About Goa Shipyard Limited Unlisted Shares

(i) In 1961, after Goa’s liberation, the potential of a small shipyard called “Estaleiros Navais de Goa” to contribute towards this national aspiration was recognized. The Yard later renamed Goa Shipyard Limited, was consciously shaped, developed and upgraded to become one of the country’s premier defense shipbuilding hubs on the west coast.

(ii) Goa Shipyard Limited, under the administrative control of the Department of Defence Production, designs and builds sophisticated ships for the Indian Navy, Coast Guard, and other customers. It also builds commercial vessels like Offshore supply Vessels, Oceanography & Coastal Research Vessels, Fishing Vessels, Dredgers, Tugs, etc.

(iii) Goa Shipyard Ltd. develops the growing shipbuilding needs of the country’s naval defense sector. Goa Shipyard is one of the few Indian shipyards equipped with an in-house design capability, GSL carries out its own R&D, in the process developing an in-house product range that efficiently meets the specific requirements of clients in the defense as well as commercial sectors in the fields of design, construction, repair, and modernization of vessels.

(iv) Clients of the Company

(v) Revenue contribution

Goa Shipyard has a workforce of over 1700 skilled personnel and over 265. Qualified Engineers and Naval Architects.

UnlistedZone Review FY18-19

a) The company is into the business of shipbuilding and ship repair, so the consistent uptick in the revenue growth is difficult. The revenue is dependent on getting timely projects in a year, and which year the project is getting completed. The dip in revenue from 1462 Cr to 986 Cr was due to delay in finalizing projects of Landing Ship Tank from Nigeria, Multi-purpose off-shore Patrol vessel from Mauritius and Patrol offshore vessel from Ministry of Home Affairs. However, all projects are in the near finalization stage.

b) The company has excellent operating and profit margins.

c) The company in the last 3 years i.e. 2017,2018 and 2019, has generated a free cash flow of ~1000 Cr.

Review of Goa Shipyard Unlisted Share for FY20-21

a) The Company achieved Gross Revenue of Rs 979 Cr as against Rs 1,072 Cr in the previous year and Value of Production (‘VoP’) of Rs 827 Cr in FY 2020-21 as compared to Rs 903 Cr achieved in FY 2019-20.

b) Profit Before Tax reported at Rs 172 Cr as against Rs 265 Cr in previous year and Profit After Tax at Rs 128 Cr as compared to last year’s figure of Rs 198 Cr.

c) Halting of construction activities during the first quarter of the financial year due to COVID-19 has impacted the revenue and profit margins.

d) As on 31 Mar 2021, the Company has a healthy order book of Rs 14,120 Cr (approx) which majorly consists of two OPVs for the Indian Coast Guard and two Frigates of the P1135.6 series for the Indian Navy which ensures growing revenue and profitability in coming years. Recently concluded contract valuing Rs 559 Cr for two PCVs has further strengthened the order book position.

e) Currently, in the Unlisted market, it is available at Rs. 285 per share. So, its market cap is ~ 3200 Cr.

f) With Average EPS of 12.33 in the last 3 years, the Goa Shipyard is currently available at P/E of 23x.

g) The Defence Industry in India is experiencing significant and progressive change with opportunities for growth. The Indian government has set the defence production target at US$ 25 billion by 2025 (including US$ 5 billion from exports by 2025). To support defence modernisation, in the budget 2021-22 the defence capital outlay has been increased by 18.75% from the preceding year.

Review of Goa Shipyard Unlisted Share for FY22-23

1. Goa Shipyard is engaged in the business of Ship Repair and Ship building. Its listed peer in the same line of business is Cochin Shipyard.

2. In Fy23, it has earned an operational revenue of INR 869 Cr vs INR 740 Cr in Fy22.

3. In Fy22-23, it has signed a major contract of INR 6000 Cr for construction of seven Next Generation offshore Patrol Vessels for Indian Navy.

4. Total order book as on 31.03.2023 is INR 20k Cr to be executed in next 8 to 9 years.

5. In the Fy23, the company has paid a dividend of INR 5.40 per share.

6. Currently, they are building two Pollution Control Vessels and 8 Fast Patrol Vessels (FPVs) for Indian coastal guard and both these projects designed is completed and 4 FPVs physical construction started.

7. They are also building 4000 T Floating Dry Dock for Sri Lankan Navy and the design is already completed and construction also started.

8. Ship repair is also another good revenue generating business for the company. This year they have generated ~INR 160 Cr from ship repair.

9. Under government initiative of INR 40K Cr export target by 2025 company is finding new clients outside India. They are aggressively tendering for global tenders.

10. Company is also building an AI based Condition Monitoring System that will help yard to undertake timely maintenance of critical assets and avoid failures.

11. Ship construction contributed INR 509 Cr, Ship Repair INR 160 Cr and General Engineering Services 156 Cr.

12. PAT has increased from INR 100 cr in F22 to INR 150 Cr in Fy23.

13. In the unlisted market it is available at INR 375 per share and with total shares outstanding 11.64 Cr shares, the Mcap is 4365 Cr. P/E is 28x while the Peer Cochin Shipyard is trading at Map of 14000 Cr and P/E of 42x. So, it looks cheap as compared to Cochin Shipyard. However, when IPO will come we do not know.