Cochin Shipyard Limited (COCHINSHIP.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 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 Ms. [ Chandni Chande ] from Kirin Advisors. Thank you, and over to you, ma'am.

Thank you. On behalf of Kirin Advisors, I welcome you all to the conference call of Cochin Shipyard Limited. From management side, we have Mr. Madhu Nair, Chairman and Managing Director; Mr. Jose V J, Director of Finance; Mr. Rajesh Gopalakrishnan, Chief General Manager of Ship Repair; Mr. Harikrishnan, Chief General Manager, Shipbuilding; Mr. Shibu John, General Manager of Finance; Mr. Syamkamal, who is Company Secretary. Now I hand over the call to Mr. Madhu Nair. Over to you, sir.

Good evening to all present in this conference call. I, Madhu S Nair, Chairman and Managing Director of Cochin Shipyard Limited, would like to extend a warm welcome to all the participants who are joining us today. I'm joined by Shri Jose V J, our Director of Finance; Shri Rajesh Gopalakrishnan, Chief General Manager of Ship Repair; Shri Harikrishnan S, Chief General Manager, Shipbuilding; Shri Shibu John, General Manager, Finance; and Shri Syamkamal N, our Company Secretary. I would like to bring to your attention operational achievements in the third quarter of FY '24. Two major defense projects stood out during this period. Firstly, INS Vikrant, the indigenous aircraft carrier delivered in September -- commissioned in September 2022 by the Honorable Prime Minister. This project played a significant role in generating revenue for both Shipbuilding and Ship Repair during this quarter. The second noteworthy project involved the construction of ASW SWC corvette for the Indian Navy with an estimated overall value of about INR 6,300 crores. The progress on this project has been good, and we are happy to inform you that 3 vessels were simultaneously launched on 30th November 2023, which is probably a first for such projects of the Indian Navy. Currently, on these 3 vessels which have been launched, the machinery outfitting works are underway. Additionally, 2 more vessels, that's vessel #4 and #5 in the series had their keel laid on 8th December, 2023, and currently hull block erection is in process. The remaining 3 vessels, that's vessel #6, #7 and #8 are also in the advanced stages of block fabrication. On the commercial front, on the multipurpose vessel projects, 8 numbers which we are executing for European clients, also contributed during this quarter. With respect to new orders, the CSL has received several important orders in the third quarter until this date. In October 2023, the Ministry of Defense entered into a contract with CSL for a mid-life upgrade and repowering of a naval platform at a cost of INR 313.42 crores. This project is expected to be completed in 24 months and involves the modernization and upgradation of various systems and the equipment on board the ship to enhance its operational capability. We consider this as a significant order win because this could set the context for such projects into the future. Furthermore, in December 2023, CSL signed a contract again with the Ministry of Defense for a value of INR 488.25 crores. This contract entails the repair and maintenance of equipment and systems onboard INS Vikrant. The full work is expected to be completed by the first quarter of FY '25. Additionally, on the shipbuilding front. On January -- in January 2024, CSL secured order from a European client for the design and construction of 1 hybrid SOV, service operation vessel. The project cost for this firm order is estimated to be approximately INR 500 crores with the vessel scheduled to be delivered in 2026. The vessel is designed and built to cater to the service, maintenance and operational needs of the offshore wind farm industry in the European market where sustainable energy solutions are in high demand. It is significant, again, from the point that this again is a hybrid SOV. In early February 2024, we have signed shipbuilding contract for undertaking medium refit of 2 India naval vessels. This is called a multiple refit contract because it's 2 vessels together, so this multiple refit contract valued at around INR 150 crores includes drydocking, refit as well as upgradation of equipment on board the ships. Now I would like to go through other achievements during the period, which I also consider worth mentioning here. CSL successfully delivered 2 electric hybrid 100 pax vessels to the Cochin Water Metro project, a venture which has had considerable significance and visibility nationwide. The replication of this project in various regions is underway, and the contract for 8 vessels with similar configuration has been awarded by the Indland Water Authority of India to Cochin Shipyard Limited, and 2 of them have already been delivered in January and has certainly been positioned, one each at Ayodhya and Varanasi. We started the fabrication of steel-cutting and fabrication of the trailing suction hopper dredger being built by CSL for Dredging Corporation in India. Our subsidiary company, Udupi Cochin Shipyard Limited, UCSL, has delivered the first 62-ton bollard-pull tug to vessel Ocean Sparkle Limited, which is now part of the Adani Group, which is the leading tug operator in India. Also, the keel has been laid for the second 70-ton bollard pull tug for vessels Polestar Limited. Members may be aware that UCSL has contracted to build 2 numbers 62-ton bollard pull tug for Ocean Sparkle and 2 numbers 70-ton bollard pull tug for Polestar. Also, at UCSL, fabrication has commenced for 2 numbers, 3,800-ton dry cargo vessels being constructed for vessels Wilson Shipowning Norway, which is part of a 6-vessel series. This showcases UCSL's venture into the global shipbuilding arena. It's worthwhile and we take pride in informing that CSL, the main unit, Cochin Shipyard Limited, has been upgraded to the GreenCo, CII GreenCo Gold rating. We were earlier rated at CII GreenCo Silver by the Confederation of Indian Industry under the GreenCo framework. So this upgradation from GreenCo Silver to GreenCo Gold is in line with the efforts being put by CSL to upgrade its green and environmental footprint. The confidence that our greening efforts will establish as a benchmark for shipbuilding and repair yards in India has also give confidence to various shipowners looking to build green ships in the country is encouraging for Cochin Shipyard Limited. Moving on to the financials, I would like to mention that our financial results for the third quarter were indicative of positive growth. These results were uploaded on 30th January 2024, and I'm sure that all of you have gone into that detail. I would request Mr. Jose V J, Director, Finance, to briefly touch upon the results for the half year.

Yes. Good evening, everyone. The financial performance of the company during the period were in line with our expectations. In the third quarter of FY '24, the company witnessed a significant increase in turnover, reaching INR 1,021.45 crores compared to INR 631 crores in the third quarter of FY '23, demonstrating a growth rate of 62 percentage. Similarly, the profit before tax for the FY '24 also showed remarkable improvement with INR 345 crores as opposed to INR 151 crores in Q3 of FY '23, indicating a growth rate of 129 percentage. Moreover, the profit after tax for FY '24 stood at INR 248 crores, a substantial increase from INR 118 crores in Q3 of FY '23, reflecting a growth rate of 109 percentage. When considering the year-to-date performance, the company experienced overall growth in turnover and profitability. The year-to-date turnover of FY '24 amounted to INR 2,420 crores, making a 38% increase compared to the previous year turnover of INR 1,753 crores. Additionally, the year-to-date profit before tax reached INR 748 crores, showcasing a marked improvement from previous year's INR 390 crores, representing a growth rate of 92 percentage. Similarly, the year-to-date profit after tax was recorded at INR 548 crores, indicating a growth rate of 91 percentage when compared to the previous year of INR 287 crores. Furthermore, the company redeemed its tax-free infrastructure bonds amounting to INR 100 crores in December 2023, which reduced the total debt to just INR 23 crores as of current date. As a result, the company has practically become a debt-free company. In terms of the financial indicators, the company achieved a strong EBITDA margin of 34 percentage for the 9-month period ended December '23. The margin includes other income also. Additionally, the profit after tax, the PAT margin achieved during the same period was 23 percentage, further emphasizing the company's financial strength and success. That's all from my side.

Thank you. The Board of Directors of the company, at a meeting held on 7th November 2023, had approved split of equity shares having face value of INR 10, each fully paid up into 2 equity shares of the face value of INR 5 is each fully paid up. Shareholders approved the proposal on 13th December 2023, and the split of equity shares were effective from 10th January 2024. Also, the company's board at the recent meeting held on 30th January '24, have declared second interim dividend of INR 3.5 per equity share of face value of INR 5 each post split for FY '23-'24, which will be paid by end of this month. This is in addition to the first interim dividend of INR 8 per equity share of the face value of INR 10 each, which is presplit, which was declared by the Board at its meeting held on 7th November '23. The total payout to the shareholders on account of these 2 internal dividends is INR 197 crores. Moving on to the status of various vessels under construction. For the ASW SWC corvettes project for the Indian Navy, a total of 8 vessels is being constructed at a cost of about INR 6,300 crores. The status has already been covered earlier in my talk. Regarding the hybrid electric catamaran vessels for Cochin Water Metro, a total of 23 vessels are contracted. Out of these 12 vessels have already been delivered, remaining 11 are at various stages of construction. For the 7K multipurpose vessel project for European clients, a total of 8 vessels are being constructed. Vessels 1 and 2 are currently undergoing hull block erection and outfitting. The vessels 3 to 8 are under various stages of construction. Regarding the Commissioning Service Operation Vessels project, CSOV project, 2 vessels are being constructed. Plate cutting for the vessels was done on September 1, 2023, and fabrication is currently in progress. The fabrication for 1 number, 12,000 cubic meter trailing suction hopper dredger being constructed by CSL for DCI started on the 11th of December 2023. The pilot project of 1 number hydrogen fuel cell vessel, equipment commissioning has been completed and the vessel is in advanced stages of testing and sea trials at this moment. Eight number hybrid electric catamaran passenger vessels from IWAI at a cost of about INR [ 129 ] crores. Two of them have already been delivered in January as was mentioned earlier. And the balance 6 vessels are at various stages of construction at our subsidiary in Hooghly Cochin Shipyard Limited. Coming to the 2 major expansion projects being undertaken by CSL, namely the new dry dock project with a cost of INR 1,799 crores, and the international ship repair facility, ISRF project costing INR 970 crores, the civil works for both the projects have been completed and the projects were inaugurated by the Honorable Prime Minister Sri Narendra Modi on 17th January 2024. The ceremony was also attended by the governor of Kerala, the Chief Minister of Kerala, the Union Minister of Port Shipping and Waterway and other high-level dignitaries. For the dry dock project [Technical Difficulty] we have an order book of about INR 800-plus crores. This is what we -- we normally guide a little bit lower, but [Technical Difficulty] I would like to conclude now and we'll be happy [Technical Difficulty] patient hearing.

[Operator Instructions] The first question is from the line of [ Rohit ] from Antique.

Congratulations on a good set of numbers. Sir, if you could just help me with the order backlog position, including the IAC work, both in Shipbuilding and Ship Repair?

What was it, the order backlog?

Yes. INR 21,500 crores mentioned by the CMD is only the order backlog. Out of that, IAC is INR 1,047 crores. And ASW SWC is INR 5,215 crores. NGMV, that is new generation missile vessels, is INR 9,802 crores. So total from defense is around INR 16,064 crores. And on the commercial front, the 1,200 passenger vessels INR 286 crores; then the KMRL, INR 32 crores; IWAI 6 vessels, INR 73 crores; and dredger for DCI around INR 869 crores. So that comes to around INR 1,260. That is on the domestic front. Then the export order, the 7,000 multipurpose vessel, INR 734 crores. CSOV for a European client is INR 955 crores. And zero-emission feeder container vessel, 2 numbers, again to another European client is INR 547 crores. And SOV for another European client is INR 452 crores, which we recently signed the contract. So the total export order is around INR 2,588 crores. Then subsidiaries, we have a total order book of around INR 700 crores, so totally, it is INR 21,500 crores.

[Technical Difficulty] from the context of the EBITDA margin front, how sustainable is this -- about 20-plus kind of EBITDA margin as we conclude this IAC work?

Not be sustainable, but after IAC, we may be around 19% to 20% level EBITDA, excluding other income.

Even in ASW, you mean to say the EBITDA margins can be or even NGMV can give you 19% to 20%?

We would not like to discuss exact project wise, but largely, the guidance would be 19% level.

On a blended level.

On a blended level because we operate different businesses actually, ship repair, ship building different businesses. On both sides, commercial and defense are different businesses. So we would -- probably desist from getting into specific projects and that kind of detail we would desist because it's a little bit too complex.

Got it, sir. From an order inflow perspective, especially on INS Vishal, would you want to make any remarks? As in any conversation about it, it will be really helpful, sir.

We probably are not in a position to make any comment in this regard.

Any other order inflows in pipeline like [indiscernible] we have been hearing for a long time. Any color on those aspects? Any additional AON?

Not yet, not yet.

So that means in terms of the conventional defense order inflow, it looks bleak, right?

See, the RFP issued as of now is -- there is RFP for INR 1,600 crores for defense projects. But there are expectations, which I may not be able to discuss, but over this year, within 2024 calendar year, we're expecting further RFPs to come in.

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

So just wanted to understand this change in margin guidance because I think last quarter, you had indicated that Ship Repair would be some segmental level is 13%, 14% -- sorry, Ship Repair is 19%, Ship Building is 13%, 14%, so on a blended basis we make 16%, 17%, like any particular reason for this sharp sort of [indiscernible] increase in guidance? And in addition any one-off factors that aided numbers?

We're probably not getting you very clear on the line because there's too much of a booming voice coming in. Can you repeat that question one again?

Is it better now?

Can you just go ahead? Let me see.

Yes. I just wanted to understand the 200 bps improvement in margin. So you had last quarter indicated that Shipbuilding does 13%, 14% and Ship Repair does 18%, 19%, so blended basis are at 17%.

Yes. This quarter, as was mentioned earlier, we had the aircraft carrier, both on the Shipbuilding side and the Ship Repair side, which has helped us a little bit more on the margins.

No, sir, I'm talking about long-term steady state like we are saying 19% we will do. I just wanted to understand the factors like which is higher than 16%, 17% which you've normally been indicating?

The 19% indicated was post IAC period, post aircraft carrier period.

Yes, yes.

Just a minute, just a minute.

Sir, can you hear me fine now?

See, when you're talking the margin level, like it's -- you mentioned that we have conveyed earlier 17%, 18% kind of level, and we are now talking 19% kind of level. Is this what you said?

Yes, yes.

Yes. That is actually coming from -- see, when we say 17%, 18% and when we are trying to project into the future, it is a little bit a percentage here and there will always happen. But when we are talking, you would have also seen that on the Ship Repair side, we said we are sitting on a slightly more higher firm order book. So we know that Ship Repair is going to contribute a little bit more over the next few years as we move forward. There is a higher level of confidence the kind of large projects, the multi refit contracts that come in, the midlife upgrade contracts that has come in. We are getting signals that this could all be sort of sustainable into the future. These are -- these could be the method that's sustainable into the future. So don't hold us are too hard on to whether it's 18% or 19%, it's somewhere around that level. That is all we would like to say, yes.

Sure, sir. Maybe just on the 2 new facilities. Do we have any work in hand for the ship repair under new dry-dock or would that be something that comes up over time?

The shipbuilding dock, the new dock, the current orders, the dredger will actually be built in the new docks. And then there are further vessels already scheduled and planned into the new dock. For the Ship Repair, we expect to go and secure orders as we move forward. We don't think that it will be too much of a difficulty to get the orders for our ISRF facility, which is for ships below 130-meter long. We are firmly entrenched in that segment. There's quite some volumes available.

[Operator Instructions] The next question is from the line of Raj Rishi from DCPL.

Just wanted your comments on how big this Ship Repair can become for you? I believe the increase in capacity is, what, 25% of India ship repair capacity. So...

By numbers, by numbers almost, yes.

Okay. And I also read that you had mentioned in a recent interview that you're looking at a cluster in Maharashtra region also for ship repair. So being such a labor-intensive sector, the ship repair, what's the edge which you would have, say, internationally to get international orders also?

So there are 2 parts to the question. The first one you asked was what could be the size of the business from whatever we currently have? That is the units we have right now in Cochin, the new ISRF and the units in Mumbai, Calcutta and Port Blair, that's what we currently have. So that is something which I'm not sure whether we have said this earlier, but then we should be seeing INR 1,200 crores very shortly and scaling it up to a INR 1,500 crore kind of level in a few years. So that is a picture which we have painted on ship repair. Now what we have talked about a new cluster on the West Coast, it's something which we are in discussion. And that would be actually to try and tap larger ships. See, whatever we have built till now is not the new ISRF and the 3 units which we have is all for medium-size ships. The only large facility is actually at Cochin Shipyard Limited, the main unit. But what -- if all goes well and final assessments are clear, then if you do something in the West Coast, that would be for slightly more larger type of vessels trying to tap the international markets. And you are asking a very pertinent question. With the kind of labor-intensive work, we need to actually work with best around or next to best around turnaround times in the world to attract business. The confidence is there, the plans are yet to evolve.

And sir, what's the labor arbitrage? Say, if an international ship comes here versus some other country, what's the labor arbitrage? Like what's the advantage which India would offer?

I don't think the labor arbitrage is the most important part here. It is actually the skill sets and the capability to drive world over, ship repair as in pockets and clusters, for some time, there will be labor arbitrage, that is for sure. But we would not want to do anything into the long term looking at labor arbitrage because that will be gone after some time. So it will all be best-in-class turnaround time worldwide and best-in-class capabilities, which is the confidence level. So it may not be the arbitrage on the labor, but it is trying to actually plug into the global ship repair ecosystem.

And I also read an interview which you had mentioned that the size of the -- this global ship repair industry is like massive. And I think India is, what, 1% or something. What would be your reasonable vision as to what kind of percentage can it go to, India...

I may not be able to talk on that total percentage from a country perspective. But as we say, from a CSL perspective, I said INR 1,500 crores in a not faraway future. But then maybe you should add another INR 1,000 crores to it from Cochin Shipyard's point of view over the next 10 years-or-so, something like that.

Okay. And sir, just regards to green shipping, I think you had mentioned in the earlier call that around 2,500 ships are ready for their life is like end of life. So do you think most of them will go for green shipping or it will be just like fossil fuel?

No, they will all go for some sort of green. All these vessels will have some green part in it. It could be hybrid, it could be parts -- so it may not be fully green but it will all have some part of it green. That is for sure.

And sir, these 2,500 ships which you had mentioned, in how many years would it be -- like all of them would have to go for like some new ships have to...

So the general take is in about 10 years' time.

In 10 years' time. And you would expect very, very good business from there, like...

See, it is actually about our execution capabilities. We have now contracted 8 ships in Cochin Shipyard from German clients, another 6 in our Udupi subsidiary. It will really be -- once we deliver these vessels from a quality perspective, time perspective and how beneficial it's been for the clients, that will decide how things will move into the future. But as we're speaking, we feel confident, we feel good.

Okay. And sir, recent news item, you mentioned some African country delegation which had come to Cochin Shipyard...

That's a very, very preliminary reach out. It's also got to governmental angles to it, but there [Technical Difficulty].

Hello? Hello?

We're not sensing any business on that at this stage, but we'll take it forward. We'll see where it goes.

And the next question is from the line of Rohit from Antique.

My question will be more to do with the capacity observation that we have had in the -- with the latest addition. What is the peak Shipbuilding venue execution you could do theoretically in a given year?

That's a very tough call. That depends on the type of the projects we are able to garner and the type of the projects that would come up in the market. So because -- that would be a very difficult question to answer because whether it's a naval project or it's a conventional commercial vessel or whether it's a functional vessel, it will depend on that. Because the turnover -- it also depends. It's not just the execution of the shipbuilding capabilities. It is also the equipment which goes in because the turnover is a sum of those. Not just the execution part, the equipment also. So if it's a functionally costly ship, then the turnover could be high. So that could be a question which we would not like to answer straight away.

Sir, let me put that question in a different way. We have somewhere like 110,000 deadweight tons capacity, is it fair to assume that the current [Technical Difficulty].

We lost him.

The line for the current participant has been disconnected, so we will take the next question. [Operator Instructions] The next question is from the line of Vignesh from Ksema Wealth.

I just want to understand your guidance for FY '25 along with EBITDA margins. Hello? Sir, am I audible?

Director Finance, can you just explain that?

This year, we may achieve the all-time high turnover we achieved pre-COVID period. And next year, we may add another 12 to 15 percentage above that. That is a broad guidance which I can give.

Okay. So approximately, it should be INR 3,400 crores for the year, and it should be around INR 3,700 crores approximately for next year?

In a broad way.

Yes. Broad way. And EBITDA margin should be around 18% to 19%, as you have stated it, approximately?

Yes, yes.

Okay. And how are the orders from the Europe, sir, like hybrid vessel, green, are you seeing positive inquiries coming up for the next year?

We are -- there are inquiries. We are hopeful that we will be able to convert a few of those because these are all in various stages of discussion, but there are inquiries. There's no dearth of inquiry.

Okay, okay. And other thing, any passenger ships kind of thing where in the waterways where our government is focusing on tourism kind of things, are we getting any orders in such a manner there?

We're not in a position to discuss orders at this stage. And -- but the smaller vessels, especially for the inland waterways space, there are discussions that would be largely handled by our subsidiary from Kolkata. That is our HCSL, Hooghly Cochin Shipyard Limited.

Okay. So but discussions are going on in...

There are discussions happening, yes.

And the next question is from the line of Viraj from Jupiter Financial.

Congratulations in outstanding numbers. My question is regard to the previous participant. Are you guiding 15% growth from the pre-COVID levels? So that should be in the range of INR 3,700 crores to INR 3,800 crores top line? And what would be the PAT margin, would be in the range of 18%?

PAT margin may not be in the 18 percentage level because next year, we will have the depreciation provision of the new CapEx which we commissioned. So PAT margin, it may be lower, but EBITDA level, it will be around 18% to 19% as we guided.

The PAT should be in range of 15% to 16% then that should be the case then.

Yes. Because after considering the depreciation of -- the additional depreciation from the new projects [indiscernible].

Okay. And there was an article in one of the newspapers where Navy said that they would be interested in having 2 different -- 2 aircraft carrier. Any comment on that?

See, the Navy has gone on record on that matter. But regarding a contract or any further discussions, we would not have any comments.

[Operator Instructions] The next question is from the line of Raj Rishi from DCPL.

Some companies have commented on, like, India's advantage for them because of the geopolitical situation. People are a little averse to China and the political reach, which the present establishment has global south, et cetera, et cetera, is helping their cause in getting business. So how would you comment as far as -- what would you comment on this as far as Cochin Shipyard is concerned?

See, overall field for India is looking very positive. And we have been a little bit of an early mover in this space, especially in West Europe. And right now, with the geopolitics, we feel it's much better positive vibes coming in. So it's definitely looking good for us.

Okay. So this -- do you get help from the government to government level also, like -- or you have to solicit business on your own?

We do it on our own. Government is not getting involved in the business.

And the next question is from the line of Vignesh from Ksema Wealth.

Just want to understand the opportunity, apart from Europe, are we targeting any other geographies as such?

Not really at this stage.

Okay. So basically, we are seeing like execution or the orders are pulled from the Europe side, execution will be a challenge is what to be understood, sir?

See, Europe, -- what our strength we have built up is a little bit towards Europe, which is quality of the product, engineering strength of the organization, trust that we have built up over the past 20 years with various clients in Europe, visibility in Europe. And especially since Europe is looking at significant vessels to be built, we really see no reason at this stage to check other geographies at this stage. We are aware of what could happen in other places. But right now, we are focused on Europe other than what we are seeing in the country on our defense and whatever is happening within the country.

Okay, understood. Just a little bit more on Europe orders. Why are you seeing it as the replacement demand or the new ships which is being coming up for the orders with us?

So Europe, 2 types of demand is what we are seeing. One is in European short sea vessels, which are various type of cargo, multipurpose vessels plying largely within Europe. These are largely old vessels. Average age of the fleet could be getting close to 20 years. And naturally, they would need replacement. And when they are getting replaced, they will not get replaced by old class design, they will get replaced by newer technologies and lesser emission vessels, so what we call the green or the hybrid vessels. So that is one part of the demand. The second part of the demand what we are focused on is the wind energy market, which is emerging in Europe and allied requirement for service and support vessels in the wind farm fields. Now this is expected to peak from 2027 onwards. So right now, there are various agencies finding right time to start doing the investments into this segment. And we are getting into that subject.

Sir, just a quick note on the wind energy. Why do these ships come in? It is for -- how does it work for the wind energy market for ships? Just to understand more on that.

It's a difficult question. All I can just explain is, see, the wind energy in Europe, being in the tropics, wind energy is going to be dominating the energy transition into the future, and these are largely going to be offshore wind. So it will be offshore field. When you install fixed offshore wind towers or floating wind towers, these days about 10 megawatt each tower and countries are rolling out their own field, for example, U.K. is talking about 25 gigawatt, various other countries are talking about. So once these fields come up with multiple thousands of wind towers in the fields, all these wind mills will need continual maintenance and support. And you need a lot of specialized ships in the fields to go and service this market. We are trying to look at that support ship, various types of support ships.

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

Just wanted to check because you said that the margin increase and all of that is some sort of large number of ship repair and mid-ship refit contracts. So when you indicate ship repair INR 1,200 crores for the top line, that also includes these medium refit orders or those are largely booked in shipbuilding? And how big a pipeline is this...

All the medium refits -- all, whatever we said, that is all ship repair. All the midlife upgrades and multi refit contracts, it will all be ship repair. And as we move forward, we feel, as you rightly pointed out, the ship repair turnover goes up, and we can hold our business tight as we are doing right now, that will be positive for the company as we move forward.

What could be the size of this refit market right now? Or maybe, say, next 2, 3 years, what is the size that Cochin Shipyard is targeting?

As I said, see, these are very, very fluctuating figures. That's why we wouldn't want to stick to exact figures. But right now, visibility could be INR 1,200 crores in a year or 2, INR 1,500 crores in 3, 3-odd years. This would be roughly where we would like to be.

Sure. And maybe just sort of understanding if there's any update on IAC-2's potential? Anything that you can kind of think that could happen?

Not yet, not yet. Not yet. We both are on the same page whatever is there in public domain only we also know.

Okay, sir. Those are my questions. Maybe just one follow-up, if I can. Any guidance that you've given for next year? I sort of lost out on the call in between.

We just conveyed this a bit...

Sorry, I just got dropped off. Could you just repeat that?

Yes. What we had said is like for this year, we would exceed our all-time best turnover targets. And for the next year, that's for FY '25, we would try to raise it by 12 to 15 percentage on top of that.

As there are no further questions from the participants, I now hand the conference over to management for closing comments.

Thank you, dear participants, and we are happy to have all of you tuning into the company. We continue to have these engagements taking forward. And whenever there is any significant events or developments in the company, we'll appropriately convey it to the market. Thank you. Thanks for your time. Thank you.

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