Sadhav Shipping Limited (SADHAV) Earnings Call Transcript & Summary

Good evening, everyone, and welcome to the Q1 FY '27 Earnings Conference Call of Sadhav Shipping Limited. Today, we have with us Mr. Vedant K. Choudhury, Whole-Time Director and Chief Executive Officer; Mr. Shyam Sundar Banik, Executive Director, Finance and Accounts; Mr. Nilakantha Sahu, Chief Financial Officer; Ms. Madhuri Rathi, Company Secretary and Compliance Officer. We will begin with the opening remarks from the management, followed by an interactive Q&A session. Please note, this discussion may include forward-looking statements, which should be viewed in conjunction with the risks and uncertainties that the company faces. I now hand the conference over to Mr. Vedant K. Choudhury, Whole-Time Director and Chief Executive Officer, for opening remarks. Thank you, and over to you, sir.

Yes. Thank you. Good evening, everyone, and thank you for joining us at Sadhav Shipping Limited's Q1 FY '27 Earnings Conference Call. We appreciate the continued interest and engagement from all stakeholders, investors and analysts. I'm joined here with our Executive Director of Finance, Shyam Sundar Banik; CFO, Nilakantha Sahu; and our Compliance Officer, Ms. Madhuri Rathi. I will briefly take you through our Q1 performance, key operational developments during the quarter and our priorities for the year ahead, following which we can be happy to talk about any questions or answers. The Q1 performance has been a positive start for the financial year for Sadhav Shipping. We've had -- as we have discussed in our last earnings in FY '26, FY '26 was a largely foundation-building year for the company. We undertook several important initiatives, including the mobilization of Kandla site, the contract of Chennai port and other strong contracts and capabilities that we have built. These initiatives were aimed at building a stronger platform from which we can talk about scaling up our FY '27. We are now beginning to see the benefits of these initiatives. And during the quarter, we have reported a revenue of INR 31.2 crores with an EBITDA of INR 8 crores, a PAT of INR 3.4 crores and an EBITDA margin of 25.3%. The quarter reflected steady execution across all management service contracts, supported by continued and operational focus on disciplined capital deployment. At the same time, we remain focused on strengthening the quality and visibility of our revenue base, particularly through long-term contracts and recurring contracts. Our existing contracted businesses provides meaningful revenue visibility with several contracts extending across multiple years. A significant development during the quarter was the award of a 7-year pilot launch services from Mumbai port valued at approximately INR 18 crores. This is a strategic importance to us because it adds another long-term recurring services contract to our portfolio and strengthens our presence in Mumbai port as well. We've also gained presence in JNPT through long-term contract deployment of 2 FRP boats. This basically strengthens our pilot boat capability to 4. Back to that, what we have done is we have placed orders for 4 high-speed FRP pilot and security boats with an option of 2 additional boats. And this is a deliberate fleet expansion effort actually. These vessels will strengthen our capabilities in piloting and security services that we provide, and it will add our capacities for the future as well. We have been diligent to reduce our interest cost with the capital infusion through the last preferential round, and our approach to fleet expansion remains disciplined. We intend to deploy capital against visible businesses opportunities and ensure that new assets contribute meaningfully to the revenue generation and returns. We have been able to capitalize on the Iran -- Iran-U.S. war with deployment of our vessel in high-risk areas and gaining on the charter rates as well. So, the way forward, as we move through '27, our focus remains on expanding our portfolio in long-term services and annuity contracts, particularly in offshore logistics, port services and specialized marine contracts. We will continue to increase our contribution from offshore businesses, improve our vessel utilization and strengthen operational visibility. At the same time, we will selectively invest in fleet and fleet expansion and capabilities which where we have clear business visibility while evaluating strategic opportunities that can broaden our service offerings. We will also be investing in technology-driven solutions to solutions to issues faced by the ports today. Our objectives are to capitalize on the Maritime Amritkaal Vision and the various initiatives of the Government of India and the state governments. Overall, our objective is to build a more predictable, scalable and profitable maritime services platform while maintaining a disciplined capital allocation. To continue, our Q1 F1 has been a constructive year to start with. The company remains focused and disciplined on execution, strengthening its recurring revenue base and building capabilities for sustainable growth. With increasing investments in India's maritime infrastructure and growing demand for specialized marine services, we believe that Sadhav Shipping is well positioned to capture the opportunities ahead and create long-term value for our stakeholders. With that, I would like to thank you once again for joining us. And now I hand over the call for the Q&A session.

[Operator Instructions] First question from the line Amarnath Reddy from Andhra Pradesh Grameena Bank.

Am I audible?

Amarnath sir, you need to speak a little bit louder.

Sir, am I audible?

Yes Amarnathji.

Sir, in the presentation, I have gone through the presentation of Sadhav. So, it was assured by the management that in the last quarter, order book also will be disclosed. I don't know what is the reason it is not disclosed. And second thing, revenue projection, you have mentioned in the last conference call more than 20% and whereas profitability will be more faster than revenue because of the optimal utilization of the resources. So when I see the revenue for this quarter, it is INR 31 crores compared to last quarter, INR 34 crores. So it is flat revenue. And during the monsoon season, we may expect Sadhav Anusha to stop the operation. So revenue may further go down. So what is the channel where we can increase the revenue to maintain that 20% guidance, sir?

Okay. Thank you, Amarnath, for the question. So unfortunately, we don't have a quarter-to-quarter comparison, Q1 to Q1 comparison. However, what we have done is a Q1 -- this Q1 to last Q4 comparison. So it generally happens is that in one of our port services contract where we have to do the coastal logistics, the cargo -- the cargo is actually transported in a much more hurried fashion before the monsoon sets in. So that is why you will see a Q4, which is a higher number at any time. Normally, you see our H2 on a higher -- H2 is always more than H1. But then if you compare our Q1 this time versus our H2 of last year, so I believe H2 of last year was about INR 34 crores or INR 35 crores, whereas our Q1 itself is INR 31.2 crores -- Q1 is INR 31 crores. So, and that is where I would like to again come back to you. Yes, during the monsoon season, we face a difficulty because some of our assets are not deployed because of the season. However, we have managed to tide over this and take contracts outside the weather window and also perform that as well. So the next question is, obviously, when you said it rightly that Anusha will not be performing during the monsoon season, and that is where we will see a loss of revenue. At the same time, we see the deployment of Saroja Blessing in foreign waters where we are actually performing there and trying to make up for the lost revenue.

So you will maintain the guidance of 20% revenue and more than 20% in profitability for the financial year, sir?

Correct. So as far as the financial year targets are concerned, yes, we'll maintain the same guidance. As far as the Q2 targets are concerned, we may not be -- like it really depends on how the entire season goes about. So it may or may not be as well as Q1, actually, I would say.

Okay. Sir, order book, related question.

So I'm sorry if the order book has not been placed. I will ensure that we will have it placed on our website by -- in the next couple of weeks. We are also trying to revamp our website. I think that is the reason why it has gone through -- fallen through the cracks. But as of today, we have an order book of about INR 350 crores. That's what I can say.

Okay, sir. Sir, one last question, then I'll wait in the queue. Regarding the Odisha project, is there any update? And I have seen in some articles that in Maharashtra also United Petro Sadhav it moved a bit as far as official meeting with the government is concerned. So any light on Odisha and Maharashtra project update on United Petro Sadhav?

Okay. So on the United Petro Sadhav, on the Odisha front, we have been still trying with the government of Odisha. We have had several rounds of site visits, and we are expecting another round of site visits in the next couple of weeks. We are in touch with the departments -- the concerned departments and the competent authority. However, it is a time-taking process for the land allocation over there. And I must thank our partners, UPG Group to still keep their continued interest in the project because it is very easy to lose interest in a project which is taking much time.

Correct.

At the same time, because it is taking a lot of time, our partners had also explored a location in Maharashtra to have a similar project. And we are working with the government of Maharashtra and how to make it possible actually.

So which one may take off first, sir, Odisha or Maharashtra?

Until it can happen, I cannot commit right now, right?

[Operator Instructions] We have our next question from the line of Mandira from Invesco.

So a couple of questions. If you could help me with what is the revenue contribution expected from Q1 contract win in FY '27?

Okay. So we have won more than a couple of contracts in Q1 FY '27, Mandira. So we expect to have approximately INR 3 crores to INR 4 crores in revenue contribution on a per year basis.

Got it, sir. And secondly, to what extent can be the port services business scale without a corresponding increase in capital expenditure?

So that's -- so there are -- in port services, Mandira, I'll just briefly explain you. We have a bouquet of services actually. So it can vary from piloted services where we use the ports. We can have manpower services. And we -- so we can scale up in the manpower services without having any capital expenditure or any technical services to the port that we can give without having any capital expenditure. But by far, the one which hits the top line is the one which we will lead the capital expenditure.

[Operator Instructions] Next question is from the line of from [ Aniket Redkar ], an individual investor.

I have few questions. So sir, recently, the contract which we got, so can you throw some light on -- related to this Mumbai port authority contract? Can you give more details on it?

Okay. Aniket, I will just request you to be a little louder. I could hear you though, but I think my members could not hear you. But any which way, so you asked that you want some light on the Mumbai port contract which we were awarded.

Yes, yes.

So we were awarded a pilot port contract from Mumbai port, where we have to provide 2 pilot boats to Mumbai port for a 7-year period. This is a total value of about INR 18 crores.

Okay. Okay. So sir, is this INR 18 crores or INR 218 crores?

I'm sorry, it's INR 18 crores.

Okay. Okay. And sir, when will this -- the full financial impact of this contract started reflecting in our company's financials?

So we have already like we said earlier, we've already placed the orders for the boat for the JNPA and the Mumbai port with Wadia Boat Builders in Gujarat. We expect those boats to be delivered within the next 5 to 6 months after all the trials and testing. And I think by January or February, we will start the operation. So it's only in FY '28, you will see the full financial year effect on that actually.

Okay. Okay. And sir, does the execution of this contract require any incremental CapEx?

Incremental CapEx negative. All the CapEx is built into our initial project cost actually.

Okay. Okay. And sir, what is the current pipeline of port service opportunity Sadhav is pursuing currently?

So this is kind of a -- I would say, it's a competitor-sensitive information. I'm not really in a position to give you right now. But most of it is within the purview of what we are currently doing. And some of it is actually trying to aim for higher quality work.

Okay. Okay. And sir, one last question. Could you give us a breakup of Q1 FY '27 in terms of across our offshore logistics and port services, oil spill response and other services we provide. So if I get a breakup, that would be helpful.

At this position, I will not be able to give you a breakup. But in a rough manner, I can -- you're asking for the FY '27, right? -- projected for FY '27.

Yes, current quarter-on-quarter.

Current quarter.

Yes, sir.

So we've done approximately INR 16.3 crores in offshore logistics.

Okay.

Sorry, we have done INR 25 crores -- INR 25.4 crores in offshore logistics, INR 3.13 crores in oil spill response and INR 2.68 crores in port services. Total INR 31.21 crores.

[Operator Instructions] We have our next question from the line of Rohit Mehra from SK Securities.

Pardon me if I'm asking the repetitive question as I joined late. So my first question is with the 4 new FRP pilot and security boats being added, I just want to understand what kind of revenue contribution can we expect once these vessels are operational?

So we can expect close to about INR 4 crores per year from these 4 boats itself.

Okay. Got it. Got it. Okay. And the second question was that revenue was relatively softer in Q1, but profitability remains strong. So how should we think about the revenue trajectory in coming quarters? If you could throw some light there?

Yes. So Rohit, as I was actually trying to explain it to Amarnath earlier, we have not had the opportunity to present our Q1 to Q1 figures. This is a comparison of Q1 to last Q4 figures. What happens in Q4 is typically we tend to ramp up our -- not ramp up, but there's a lot of activities in the port services, especially in the port services and the offshore logistics that goes on. So that is why the Q4 figures or rather the H2 figures are normally higher than the H1 figures. So now to give you a comparison between Q1 and the H1 of last year. So H1 of last year was about INR 34 crores, INR 35 crores. And Q1 of this year is about INR 31 crores. So that is the comparison I would like to add on to be here actually.

Got it. Got it. Got it. And in continuation to this, could you please give me a mix between our offshore logistics, coastal logistics and port services and oil spill response?