phase 2. And maybe by the early next year, that is the fourth quarter of this year, we will see the second Survey Vessel also, who would be getting launched and that would be also -- but it will be launched at much high percentage of the outfitting. So that is also going to give us a good amount of revenue.When we look at the ASW Shallow Water Craft, which is 8 ship construction order with us, I told you first ship construction already started on 31st of December. We had the plans to start the construction of the 3 ASW Shallow Water Craft in the month of May. But because of the lockdown, we will be starting the construction of these 3 ships in the month of June. So you will see that out of the 8 ships, 4 ships would be going through the construction, the Phase 1 construction in this financial year. And we hope that the first of the ASW Shallow Water Craft would lead to a good, I would say, percentage of construction by end of this financial year.The sixth SPV, that is for the Coast Guard replacement SPV, is also progressing quite well. And we expect to deliver this ship by mid of next year sometime. As regard to the ship construction for government of Guyana, I have told you that design is already happening and we will be starting the construction of the ship by early June. Once you start the -- we have already ordered all the -- most of the important equipment of the ship. So once the equipment start coming and the ships start getting formed, we expect that we can launch the ship by end of November. Once we launch the ship, in next 3, 4 months' time, we'll have most of the equipment going onboard ship. So this ship is also going to give us good revenue.We continue to focus our efforts on the export orders, whether they're big or small. And in fact, I will -- in fact, I've not been able to tell you, but yes, I have just recollected that we have also been told that we had L1 and the 1 order of the [indiscernible] fisheries where we had participated, not big order. It's around USD 3 million-odd order, but that is order on a competitor bidding against some international players. So we have been just informed that we are L1 and we are yet to receive a firm confirmation. And hopefully, if we get that, that will also add up to our export. So what we are doing that we have appointed the -- in Bangladesh, Philippines, Oman, UAE, Saudi Arabia and Seychelles for working to get the orders of the export from these countries. Let's see that our efforts are on. Let's see that how much [indiscernible]. I do hope that with the commissioning of the robotic welding station for the track panel and also the roller-type robotic welding station coming to our fold, our throughput is going to go up manyfold, the Goliath crane getting commissioned and other structural augmentation that we have already put in place. And also, we have been going ahead with the number of initiatives of the AI implementation in the design, planning, the supply chain management and the production area. I'm sure that with these things, not only throughput will go up. Our production rate will go up, but we should be able to do much better in FY '22 and beyond.As I said that the bottom line and the profit margins which we have shown despite of these COVID challenges, we already learned those tricks. The strategies have been now proven. And therefore, we will continue with these strategies for the refinement. And in the coming years, including the FY '22, we should be seeing a very good growth and thereafter.So thank you very much once again to all of you. And wishing you all the very best and hope that the company should be doing much better in FY '22 and beyond. Thank you very much, [ Jain ]. Now I'm open to the questions if you have. I'll be very happy to take on that along with my Director of Finance.
[Operator Instructions] The first question is from the line of Umesh Raut from Dolat Capital.
So sir, congratulations for better operating margin performance in Q4. Sir, my first question is pertaining to the execution of FY '21. So sir, as you mentioned in your opening remarks that the company lost around 81 days of operations because of the lockdown. Sir, I just wanted to understand, in terms of revenue, how much of -- I mean revenue we have lost because of operational lockdown as well as a few of the supply chain disruptions in FY '21.
See, the losses when we look at the -- in terms of the -- due to the 81 days of the lockdown, that has been taken as exceptional losses. And primarily, this is on account of the employee cost because nobody was there and we had to...
Almost INR 4 cores per day to around [indiscernible]
No. INR 19 crores was the cost which we had to pay for the employee cost.
[indiscernible]
Yes. Okay. I think now it's better that the Director of Finance give you answer on this.
Actually, 81 days is total we could not work, total [indiscernible]. So almost of our [indiscernible] per day around INR 4 crores. So around INR 230 crores, INR 239 crores, like that, we lost. So that around INR 300 crores -- around INR 300 crores, we have lost. And that is reflecting because we are supposed to exceed INR 1,400 crores this year. But now, it's INR 1,100 crores. So that INR 300 crores gap, we have -- we could not achieve. Of course, we have increased our per day revenue but we could not achieve that much [ still ].
Okay, okay. Got it. So sir, do you see any changes happening in terms of scheduled deliveries of ships? And I mean in your assessment, how much of LDs accordingly would be there because of -- if there is any postponement of time lines for those ships. And if at all, any negotiations proposed with the customer if -- I mean in case of waiver of LDs because this pandemic is one of the case and this can be taken as an exception.
Yes. Raut, I must tell you that as far as the COVID-related restrictions and lockdowns, the government of India has already given this exemption of force majeure of 4 months. So that is across not only to us but including our own suppliers, who are large in numbers and they're also going to get exemption against the LD. So it is whether GRSE and our own suppliers also, all of us will be exempted from the -- against the LDs, which are because of a delay. So that is not an issue on that. But certainly, the delay -- and with regard to our type of work, which is absolutely dependent on the labor and the availability of the equipment and materials, that got disrupted. So yes, there was an effect, but -- and there will be some impact on the delivery of the ships, but we all are working hard to ensure that -- how we can further bring down those delays to a large extent. It's not possible to make it 0, but we are still working hard to see that the gaps or delays that have happened can be brought down further. So that -- a lot of measures have been taken at the company end. And -- but unfortunately, you know that when we have thought that we are out of the COVID, unfortunately, the second wave has come in. And now the troubles are again in the same manner, but we do hope that it quickly goes away by end of June or so, so that we get back to normal operations and make up to the losses or other disruptions which is happening during the second wave as well.So I'm quite sure that because of the level of the construction we have achieved, although there's a delay but the level of the constructions are achieved with the launch of the ship wheel and then the [ supervisor ], which will be launching by August or September, we'll have a large number of equipment that will be going onboard ship. So once I -- in terms of Phase 2 of the construction of these launch ships, that is going to give us a good amount of revenue. So I feel that these delays which has happened because of the lockdowns, et cetera, we will -- we should be able to at least take care of all these things to some extent.
Okay. Got it. Sir, in terms of execution for Survey Vessel project, we have outsourced it L&T. So that execution is right now going on or that is also kind of under disruption this lockdown?
See, you have to appreciate that everywhere, Phase 1 had a trouble. And Phase 2 -- in fact, Tamil Nadu was, in fact, badly affected before the lockdown happened because with that, Tamil Nadu already had the lockdown and, of course, disruptions. But they are going ahead with the construction. And yes, there is some delays already there, but they have been actually assuring us that they will try to make good something, if not completely. But I think that, that delay will not be that huge, which cannot be, I would say, taken care of in terms of the last phase of trials and other things. So I do hope that these challenges in terms of the COVID things which has come will -- cannot be overcome to some extent. Their work is happening. And can they also -- the work is happening. But nothing has come to standstill.
Sir, on ASW Shallow Water Craft project, have we finalized the execution arrangement, I mean, in terms of outsourcing partners? Or how much of ships we are going to outsource out of 8 ships total?
No, this already happened, and we have already signed the contract with L&T. Four will be constructed by them. And as of now, the plan is that 4 will be built at [ yard SC ]. And I told you that the first ASW Shallow Water Craft construction already commenced. Production has already commenced on 31st of December, L&T [ Chennai ]. And the 2 ships' construction is supposed to be starting in the month of May. But because of lockdown, that would be starting in the month of June at L&T. So L&T, by June, will have 3 ships construction starting out of 4. And at GRSE, we are going to be advancing the construction commencement from August to June. So first ship on the GRSE and the 3 ships of the L&T order, 4 will be actually under construction from June onwards.
Got it, sir. Sir, in terms of order pipeline...
Sorry to interrupt, sir. Mr. Raut, sir, I would request you to rejoin the queue for follow-up questions. The next question is from the line of Arun Kejriwal from Kejriwal Research.
Congratulations [indiscernible], sir, on a good set of numbers under very, very trying conditions.
Thank you so much.
Yes. Sir, I wanted to understand. We have ramped up our shipbuilding capacity significantly. And now with the arrival of this Goliath crane, the fact that we have -- that has constructed more blocks, et cetera, would it be fair to assume that our capacity to manufacture ships in-house, excluding outsourcing, would be in excess of what we have ever done before? So if you try to put a number, it could be anywhere in the region of INR 2,500 crores to INR 3,000 crores going forward?
Yes. Mr. Kejriwal, it is to be seen in the 3 segments. The first segment is the actual marine infrastructure. That is in terms of the dry dock and the building berth. It requires on the prelaunch construction of the warships. So we already have the capacity of 20 warship constructions concurrently and with the augmentation happening in the Rajabagan Dockyard in terms of the 1 building berth coming up on dry dock was regenerated. And by 2023, '24, we expect to have this capacity going up further. So that is in terms of the physical availability of the dry docks and the building berths. Now the -- so we are, I would say, quite good and big with regard to this capacity. We can take up 8 large and 12 small to medium ship constructions concurrently.The second is actually what I have been highlighting that what more we have done is that Rajabagan Dockyard unit, which you are aware -- that is 33 acres of the area, first taken over in [indiscernible] it was a totally different unit. And except 1 [indiscernible], there was nothing big happening. Over the last 2 years, we have been working hard to do a lot of innovation and reclamation of different areas. So I have used the unused spaces in terms of creating the massive structures for the block fabrication. So these 2 complexes coming up there is going to be so great help to me. So part 2, which I told you that, is the block fabrication and direction facility, right? So RBD is going to give me the fabrication throughput. Now when you have the physical assets available but you need to have the blocks getting constructed in different areas, suddenly, you have the option to do it within your shipyard or you get it done from elsewhere, maybe like MDL is doing elsewhere at different shipyards, getting their blocks and bringing the blocks made. I have decided to do it everything in-house [indiscernible]. I have got additional capacity buildup for fabrication of the blocks. 8 blocks, I can construct concurrently. And also having the plasma plate -- underwater plate coming -- we have a machine coming up there in RBD itself. So what will happen, the plates will be directly to the RBD unit. Plates will be cut, 35% increase in my throughput and plate cutting itself. And then there will be [ steel plate ] given to these complexes where the fabrication will happen. When the blocks get constructed, they will be moved to the barge to the river. And in just 10 minutes, these blocks will reach to the main unit where the dry docks and the building births are there, where the ships are getting fabricated, assembled blocks are getting assembled to the mega block, and mega blocks are becoming in the form of the hull of the ship. So this is the second part.And third part, of course, is important. It's the augmentation of different storehouses and Goliath crane, which is going to now handle the blocks and mega blocks in a very fast pace. Otherwise, we were hiring the 600-ton mobile crane, 200-ton mobile crane to move the block on different places of the unit. So all these 3 measures are going to be a huge time saving. And as a result of that, the throughput is going to go up considerably, like we were doing 1,000 tons, around 800 tons of the blocks application in a year. Now I'll be doing around 1,500-odd blocks application in a year. So my capacity and my throughput is going to go up considerably. And as you're asking that, now I'll be constructing almost 15 ships. So I need to have this capacity in terms of block fabrication, plate cutting. The erection was happening simultaneously, and also the storage of so much of material that is supposed to be available to me, but that would have been struggling for the storage facility. So all these measures are going to be of immense help to us in terms of, overall, the efficiency in the ship construction and timing that is important for us.
The next question is from the line of Jonas Bhutta from PhillipCapital.
Congratulations on a great set of results despite the challenges. Sir, 2 questions. One is slightly data-driven. If you can give us a breakup of your sales for the full year '21 between shipbuilding and the other 2 segments that we have. And within shipbuilding, if you can tell us how much revenue got executed for 17 Alpha Survey Vessels and ASW, if any? So I'm not sure if ASW have recognized revenue this year. That's the first question.
See, the ship division is -- for FY '21 is INR 1,048 crores. The engineering division, you know that got 3 verticals. The Bailey bridge has given us INR 50-odd crores. The deck machinery and Taratala has given us INR 17 crores. And diesel engine plant at Ranchi has given us INR 18 scores. So that makes it all together INR 1,133 crores of the sales for FY '21.
And within the ship division -- shipbuilding division, if you can give us that project-wise sales.
Yes. So I'll tell you the LCU project has given us INR 31.83 crores. The Fast Patrol Vessel project has given us INR 41-odd crores. P-17 Alpha has given the highest revenue to us, INR 631-odd crores. The Survey Vessel project has given us INR 123 crores. The ASW Shallow Water Craft has given us INR 166 crores. And then of course, the modifications, et cetera, which is normally the norm, et cetera, we do is around INR 14.97 crores. So all these things put together is around INR 1,033 crores.
INR 1,038 crores.This much, this amount.
Got it. Sir, my second question was on margins. While the margins of the company have sort of positively surprised us more so than you're executing the largest share of revenues are coming from 17 Alpha, which we were made to understand was more a nomination order where you have a cost plus margin of 7.5% roughly. But we've been delivering margins well about those levels. Are we -- is this likely to continue going into '22, '23, where the outsourcing part increases? So when you see the outfitting part where your value add progressively continues to reduce going forward for the first ship of 17 Alpha, I'm sure the other 2 ships will be in progress. But -- so do you believe that margins are reflective of the shipbuilding cycle and they could go down or up from here, sir? That's my only question.
Yes. I think if you have been following me and my previous interactions, the quarter-on-quarter and also the FY '20 interactions, I've been always telling my esteemed investors that GRSE is trying its best to work towards increasing and improving the operational efficiency. And I had been answering questions with regard to the profit margins, which happens to be 7.5% per nominated project -- 17 Alpha is the largest one, but it just gives 7.5% on whatever you do. And Survey Vessel, ASW Shallow Water Craft project are on a competitive bidding. And you understand that because of competition, your margins may not be that great. But despite of all the things, I would say if you see that last year, PAT margin was 9.86%. And this year, it is 11.52%. And despite of the COVID, we have been able to implement a lot of strategies, a lot of measures, which you asked about, the outsourcing. Yes, we are doing a large number of jobs selectively through a lot of very, very strong -- our vendors who are there who are doing the operating work for us, noncore activities, of course. And because of that, we have been able to reach to this profit margin. But normally, you know that in warship building because of numerous imponderables, challenges and other difficulties which you cannot foresee, I would say keeping the margins well above 10% is going to be really tough but interesting. And I'm quite sure that in coming years, we should be -- maintaining this thing will not -- will be a tall order to talk about that. And certainly, we may or may not. But certainly, I'm sure that we will not allow the team to come down less than 10%. So 7.5% -- even if I moved to 8%, 8.5%, now I have come to see that it has now gone to 11.52%. So if I'm able to maintain continuously above 10%, that will be quite good as for the warship building industry and the norms are concerned. I hope it satisfies you.
Yes, sir. All the best, sir.
[Operator Instructions] The next question is from the line of Mohit Kumar from DAM Capital.
Sir, first question is how is the order pipeline looking at this point of time and which are the orders you think will get finalized in FY '22 and FY '23? That's my first question.
Yes. So as of now, I told you that our order book is quite healthy. That is INR 25,707 crores. And at this juncture, we do not have any visibility in terms of some bid opened up where we are L1. So therefore, I can't say that in this financial year we will have anything getting signed as far as the Indian Navy or the Indian Coast Guard orders are concerned. But I'm hoping that maybe whenever the bid gets open for the other projects, we may see the results. And based on that, only [indiscernible] can be taken. But to answer your question, this year, as of now, nothing is visible to me.
And sir, FY '22, FY '23, let's say, a slightly medium-term horizon, which are the projects which you think that will be -- that will get finalized?
Yes. If I see that, Coast Guard SPV contract or the 12 ocean vessels and then also the cadet training ship of the Indian Navy. So these are the projects -- in case the bid gets opened up in this year, financial year, most likely either by end of this financial year or maybe the next financial year itself, the contract could be signed, depending on who wins it.
Understood, sir. My second question is, sir, out of this, anti-shallow, the water craft...
Yes, yes. ASW shallow...
Yes. ASW Shallow Water Craft and the Project 17 Alpha, are you going to outsource a large part to L&T? And if -- is that number too high for L&T? And have you signed the contract to L&T already?
See, let me tell you that as far as 17 Alpha is concerned, which is the biggest of the ships amongst all the projects, it is all being done. All these ships are being made in-house in the GRSE and utilizing fully each and every square feet area of the shipyard. So entire thing is going to be done in-house. And of course, we saw for 17 Alpha also, a lot of work is being done by the outsource contractors, the outfitting work, the fabrication work, erection work and other things that are happening. As far as the Survey Vessel and ASW Shallow Water Craft projects are concerned, we have outsourced the hull construction of these ships to the L&T, 3 Survey Vessels and 4 ASW Shallow Water Craft. This has been done on a, I would say, limited tender basis where we have done a due diligence, a lot of evaluation on the capabilities and capacity of the shipyards. And L&T became the L1, not that has gone on a nomination basis, but they have emerged as the lowest bidder for construction of those kind of tendered quantity of the ships for Survey Vessel and ASW Shallow Water Craft. And we believe that they have good capacity. They have a good shipyard, and they should be able to meet our requirements and time schedules. Of course, the COVID-related challenges are there for everyone. But given the credibility, I think they are good partners for us and we expect a good throughput from them for the construction.
What is the approximate order value which you have given to L&T?
The L&T for the Survey Vessels, we have given around INR 176-odd crores for the hull construction and reaching up to certain percentage of the construction for all the 3 ships. And ASW Shallow Water Craft is also in the range of around -- no, it is around INR 200-odd crores -- INR 250-odd crores, something like that.
The next question is from the line of Bhagyesh Kagalkar from HDFC Mutual Fund.
Yes. So this is -- we have clarified on certain details of the order book process for the next 1 year. But already, order book is INR 25,000-odd crores. And you'll be [ using ] this in due course of time in 3 to 4 years. Beyond 2 years' time, what are the big orders which you feel you should try for in India or overseas?
There are some RFPs which are still there for the Indian Coast Guard and Indian Navy. I told you that construction of the cadet training ships and the RFP, which will be replying back or submitting our bidders for the construction of 11 new-generation offshore patrol vessels for the Indian Navy. So these are the big orders and also the orders for the Coast Guard for construction of -- with hospital vessel and, well, a number of ocean vessels which are there. It's like basically hovercraft. We have already built 6 hovercraft for the Indian Coast Guard, and we have bids for these ACVs for the Coast Guard. And also, I must tell you that refit has been also an important vertical for us. And we have already received one refit order from the foreign ship -- foreign country. That is already happening here. And refit, whatever opportunity will not come within India for the Navy and the Coast Guard, really pitching very hard. I've told the investors that we are taking on lease. Shortly, we'll be signing the lease document for having 3 dry docks at the Kolkata Port Trust. It is basically aimed at augmenting our capacity further to take on the refits. So refit is going to be my biggest area as one of the verticals that is going to give us good revenue.
Can you quantify...
So these are the kind of plans that we have in hand. Apart from the huge order book, which I told you INR 25,000 crores, now the cycle starts going upward from here on. Despite of COVID or whatever we did well in our -- you see the margin. And there's no way out that we should not perform better than last so many years. This year is going to be the beginning of the upward curve and a very good measure. And all the margins and all the things is going to be, I would say, good for the company and good for the investors.
So, just to interpret. Can you quantify how much of bidding you will do orders for INR 8,000 crores or what? Because earlier understanding that you're bidding for INR 18,000-odd crores, of which INR 10,000 crores has gone to Kochi ship for that in GMV. So is this INR 8,000 crores further of orders the bid or it is further more than that? I'm asking for the overseas orders also, where you would like to bid?
Overseas order, let me tell you...
Is it a liquid opportunity?
Yes. It is -- again, I would say that this particular order is something I'm specifically looking. As far as the foreign orders are concerned, as and when the opportunities are coming up, we are bidding. And normally, these orders are not simply based on the normal bidding, but there are a lot of international and diplomatic issues are involved in that. So that is one aspect of it. But here, the order for the NG OPVs, that is a fairly a big order, and around INR 4,500-odd crores would be the likely order value because there's going to be split between the 2 shipyards. 7 will be by the L1 shipyard and 4 will be by the LP shipyard. So we are hoping that we should become the L1 shipyard. And of course, the Coast Guard returnship is in the excess of around INR 1,000-plus-odd crores, INR 1,200-odd crores is the cost of the returnship of the Indian Navy. And these orders of the Coast Guard could be not more than, I think, more than around INR 1,300-odd crores. So this is the kind of range. In the immediate future, we are looking at, we're expecting the RFP that should come out from the Indian Navy for the construction of new generation Corvettes. You know that the Corvettes has been our forte, and we have made the Corvette for the Navy, both ASW Corvettes for the numbers and...[Foreign Language] Yes. There was some disruption. Can you hear me?
Yes. I can hear you, sir.
And of course, the 16 number design Corvette, which are made for the Navy, so 6 plus 410 Corvettes were made. So we are keenly awaiting for the RFP for the new generation Corvettes to come out from the Indian Navy. And we will try to bid for it and see to it that we must get this order. So that is what is our preparation endeavor is.
So the refit opportunity, can you roughly quantify how it will shape up for the next 3 to 5 years, the refit opportunity you mentioned since you are leasing so larger parcel from the ports, et cetera?
As far as the new generation Corvettes, I cannot immediately get...
I asked from the repeat opportunity you're seeing for that refit?
See, opportunities in India, there are some ships. In fact, we have just bid work for and number ship, cargos, which was made in GRSE itself. This is LST Learnings ship, tank ship for the southern navel command and the tender had come out, and we have submitted a bid, which is in a range of around INR 200-odd crores plus, minus I can't tell you the figures exactly, but there is a big refit order. And likewise, the Coast Guard and some other orders of tenders will be coming out. So refit is something, which you should see that it is not that like ship construction. The result will always be in the range of INR 200 crores, INR 100 crores, INR 50 crores, INR 30 crores depending on the small refit or a medium refit or a big refit and size of the ships. But this is -- provides you a good opportunity of having good profit margins and without investing any capital except or any other thing. So the refit is always a good thing, as we must have seen in the case of CSL, where they have actually focused a lot from last so many years. Refit was there, always a greater focus area. Shipyard never focusing on a refit. In the last 2, 2 years or so, we have been started the vertical, and we started focusing on the efforts, and results are there in front of us that we have now got the order from the foreign country. And we are now bidding with a dedicated kind of attention and focus. So we do hope that in the times to come, we should be looking at the refit orders as well, which will give us a good profit margins.
[Operator Instructions] Next question is from the line of Hardik Jain from White Stone Financial.
Congratulations for a good result in such tough times. Sir, you mentioned in your answer to one of the questions that we'll try and maintain our profit margins, profit after-tax margins about 10%. I just wanted to know, sir, because in recent past, the commodity costs have...
This is the conference operator. There is a slight disturbance coming from your line.
Okay. Is it fine now?
Yes. I can hear.
Yes. I understood the commodity costs have really increased sharply in recent past, especially the steel prices, which is almost doubled in last few months. So how does it impact our margins or we have -- we already secure and hedge our commodity requirements in advance? Can you please throw some light on this?
The line for the management is disconnected. Kindly stay on the line until I reconnect them. [Technical Difficulty] Ladies and gentlemen, we have the management line reconnected to the call. Thank you, and over to you, sir.
Yes. Sorry, sir. I'll repeat my question again. I just wanted to know, sir, because the commodity prices, especially the steel prices have increased very sharply in recent past. So in that manner, how do you manage your commodity cost?
I got your question. Let me tell you the -- in warship construction, the cost of the steel, which we talked about is not huge as compared to any other kind of commercial ships, where the 80% of the cost of the vessel is largely the steel per se and the rest all is the equipment. But here, the majority of the cost of the ship is, I would say, around 75% is almost depending on the complexity of war ship is also equipment and material. When I say material, it is not the steel. Steel is just a fraction of 4% to 5% of the cost of the entire ship. And that to this is a war ship grade steel, which has been manufactured by the, I would say, the sale and/or DSR, largely the sale. And we have for the rates, et cetera, well defined, and there are mechanisms where we are able to get to the good prices. And we have not seen any impact and effect. We have the rate contract with them. So there's hardly any impact. And the quantity is such that we have not really seen any impact as of now. And as far as the equipments are concerned, there's all on, I would say, the missiles or all the guns and also electronics and all control systems and all those kind of things. So we do not really have much of the impact of all these commodity sizes.
Right. And sir, second question is, in this quarter, the project-related other expenses increased from INR 10 crores in last quarter to INR 39 crores, and other expenses also increased from INR 24 crores to INR 44 crores. So if you can present live what would be this regarding?
I couldn't get you the last thing. It was some disruptions were there. Can you just..
The project related expenses increased from INR 10 crores to INR 38 crores in this quarter. Other expenses also increased from INR 24 crores to INR 44 crores from Q3 to Q4.
Actually, this other expenses, this is one -- mainly one provision of numerous contract. That's around INR 11.75 crores, because of that, the sections have gone up. This Is one time.
And in other -- in project-related expenses?
No. No, it is only on one project.
No. The project-related expenses went up from INR 10 crores to INR 40 crores.
The expenses that I told.
Projected-related expenses, whatever you have seen by increase in fourth quarter, we have an element we can share. They are pro forma and that [ MDL ] system and shipyard that this expansion we have done in this quarter. That's why this amount has increased.
Well, we don' have it this quarter. Basically, we have that [ 17 ] of it is being excluded with the big shipyard MDL and we are also partnering with the MDL. So 4 shipyards making and 6 we are making. So there are a lot of common procurement, which are generally done. And there's a system called Project Monitoring System. It is called PLM, life cycle management kind of software. It is a very costly software. So we have to share the thing, and we have to give them that kind of a cost to ship beyond.
So this provision is made this time and this will not occur again?
Yes. Yes, It is a provision.
The next question is from the line of Jain from [indiscernible].
Sir, my first question is actually just a follow-up on the previous participant question. So I just wanted to confirm. You said the other expenses have increased from INR 10 crores to INR 38 crores because of INR 11 crores provision. Am I correct, sir?
Yes. Yes, INR 11.7 crores.
Okay. Okay. So then can you also throw some light, even our other expenses have increased from INR 25 crores to close to INR 44 crores and INR 45 crores. So can you explain and like just throw some light why this cost has increased?
Just give me half a minute. My team is looking at that outside this.
Sure. Sure. Okay. So sir, can I go on to my next question until that time, sir?
Yes.
Okay. Sir, my other question was, sir, are we expecting any LDs? And then, FY '22, are we planning to provide anything for it?
Yes. In this financial year, of course, we are supposed to be having a delivery of the first Survey Vessel. But because of the COVID-related restrictions and other issues, there is a acknowledged delay, a port measure of 4 months plus from the government as well as [ MOD ]. So they -- so on paper, we undertake provisions, but this will be eventually waved off, and we go for the delivery of the ship and when we submit our justification. So we want to take some low new kind of provision, not entire thing, but no provision we've actually just taken. And I think that would get squared off.
Sir, can you quantify that number if its possible?
Which number?
The provision that we will be looking for?
Question #2, which you asked, Ramesh here is telling you.
Yes. This year, this quarter, INR 370 lakhs were made corporate social responsibility provision and R&D provision around INR 503 lakhs, so INR 5 crores. And the provision for obsolete in inventory, yes, would have to the extent of around INR 240 lakhs. Inventory, that was absolute in the nonmoving inventory, that provision met.
Okay. Because I believe -- sorry, sir. Go ahead.
Okay. I hope that you got the answer?
Yes. Yes. Sir, can I just squeeze in one last question?
Yes.
Okay. Sir, I wanted to understand on a refit segment, what kind of revenues or what kind of revenue contribution are we envisaging from the refit segment, say, in next 2 or 3 years? Because we are trying to pursue this a little aggressively, which is very good. So -- but if you can just throw some guidance as to what kind of contribution from -- in revenue are we expecting from there?
See, madam, I must tell you that vertical, we just started, I would say, we commenced our focus on the refit vertical just, I think, 2 years back. We were getting very small refit. This is USD 3 million worth of the refit we got it from Government of Mauritius for their offshore petrol vessel. But as I said that we have now been bidding aggressively for trying to capture orders from the Indian Navy and Indian Coast Guard. So while we have put in place some systems, we are further going to be making it more stronger and -- but at this juncture, to tell you lastly, I'm actually trying to target around INR 75 crores to INR 100-odd crores for now refit. That would be a minimum that should come to us. Okay. And that will contribute to up 5% to 10% of the revenue from operations, but segment in the refit part. So therefore, that's what is my target. And depending on the [indiscernible] coming up, we will be trying hard to look at these verticals.
The next question is from the line of Abhijit Mitra from ICICI.
I think, again, it's a data question. First, congrats for a great set of numbers. Just to sort of understand the execution schedule for P-17 Alpha and ASW shallow water craft for the next couple of years, because this year has been disrupted by the nonoperating days. How do you see the execution moving ahead? And with increasing mix of ASW, do you see a margin headwind coming through -- operating margin headwind coming through?
Yes. As far as the execution of all the projects of the Navy is concerned, I told you that there are total 15 ships are there. And all the 37 user projects are under construction. And the first shift, I've informed you all that has been launched, and that will be now getting into the Phase 2 of the outtrading. That means a larger number of the equipment are going to get lowered onboard the ship. That means it will be now reaching towards a steadily and towards a maturity of the outputting work. The second 17 Alpha ship, which is supposed to be lagging by around 1.5 years of their time, as for the contract, is also under construction. And as per the schedule, it is supposed to be launched by mid of next year. That is launched by July or so by next year, but we are planning to be launching the ship ahead of schedule again. So -- but this trend, the second ship will be launched with more and more outfitting happening. Like first ship launched with around 23% outputting done, but this ship -- second ship will be launched with 35% outputting. What does it mean? It means that a larger amount of equipment, larger amount of plumbing, cabling, paneling and so many other things will be happening. So that means that much of a revenue determination would be happening. And the third ship of the 17 Alpha, the key. One thing we learned, that means 1 big block has been constructed and put a building bus. Rest of it are under construction at different places in the units of the GRC. So at this moment, 17 Alpha is actually picking up the pace. And the first ship, I hope that will be giving us a good revenue. 17 Alpha Is giving our highest revenue. But the revenue coming through the 17 Alpha is going to go up much, much higher in this financial and thereafter. Survey Vessel large projects, I informed you that first ship, we plan to launch it by [ I think ] by the August or September of this year. And that is also going to be launched by around 35% of outputting. And thereafter, we should be going through the installation of a large number of equipment on the first Survey Vessel.Finally, the first ship that is second, Survey Vessel at L&T. That means the first Survey Vessel of the L&T will be also getting launched by December or January. So Survey Vessel project is also going to be giving us good amount of revenue. And the construction is virtually going to be going on at a good pace. The established shareholder's informed all investors that in this financial year, there will be at least 4 [ ASW ] shareholder that, that will be under construction. Yes, we had the impacts of the COVID. We have to wait and watch impact of the second wave, how long it persists and what will be the impact. We are already seeing everyday on the TV. And yes, we can see the situation on ground here also. And the norms for the social distancing and safety precautions have only increased considerably. So therefore, we are hoping that by June and the second wave should subside, and we should be able to pick up. So generally, the progress of the project at this point of time are, generally, to my mind, are not, I would say, out of control. But yes, we aren't confident we should be able to handle the troubles, which we have faced and make up in the coming years.
Yes. Will there be a substantial jump in '22 over '21? Or it would be sort of incremental jump. And then we '23...
Yes. I'm quite confident.
The next question is from the line of Parimal Mithani from Credential Investments.
Yes. This is regarding to the Survey Vessel. If I'm correct, the entire project is to be completed by 30th April, 2023. And if I remember correctly, until now, we have booked close to the trending order value of Survey Vessel is INR 2,237 crores odd. And as mentioned by the agreement, you're supposed to deliver the 2 in a gap of 6 months, which is for the agreement. So is it possible that we could see a good amount of revenue in the current year coming from Survey Vessel and next year also, because the INR 2,000 crores has to be done over the next 2 years, basically?
Yes. You're absolutely right. Yes. We had the troubles of the COVID-related impact. And whether in my first ship, that is getting constructed at the GRSE. And the 3 ships, which are under construction at L&T, both of us had the challenges and the troubles. We hope that with the launching of the first ship at the GRSE by August or September, we expect to have a large number of equipment that is going to be going onboard ship. And by end of this financial year, we should be recognizing a substantial amount of revenue on the first shift itself. And similarly, on the L&T, the first ship at L&T of Survey Vessel also, we hope that normally with us around 5-, 6-month lag was there. So the contract is supposed to a 6-months lag. So we hope that this lag, we should be able to still contain and bring it down to less than that. So by December to January, there will be a technical launch at the L&T also. And with the launch, we expect a large number of equipment will be going onboard ship. And you know that when the moment equipment start going, as of now, the hardest completely see the steel. But equipment on the first ship, we also started by next month onward after the lockdown opens up. I've got a lot of equipment already ordered. And while there was a disruption in the supply chain and a lot of vendors have asked for the post measure. But the good news is that they have also tried to minimize the delays. A large number of prelaunch equipment have already been either delivered or by June or July, they will be coming. So we'll be lowering all those equipment, like main engines, gearbox, the diesel alternators, the shaft things and the propellers, the stabilizers and so on and so forth. So both the first ship of the GRSE and also the first ship the L&T, a little later, these things will go. In this financial year, I will see a good amount of revenue that is going to be coming from the Survey Vessels.
So it could be -- and already you have INR 1,000 crores odd, if I can, because we have the order value at only INR 2,000 crores order remaining to be depicted over a 2-year period.
So if you see the -- I've been briefing all of you in the shipbuilding cycle. So these 2 ships will be entering into the Phase 2 of the shipbuilding cycle. So around 65% of the value of the ship will get recognized by the, I would, think, 3/4 time of the ship build period. Okay, it's not that entire amount will get booked. Because once the equipment gets lowered, thereafter, they are acquired to be characterized. The setting, testing, tuning and trials will have to happen. So there will be a, I would say, steep decline in the revenue once it reaches around 60% to 65% of the construction. So I hope that a good amount of revenue and the Survey Vessel is going to be coming up because of the ship construction cycle.
And sir, the second question is in terms of [indiscernible] coming in now, and you seem to mention that you're going to commission within a month's time from now. Is it end of this month...
End of this month.
Yes. And commissioning at the end of this month, the Project-17 Alpha, which last year, the value of production was INR 754 crores, INR 631 crores were exited going forward from you?
See, let me tell you the value clain is going to help me in block assembly, block movement. No block, as such is what it's a steel. Steel can give you only as much of the amount. But certainly, it is going to speed up my assembly of the ship. The moment ship get assembled and it becomes a company body, that is going to help me to have the lot of equipment to be lower conversion. So certainly, the goliath crane is going to be a good boost to us in our entire throughput. And hence, the large number of equipment are now -- the one ship is already put into -- the first ship has been again put into the data just to make sure that under the goliath crane, which is going to be commissioned, a lot of big, big equipment will get lowered in the ship. And because of that, by the revenue, the revenue of ship is going to be tremendously high. But there's what is going to be happening with the goliath crane that is coming up. So many of us will get a big boost because of the goliath crane.
So sir, basically you're just modeling that I just wanted -- means this year, in the current year ending, the Survey Vessel as well as the project, 17 Alpha, will have a big contribution from this year onwards, right, if I'm to assume that?
Yes. I have said that you just take my kind of input that from hereon, I've been saying that COVID or no COVID, we had the impact of the COVID. We have the second wave, but I'm very, very optimistic the way the shipbuilding cycle is already happening, although the challenges are there. But there's no other way because the moment ship is launched, you have to lower the equipment. You have to lower the various items. At the moment, the big-ticket item goes onboard ship will have high revenues. So the 17 Alpha, okay. And the Survey Vessel, including the ASW Shallow Water Craft is going to be kind of happening at L&T. There's also going to be happening at the GRSE. So actually, they all, cumulatively, are going to add up into my revenue. So therefore, you will see a much better revenue that is going to be coming this year than the previous years.
Okay. And sir, the last question is -- and I think there's an offer for sale, which is pending on your -- by the government. Any further update? Or are you any other [indiscernible]?
I don't have any update as of now. We are all waiting and watching for it. Let's see.
The next question is from the line of Ashok Damani, an Individual Investor.
Congratulations, and I hope all of you are safe in Kolkata. I know it's pretty severe out there. Sir, 2 quick questions for you. I wanted to understand is this the last screen that we lost a few years ago in the storm in Kolkata, has that been insured? And have you received the money? And secondly, what is the status? Yes, go ahead.
Yes. This was insured, and we received the money from the insurers after a lot of case with them. So that has been there with us. And INR 112 crores have been received from them. That is not only for the goliath crane alone, but that was whatever damage happened in the case of our stores and the module, all, et cetera. To put together, this has come. So for the crane, they have given us around INR 24-odd crores, right.
That's good to hear, sir. I guess, what is the -- given what's going on right now on the ground, what is the current status in the DRC shipyard? Is construction going on? Are you stopped construction for a few days? Can you just give us an update on the actual activity right now?
You are talking about the post-lockdown?
I'm talking about, as you speak today, is there a lockdown going on in the shipyard? Is there people working? What is the status?
Mr. Damani, I must tell you to be -- since it is in the record, therefore, I would say that no. No, because the government directions are there. West Bengal government has said that no activity should go on. However, we have taken some special dispensation for very residential work. That is the installation. That is a trials of the goliath crane where the Koreans are here. So we have taken special dispensation that is going on. And some other critical work, which is very, very critical of the national importance, those things are being addressed. But in general, the -- as for the guidelines, as for the directives, we are not supposed to be doing any activity in the shipyard. But as of now, we are all sitting in the -- my office, and I'm talking to you.
The next question is from the line of Viraj from Jupiter Financial.
Yes. Congratulations on a good set of numbers. I've only -- most of my questions are answered. I have just one question. What is our cash on the balance sheet -- our own cash in the balance sheet?
Just give me half a minute, we'll -- you are talking about the total cash or own cash?
Our own cash, sir.
INR 82 crores. INR 82 crores for own cash.
INR 82 crores, is it or...
INR 82 crores.
INR 82 crores is our own cash. For the total cash is INR 82 crores over. Is that correct?
Our own one.
INR 82 crores, right?
Yes.
And sir, on the client case, the other income, which is one on the client case is ours. Is there a way to share it number?
We are selling that out for total cash INR 3,721 crores. Out of that project fund is INR 3,639 crores. So INR 82 crores is own cash. Okay. Apart from whatever is there were already invested in our working capital. That is around INR 543 crores. So the free cash is INR 82 crores as of now.
The next question is from the line of Nitin Ghandi from KIFS Trade Capital.
I have 3 questions, basically. First, I would like to understand something on the size of refit opportunity and scalability over 3 to 5 years and margin expectations on those things.Second thing, I must congratulate you for the bullet tank and plate cutting and other steps which you have taken, which are more of a long-term. But with that, what is our annual capacity in terms of a revenue generation increase, which would have come? And what is the likely revenue, which we can do with this capacity, assuming everything is in optimal levels? And third is, if possible, can you share a segmentation of the order book? Because we have been hearing on type of the ships and Survey Vessels and shareholders. But given revenue rupee terms, if you can give some segmentation, it will be helpful and expected execution time from those.
Okay. Now when you -- the first question, you talked about the refit in next 3 to 5 years, I have explained to one of the investors when she asked the question about refit. And in that, as of now, we have only 1 refit of the thing, which you have taken from the government of Mauritius that's going on, and that should get over by July or so. And we are already bid for INR 200-plus crores of some refit of the Indian Navy. And now since we have already created now refit vertical, it's not a very big one as compared to some of the shipyards in the country, but we have already made a beginning. And both that in the times to come in 3 to 5 years, which you are asking for, we want to grow. My target is that I should be looking around INR 75 crores to INR 100 crores of the revenue, that should be coming from the refit segment. Now the refit, as you know, that provides better profit margins compared to the shipbuilding. It can be depending on the -- how much aggressive you want to be. Normally, the refit margins will be higher than the shipbuilding margins. And the time is more faster compared to shipbuilding, and we do not have to actually invest much of the CapEx. So that is advantage with the refit. And GRSE is going to be focusing much more in the refit area. Second thing, which you talked about the plate cutting and augmentation of the facility, which has happened based on the new machine that is underwater plasma cutting machine that is coming for the plate cutting. This is actually the derivative or the function of the requirements. So I have got a huge number of ships under construction as of now. That means half of all these ships are acquired to be constructed. Now the very first activity for the ship construction at late of the ship are required to be cut. So therefore, if I'm not able to cut the required number of plates to the different sizes based on the special software, which is kind of feeding to the machine, the CNC machines. So if I don't have the rest of the machines with a good throughput, I will not be able to meet the time lines of the plate cutting, and therefore, the publication of the blocks and mega blocks. So this is the function of the requirement and the time line in which I have to construct number of the unit blocks and mega blocks of the different kind of ships. I've told you that this machine getting commissioned has provided me 35% plus kind of additional throughput for the plate cutting because there was a need. So with the current order book and the number of ships, which are the initial phases of the hull construction, this is going to be of the huge boost to me with respect to the -- this one, for the plate cutting and fabrication. The third question which you asked is about the balance of the ongoing projects for 17 Alpha, balance fund. That is again the contract is around INR 16,800-odd crores. For Survey Vessel, it is around the -- this actually also includes a base in depot spares, which is also part of the contract, which will also have to procured and delivered to the customers with some margins being taken by the shipyard. So SVL certified the largest INR 20 crores to INR 40 crores. ASW Shallow Water Craft is INR 6,143 crores. So that is, I think, a balance. And of course, we have got the order for the Ghana also. It's around ready INR 80-odd crores -- INR 84 crores -- INR 94 crores. So this is largely the shipbuilding orders as of now INR 25,183-odd crores.
Yes. Sir, just can I squeeze in one more question?
I don't know if the moderator permits.
We have participants in the question queue, sir. The next question is from the line of Mohit Kumar from DAM Capital.
So I have only one question, sir. So how is the revenue [indiscernible] P-17 Alpha and the company odd fare, and ASW, the ship over the next few years?
Yes, just repeat your last question again, please.
Sir, my question was how the revenues booked in the space, which are the milestones. And as a milestone, how much revenues did you book as a proportion of the total order book for the next few years?
Yes. I have been, in fact, informing the investors that the P-17 Alpha, which is the largest of the -- the order value project, which is now right now than INR 16,000-plus-odd crores is the balance value that is remaining on 17 Alpha. Okay. So out of INR 19,300-odd crores was a total project value, out of that...
7%.
Okay. So therefore, now you can make out that there's a good amount of value, which is still there. But with the launching of the ship, and as I said that the -- now the construction of the ship will progress with the lowering of large number of equipment on both the 17 Alpha ship first one. The second ship is also right now going on at full speed, the whole construction assembly of different blocks and another guard off of the GRSE. And this time, we have planned that based on the lessons learned and a lot of strategy, which we are defending. We would like to have a lot of equipment lowered in the second 17 Alpha much before it launched. So -- and also, we want to advance the launching of the second 17 Alpha. The third ship is also under already currently laid. And then block construction will be going on a whole swing Once the goliath crane gets commissioned by a month end. So 17 Alpha, whatever it was giving revenue is expected to give much more higher revenue in the financial year from this year onwards and thereafter. Because the moment you have the, say, missile systems getting lower -- and the value of the missile systems are very high. So that's going to ultimately give you a much higher value. Right now, we will be lowering a lot of injury equipment, a lot of other electronic equipment. But one in numbers, a lot, I would, say Sam and [indiscernible] goes onboard ship. Put together, this is going to give you a huge amount of revenue. So from here on, from FY '22, as I said that, what we have seen, the progression of the revenues that have been coming our revenue from operations and the shipyard, there's going to be a quantum jump in the revenues that will be coming up in the coming years whether it is a 17 Alpha or it is going to be the Survey Vessel lunch or the ASW Shallow Water Craft. But FY '22 will have largely 17 Alpha ship. And Survey Vessel will be giving a greater amount of revenue and whatever revenue we now have in FY '22. ASW Shallow Water Craft will start adding up in FY '23 in a big manner and thereafter.
And sir, how much advances you received from government for the P-17 Alpha?
Yes, [indiscernible].
Around INR 4,300 crores.
Till the date, right, in time. And also what about the Shallow Water Aircraft?
See, let me again correct you. I will just correct you. This is not advanced. What we receive against any project is always, again, the stage payments. It is against the defined milestone, against the contractual provisions. Okay. So whatever is released by the customer that is Indian Navy, it is against the stage completion or defined milestones.
So how many milestones are there in a project?
There are a total 15 milestones in a ship construction, whether it is a P-17 Alpha or it is the -- or it is the Survey Vessel or ASW Shallow Water Craft.
The next question is from the line of [ Manush Shah ] from [ Lexcom Investment ].
My question is with respect to the trade receivables. As we have seen that it has come down drastically from 136 days to around 57 days. So how confident are you that you will be able to maintain the -- those days sales outstanding at these levels when their revenue will rise significantly during the FY '22?
Actually, this -- we know better. FY '21, we have not faced any budget progress. That's why -- because we have a massive collection this year around INR 2,700 crores, odd crores. So that's why there is a drastic reduction in trade receivable. And future years has also. Since already we are in an advanced space and also main thing, our spread is whenever -- there is no delivery, much delivery in next year. Naturally, our trend receivable is bound to reduce because of the -- whenever -- and already money is there. After achieving the milestone, we have already got the money. So whenever any will do, immediate will adjust with the money, which is [indiscernible] Naturally, there will be no incremental trade receivable in next year. And whatever minor trade is included there, that is for our deliveries and [indiscernible]. As regards to C building, because of -- since we'll get -- we are expecting that there will no budget prevalences. And second thing there will be money is already there available. Our [indiscernible] is already available with me. Whenever I took our immediately. I will adjust against my other loan balance. So there is no increase in attribution.
My question is coming from that with keeping with this -- the current quarter, how the things are going on. The revenue at the government level is going to be a little tight. So it is emanating from that.
Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Shri VK Saxena for closing comments.
Thank you very much, Mallika, and all the esteemed investors and analysts who have participated in this virtual -- the conference call. And I can only say that I've tried my best to always ensure the company is geared against all the storms, all the difficulties, all the challenges and trying my best with my team members to ensure that the company moves forward unhindered. While we have some temporary setbacks, but I can again assure all of you that we are not leaving any stone unturned with regard to the growth of the company. And as I said that, we are quite hopeful that the second wave effect certainly gets reduced, weakens up. And we all -- as Indians come out of this trouble as early as possible and so the GRS also is expecting that. And if that happens by end of June, I can tell you that the future is quite good for all of us, for the GRSE and for my valued investors, and of course, my esteemed customer, Navy and the Coast Guard. And we are poised to do well, and I continue to strive hard to improve my internal efficiencies and look forward for what are maybe the revenue that would be growing. I'll try to maintain the margins, et cetera. That is my biggest focus area and try to see that my internal efficiencies and various area of operations goes up.And I can wish all of you a very safe -- safer time, I think -- and take care of all the -- your health, et cetera, your family and dear ones, and please follow the COVID-appropriate behavior so that all of you are safe. Thank you very much. Jai Hind, and all the very best.
Thank you. On behalf of Concept Investor Relations, that concludes this conference. Thank you for joining this conference call. If you have any further queries, please send an e-mail to guarav.g@conceptpr.com.