Knowledge Marine & Engineering Works Limited ($543273)

Good evening, everyone, and welcome to the FY '25 to '26 Earnings Call of Knowledge Marine & Engineering Works Limited. Today on this call, we have Mr. Sujay Kewalramani, Chief Executive Officer, along with Mrs. Kanak Kewalramani, Director and Chief Financial Officer. Before we begin with this call, I would like to give a short disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as -- as today -- this conference may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations as of today, and actual results may differ materially. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. With this, I now hand the call over to Mrs. Kanak Kewalramani for the opening remarks and financial performance of the company. Over to you, ma'am.

Thank you. Good evening, everyone. On behalf of the management team, I would like to welcome all our shareholders, investors, analysts and stakeholders to the earnings call of Knowledge Marine & Engineering Works Limited for the financial year 2025-'26. Thank you for joining us and for your continued trust and confidence in KMEW. FY '25, '26 has been a defining year in the evolution of our company. Over the last decade, KMEW has transformed from a specialized maritime services company into an integrated maritime infrastructure platform with capabilities spanning [indiscernible], Marine chartering and shipbuilding. As we completed our 10-year milestone during the year, we also entered what we believe in the next phase of our growth journey, one, driven by scale, integration, long-term contracts and National Maritime opportunity. Going ahead with the financial year '26 financial performance, I'm pleased to share that financial year '25 holistics was another year of strong financial and operational execution. For financial year '26, our consolidated revenue from operations in Page 2 stands at INR 256 crores compared to around INR 201 crores in FY '25, reflecting healthy growth across business verticals. More importantly, we maintained robust profitability with an EBITDA of approx INR 97 crores and EBITDA margins of nearly 38%, demonstrating our disciplined selection strategy and operational efficiency. Profit after tax stood at approximately INR 79 crores translating into a PAT margin of approx 31%, reflecting strong earnings, quality and execution excellence. What is important here is not only the growth in numbers, but the quality and sustainability of earnings. At KMEW, we continue to remain highly selective in project bidding with a strategic focus on contracts that meet our return thresholds and profitability expectations. Our objective is not merely to grow revenues, but to create long-term shareholder value through margin accretive business opportunity. Coming to capital allocation and balance sheet. During the year, we also strengthened our financial foundation. The successful capital raise has further enhanced our ability to pursue growth opportunities while maintaining prudent leverage. We continue to remain disciplined in capital allocation and focused on developing capital only towards projects with strong visibility, high returns and strategic relevance. I would now like to bring in the focus of our stakeholders towards a strong order book providing multiyear visibility. One of the strongest indicators of our future growth visibility is our order book. During the year, we secured the orders of INR 1,075 crores, which is highest order win in the history of KMEW. As of financial year '26, KMEW has a diversified order book of approx INR 1,400 crores spread across dredging, charter hire and shipbuilding. Importantly, a substantial portion of this order book carries long duration tenure thereby enhancing revenue predictability and cash flow visibility. One of the crucial project highlights is the rock pressing contract awarded by [indiscernible] for an amount of INR 50 crores, which was to be executed over a period of 3 months. We are glad to inform that we have successfully executed the contract with underwater control drilling and blasting which require high expertise and knowledge. For the Fed project, we also built and develop [indiscernible], which is India's largest and deepest self-propelled backhole dreger. Coming to the execution part, we have completed 2 contracts awarded by DCI for the capital trading work at [indiscernible], with total brash quantity of 151,000 valued at INR 15 crores. We have also successfully completed one more contract awarded by DCI for the [indiscernible] project to be carried out at Pondicherry port. It is one of the vital projects where in the scope of work involved clearing sediment deposition in the port mouth entrance channel approach areas and center zone by restoring the navigational debt from existing debt levels to the design depth of 5 meters and 8 meters. Further continuing our journey of the order book, I would now like to highlight our strategic breakthrough in Greentech segment. We successfully secured 2 Greentech reenter contracts from VOC port and Vishakhapatnam port, aggregating to INR 650 crores in contract value with a 15-year tenure. These projects represent not just order wins, but our entry into a future focused, high-value maritime vertical aligned with India's sustainability agenda. India's maritime sector is undergoing a structural transition under the Greentech transition program, which seeks to replace conventional diesel harbors with cleaner, more sustainable alternatives over time. We believe KMEW strategically positioned among a select group of domestic players with the capability to participate in this transformation. The significance of these projects lies beyond their size. These are long tenure, high-visibility contracts that strengthens recurring revenue schemes and create a scalable platform for future opportunities in green maritime infrastructure. To continue, we have also achieved a very important milestone during the year, that is our progress in backward integration through shipbuilding. Historically, KMEW has operated marine assets and executed projects. Today, we are increasingly becoming a company that can also design, construct, own, deploy and maintain maritime vessel internally. Through our shipbuilding subsidiary, we are executing major Inland Waterways Authority of India orders for building satisfaction hedges and ancillary crops, further strengthening our presence in indigenous marine manufacturing. We have also acquired 15 acres of land near [indiscernible] District to develop a state-of-the-art shipyard facility. The said land is strategically positioned in close proximity to the upcoming [indiscernible]. This integration and acquisition enhances our strategic positioning in 3 ways. First, it improves capital efficiency and reduces dependency on the third-party builders Second, it strengthens our ability to participate in India's growing Atmanirbhar lead maritime manufacturing ecosystem, and third, it creates the potential for higher margin value capture across the light and value chain. We see shipbuilding becoming an increasingly meaningful contributor over the coming years. To conclude, at KMEW, we are not merely building a larger company, we are building an institution designed for long-term value creation. As we enter our next decade, our aspiration remains ambitious but clear to become one of India's most suspected and integrated maritime infrastructure company while creating sustainable wealth for all stakeholders. With that, I would like to thank all our shareholders, employees, customers, lenders and partners for their continued support and trust in our journey. We will now open the floor for questions. Thank you very much.

[Operator Instructions] the first question comes from the line of Shubham Kadai with 3A Financial Services.

I had a couple of questions. First one is regarding the order book. If we compare our order book given in H1, we can see that we have only added 1 additional contract from DCI worth INR 50 crores that was supposed to be executed mid win. So is there any slowdown in order booking or the demand environment or the netting as such?

This is Sujay Kewalramani. There is no slowdown. These orders are now in the next -- the further other orders are

I'm sorry, your voice -- I'm sorry to interrupt -- your voice is fading away. I would request you to come closer to the mic.

Is my voice clear?

Much better, sir. Please go ahead.

So once again, we have a big pipeline take INR 2,000 crores. And these orders flow in -- are expected to flow in over a period of next 3 months. So there is no slowdown in either bidding or the upcoming orders.

And what would be the status in the Bahrain sand mining project like since it is excluded from the order book right now?

So unless the situation stabilizes, normalizes and its business as usual, we don't intend to put any of our [indiscernible] in that region at present. So only once the situation stabilizes.

Okay, sir. And I wanted to understand more about the tax connect system. My doubt was that suppose if we build ship and sell them. Will the tax [indiscernible] system pliable for the revenue coming from those? Or is it just ships that we own and upgrade?

So tonnage tax scheme is only applicable to operations of vessel and not for the profit from the shipbuilding.

Only the ones we operate, right?

Correct.

And one last question, if I can squeeze in. What plans do we have after using the preference issue that we did? Like do we have any expansion -- CapEx expansion plan in the foreseeable future?

So the prep round that we had done, the capital that we have raised, it's already getting deployed in various phases. The same is expected to be utilized over a period of 12 to 16 months.

I wish you the best of luck.

The next question comes from the line of Gaurav Shukla with FinWest.

I want to ask a guidance of '27 in -- Any guidance?

So we are projecting a revenue increase of 30% year-on-year for the next 2 years.

Okay. And EBITDA margins -- EBITDA margin?

So our EBITDA margins will continue to remain between 35% to 40%.

Second question is regarding order book -- just a , you said that 1,000 order book later in this year. So the time line of this order book till when it is executed?

So the current order book is to be executed. Some portion of it is long term, which is greentech orders, which are going to be executed over a period of 15 years. the balance order book is for execution between 2 to 3 years.

The next question comes from the line of Chintan Parek with [indiscernible]

[ Sir, cogratsn on a good set of numbers. Sir, my question, as you mentioned about on the VOC, the transition program that we got a 15-year contract. So this will be built by us in our new [indiscernible] location? Or will it be done through third-party manufacturing facilities? And what would the time line and expected expenditure project?

So both the [indiscernible] for VOC and Vishakhapatnam are going to be built at the Safala by our own team. That's one of the reasons we are developing the yard because we want to enter into the construction of printers and conventional to and other small craft. And the time line for construction of both the green tags, the work has already started. Major components have already been ordered. Post-monsoon, the physical construction will command, which will complete within 9 months of post monsoon.

Understood, sir. Sir, on the Riverpearl, I understand that the contract for the dredging, the job dredging contract that we have is going to get over soon already got over. So what is the asset utilization plan for that particular machine? And do we have any such assets which will have at least 3 to 3, 4 months of null period to upcoming monsoon?

so Riverpearl 47 was an asset especially created for [indiscernible] in and around East and West Coast of India. There are several places that we identified that have become challenges for major ports like new Mangalore, Bombay, JNPA, Vishakhapatnam and Tuticorin where there is hard strata. These solutions that are possible using that particular dredger are for smaller quantities of rock dredging varying anywhere between 10,000 cubic meters to 500,000 cubic meters. There are various opportunities and bids at tendering stage right now amongst these 5 ports for the utilization of this particular vessel. We see utilization in excess of 240 days per year for Riverpearl 47, the next at least 2 to 3 years.

Okay; understood, sir. So on the financials, I see that we have a decent increase in short term in current borrowing and the jumped around INR 114 crores, yes? So what was the rationale behind this particular debt.

So I would like to answer this question. So the short term has been increased because of the short-term borrowings that we have taken for our short situation of the contract, such as JNPT, which is going to be repaid in this year itself. So that has increased the current borrowing level. Also, there are certain other loans which are going to be over in this particular year itself. So that is why that number has been jumped up, but company has enough of cash companies good written cash, which will be repaid from the internal cash approval itself.

And then on the noncurrent financial effort, we saw an increase up to INR 340 crores plus. So what does -- I mean, what is the [indiscernible] deposit? Is it the potential equity?

Fixed deposits with a maturity of more than 12 months. So that is why that is reflecting in noncurrent investments. So that is the pref 1 that we have done, plus our internal accruals plus the fixed deposits that are kept [indiscernible] for the bank gurantee facility.

And INR 3 crores of presential equity amount, right?

Correct.

The next question comes from the line of Krisha Shah with Mangal Kasha Financial LLP.

So we've consistently seen that the company has given 40% to 44% of EBITDA margin. But if we see the fourth quarter, we have reported margins of 27%. And revenue has also fallen slightly. So what would be the reason attributable to that?

We were executing 2 contracts, JNPA capital dredging works under Dredging Corporation of India and quantity fishing harbor dredging works, the JNPA contract was awarded in the month of November 2025 with 2 months of mobilization and 3 months of execution. Most of the expenditure on the contract took place in the quarter 4 of last year, whereas these are secular contracts, which have a single-stage payment upon 100% completion. And that is why no revenue was recognized in the Q4. The revenue for both those contracts, the last final bill for the Pondicherry contract and the GNPA contract will be recognized in quarter 1 of this year.

What about the...

Situation where you find that the EBITDA margin has shrunk. But spread over the Q4 and Q1, if the EBITDA margin is to be calculated, it will be more than 40%. And if we take out the expenditures made over both of these projects from Q4, the EBITDA margin will be above 40%.

Okay. That's helpful. And 1 more question on the [indiscernible] regime now that we have nearly 0% of taxes for the year. Can we get some color on what percentage of the need or because it's based on [indiscernible] what percent of the fleet would currently be eligible under the scheme? Or is it all of it?

Any vessels that are being chartered to government of India or any private entity or engaged in any of the dredging work. So that particular segment, we will fall under the tonnage tax scheme. The shipbuilding subsidiary or the revenue generated from the shipbuilding, even in Knowledge Marine at this stage will fall under the corporate tax. Going forward, it will be easy to bifurcate between the 2 because Knowledge Marine and Engineering Works Limited would be carrying out the vessel chartering and rating business, which will fall under the tonnage tax scheme and subsidiary of Knowledge Marine, which is Knowledge Shipyard, shall be doing the shipbuilding activity will fall under corporate tax.

And 1 last question. So with the long-term borrowing being increased and we also did a preferential issue recently, do we have any specific CapEx plan over the next 12 to 18 months? Or do we see any expansion towards the shipbuilding?

So the CapEx plan presently includes buying of 2 dredgers. -- adding about 12,000 cubic meter of hopper capacity. This same can be implemented as early as less than 90 days, if all the things fall in place as desired by the company. Also, we are spending money for building and developing the shipyard at this stage. So yes, that is a long-term plan, which will take at least a year for development of the shipyard. But the CapEx that is to be done on the dredges, the larger dredges will be done as early as 3 months.

The next question comes from the line of Vishal Varma with Convergence Capital.

Congratulations for the whole team for River Pearl 47. I had a few questions, which is being answered beautifully by you regarding the EBITDA as well as the debt. Now I have 1 -- I have 2 questions, actually. So the outstanding of INR 24 crores from dredging cost, for which you have already received INR 8 crores and the rest INR 610 crores is outstanding. So if you can update -- give any update on that by then can we receive as well as if there is any litigation risk for that INR 16 crores?

So -- we completed the Mongol dredging contract under DCI for Mongol fishing harbor for government of Gujarat. The contract had -- we had to build for the dredging work, so a unit rate contract, we did certain additional work in terms of additional tolerance that was required. There was some idling and there was an interest cost. So instead of going for litigation, we have tried to work with the DCI and the state government, and we have received 2 out of the 3 additional claims preferred by the contractor. The third one is currently being discussed at various stages, and we are hopeful that we shall receive the same in the current financial year.

Got it. And the second question I had is, we are entering into ship buildings. So if you can help us understand what type of ships or what is the size of steps you are planning to build -- is it fully hedged big vessels or smaller vessels or petroleum kind of ship?

So the yard is being designed for vessels from the length of 10 meters to 15 [indiscernible] and a draft of 5 meters. There are various sectors which will fall within this category being mooning moods, tug boats, surveys boats, all tankers, parties, and they are required all over the globe, including India and the neighboring countries as well. So we are looking at smaller vessels, not the larger vessels.

Okay. So we have also planned of supporting these ships, right? other controls.

So we are doing marketing right now, in Europe. Once the yard is fully ready and functional, we have tied up with various designers who work with the ship owners in Europe and the designs that can be made functional still within this yard with the layout. We are projecting 14 when the yard is fully functional, being able to build and deliver 14 vessels per year. And we are currently marketing that. We believe the orders -- the export orders will start flowing in either Q3 or Q4 of the current financial year.

Okay. Got it. All the best for the future.

The next question comes from the line of Sarang Joglekar, with Vimana Capital.

My question is on the CapEx. FY '27, what is the CapEx number you're looking at?

We are looking to incur and do CapEx between INR 400 crores to INR 500 crores in the current financial year.

Understood. And this will be on like how will the split pressure shipyard?

So close to INR 100 crores is on the shipyard. Balance will be acquisition of dredgers and tugs for the company.

Understood. And currently, how much is your cash balance, including the fixed deposits?

So stands in excess of INR 350 crores. Some of it is actually lean marked towards some of the bank guarantees given to various boards. So free cash flow would be close to INR 300 crores.

INR 300 crores is available for CapEx, right?

Yes.

Understood. And rest of it you'll be able to do it at your or internal accrual from that?

It will be either through debt. Or we will see if we can -- if required, we look at the equity route as well, depending on the current market situation and the availability of the vessels in the market.

And what cash flows or operational cash flows are also pretty strong. So that's how we can to understand this INR 500 is pretty achievable?

We always try to retain certain cash in the company 30% of the top line that is to be achieved by the company, we usually keep that is in cash balances.

The next question comes from the line of Pankaj Sachdeva with Avis Capital.

I apologize I joined a little late and I missed the update management gave. So my apologies if my question is covered as part of that. So I have 2 questions. One is regarding the Q3 investor call, we actually did last time. And there were 2 things which were mentioned over there. One was about the top line. We were told that INR 90-odd crores top line, which we achieved in Q3 is kind of new normal for us. But we see a meaningful decrease in Q4 numbers? And I just heard that you explained one of the projects, the billing not carried forward to Q1. Is there the reason of that dip? And if yes, then what is the quantum of billing, we are looking forward to achieve out of that in Q1? In the same meeting, we were also told that the DSOs would be in the range of 45 to 60 odd days. And then we were planning to achieve those time lines -- those numbers by end of this financial year, which we concluded. So -- but the numbers which have presented to us, they show a very different picture. So if you can just help us putting some more color on that. I have a second question I will ask once you are able to respond on this.

I would like to answer the first question. The guidance was on margins. And revenue will continue to increase, not sustain the same. So a little clarity on that, that in terms of margins, we will continue to have similar margins. Regarding the better days, we said that we -- it falls between 45 to 60 days, and we are trying to bring them within that range.

But we are still -- as we speak, we are quite far away from that, right? Is there a reason for that? Or I mean, is there some one long outstanding, which is kind of hitting us on that? Or is there something else?

So that's the INR 16 crores outstanding that I discussed in the call before. That's only one of the outstanding. That is not the regular bidding. That's the claim that we have preferred that you are seeing, which is one-off, not for each and every bidding.

Okay. And regarding the top line, so what is the new normal we should expect on a quarterly note? I know you explained the guidance of 30-odd percent growth on top line for the next 2 years. Is there some quarterly guidance we can expect?

So see, typically, during the monsoon quarter 1, quarter 2 monsoon months, it is lower. As soon as the monsoons get over the season opened up. And the third and fourth quarter, the numbers are higher than the first and second quarter. I would like to restrict myself to a yearly number rather than the quarterly number at this stage.

No problem, sir. No problem. And my second question is regarding the overseas subsidiaries, both Bahrain and Myanmar. On the Bahrain, we saw a good top line, INR 20-odd crores. Is it a negative EBITDA or negative margins on that account? That's one. On Myanmar, we see a significant drop on our revenue from last financial year. Can you help us some color on that?

So Bahrain, we presently are not doing any operations. The vessel has been moved out and it has been gainfully deployed in India. As I mentioned on the earlier question, once the situation normalizes, there is good opportunity there. But we are presently not looking to put the vessel at risk wherein there is no execution -- evacuation plan from there, property evacuation plans and proper insurance covers. So once the situation normalizes, we will recommence the operations in Bahrain. Presently, there is no ongoing work in Myanmar, even the vessel that was engaged in Myanmar has been gainfully deployed in the port of [indiscernible] in the state of Gujarat right now. So that is the reason. So once the Myanmar contracts come up again and we have additional fleet, additional vessels available for that contract, you would see revenues flowing in from that segment as well.

I have 1 more question. I'll join back the queue.

The next question comes from the line of Shubham, an Individual Investor. Since there's no response from the participant, we move to the next participant who is Saurabh Gupta with financially free.

Sir, as you have just mentioned that Q4, our revenue got dip because of one-off event and the same reason for dip in the margin. So if I adjust that and see our full year picture, then full year might be 30% growth with the 40% EBITDA margin. So if we adjust and see the numbers. So as you have just told in your opening remarks that you are aspiring or doing vision of 30% growth in FY '27 and '28, with margin of 35% to 40%. So is my understanding correct that going forward, our margin may dip 1% to 2% because of the pre OpEx that we are doing?

No, the margin should not dip. We always try to sweat the asset better and better year-on-year. So margins tend to improve going forward.

So if I adjust and see the number, the EBITDA margin for the year of FY '26 around 40%. So are you saying that this 40% can reach to 42%, 41% in coming years?

There is a fair chance for that.

Okay. Okay. And the second question that I have, FY '26 CapEx, where you have told around INR 500 crores. So what is the funding mix for that?

So we have current cash in hand. Also, we have aligned debt. And if further future projects that can be executed by the company, then we will even look at the equity option. So these are the 3 avenues available for us. We will look at cash and debt first before looking at the equity option.

Okay, sir. And the last question that I have is on tonnage tax. So what will be the tonnage tax that is applicable on us in FY '27 or '28 going forward on a consolidated basis?

So tonnage tax is a multiplier of the GRP of the vessels. It's a typical calculation. It will depend on if -- it will change if we add further vessels to the fleet, but the percentage will not go beyond 0.1% of our revenue, which is from chartering or dredging services.

So on a consolidated basis, what percent percentage of tax we can see in FY '27 and going forward?

So if we see the -- we are looking at shipbuilding revenue which will grow year-on-year. For the current year, we believe the shipbuilding, a mix will be 20% from shipbuilding, 80% from dredging and chartering services. So the 20% revenue generated from shipbuilding the resultant PAT shall attract corporate tax and balance 80% of the revenue generated from the chartering and dredging services shall attract tonnage tax.

The next question comes from the line of Shubham Kari with 3A Financial Services.

So I can see that the other expense increased a lot this quarter, and it was the same last Q4 FY '25 as well. So is there any seasonality aspect in this? Or how do I see it?

So in quarter 4, the other expense will always be higher as compared to the 3 quarters of the reason is the CSR expense that we do in quarter 4, but down the line, we will streamline that as well. We will bifurcate the CSR in 3 quarters or 4 quarters coming ahead. And other expenses, some of our expenses relating to insurance and other fall from Q4, and the number of vessels that we add will attract other expenses as well. And the 2 projects that we told JNPT and [indiscernible] also had some of expenses falling other expenses or how the other expenses have increased.

Okay. Can you give the quantum of the revenue that was delayed from Q4 to Q1 of JNPA and [indiscernible].

It would be approximately INR 60 crores.

INR 60 crores. Okay. And do we see any impact of the West Asia war on our operations as such except Bahrain?

So there has been a substantial rise in fuel price in purchase of bulk fuel -- but then all of our contracts have a fuel pass-through, so it hasn't resulted into any negative impact on the company.

Okay, sir. And if I can squeeze one last one. What sort of EBITDA margin do we see in the shipbuilding side of the business?

So we you usually see an EBITDA margin of 35% to 40% in the dredging. For the shipbuilding before the subsidy, it will lie between 25% to 30%. If we build in the subsidy, it will fall under the same 35% to 40% range.

Why is that, sir?

So presently, the Government of India provides for a subsidy of varying between 10% to 15% on various vessel construction. So excluding the subsidy coming in from Government of India, that at will be 25% to 30%. If we include the subsidy amount, then it will be between INR 35 crores to INR 40 crores.

And we get the subsidy from like when we start our operations were right? Or is there a delay or a lag?

No, the subsidy is applied on each and every vessel that is built by the shipbuilding company, and it's applicable to each and every vessel. It's applied before the construction of the vessel. And usually, the decision on the subsidy comes in within 60 days of application.

The next question comes from the line of Vishal Verma with Convergence Capital.

Sorry, I [indiscernible]. I had a question regarding the fuel pass-through contract -- that has just been answered. Thank you very much.

The next question comes from the line of Nikhil, an individual investor.

Actually, I have one question. Can management share the current bid pipeline for FY '26 '27 segregated into domestic contracts being quoted and international contracts being coded. Further, what is the approximate value of each segment and where the management see the highest probability of order mills?

So presently, the INR 2,000 crore bid pipeline that we have as of today is for all domestic orders only. And we are not looking at -- at least for this particular second quarter, we are not looking for adding any international orders. For the quarter 3 and quarter 4, we will start adding international orders for the Shipbuilding segment. Out of the INR 2,000 crore bid pipeline that we have, the dredging shall be close to INR 950 crores. Shipbuilding order book will be close to INR 400 crores and the balance 600 towards the green tugs.

The next question comes from the line of Pankaj Sachdeva with Avis Capital.

I have a very quick question. We can see a short-term borrowing in balance sheet. You also see a INR 270-odd crores fixed deposit on the balance sheet. So I'm sure financially, it's not a prudent decision to have both the things flying at the same point of time. Is there a business reason or is that just more of a conscious decision you guys have taken?

So the short-term borrowing was for a particular project in JNPT. And the cash that you see is particularly designated for CapEx acquiring of a particular vessel. So if some component of that cash was to be utilized for this project, then we would have fallen short in the acquisition. So it's a conscious decision.

The next question comes from the line of Harsh Shah with Avana Investment Management.

So I had a question on the subsidiary, what would be your shareholding in the subsidiary and move with the other shareholders for the shipbuilding subsidiary?

So in the shipbuilding subsidiary, Knowledge Marine today is holding 51%, and we had acquired the shipyard and the other Taloja facility from the previous owners and the people working with the company. And going forward, that 51% will be increased to 75%, which will be owned by Knowledge Marine. And the rest will be a mix of a few of the other part owners and upcoming shareholders.

Okay. And how would be the capital infusion in the subsidiary lease?

So presently, it is in the form of equity, and it is -- the equity will be infused in proportion to the shareholding.

Okay. And second question would be on how is the green tug construction progressing? So in detail, various components, machineries, thrusters, all those orders have been placed. The yard is being constructed. The assembly line is being laid. We believe as soon as the monsoon is over, you will see physical construction of the tug taking place and before or somewhere through the mid of the upcoming monsoon in the year '27, you will see the green tug fully constructed.

Next question comes from the line of Saurabh Gupta with Financially free.

Sir, as we have just mentioned that INR 60 crores of our revenue of Q4 has been still over to Q1. So is the understanding correct that Q1, we can see INR 110 crores or INR 120 crores of revenue with around 40% of EBITDA margin?

See, this revenue will be -- the INR 60 crore revenue will be recognized in Q1. I believe it is going to be more than INR 100 crores, the revenue for Q1, and EBITDA margins should be an improvement than 40%.

More than 40%?

Yes.

Thank you. Ladies and gentlemen, due to time constraints, we would take this as the last question for today. Any further questions e-mailed to the IR of the company. On behalf of Knowledge Marine and Engineering Works Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.