GRSE Q3FY20: Profit after tax up by 49% in last 3 quarters

Kolkata: The state-owned shipbuilder GRSE has published results for the third quarter of FY20. Compare them with the same quarter of the last financial year, you will feel dismal. Look at the larger picture, of the last 3 quarters together, you will get a different point of view to look at GRSE's growth story. In the Q3FY20 the defence PSU's earning per share (EPS) is at Rs 2.57 which is 38% down from Rs 4.13 in the corresponding quarter of the last financial year. The EPS in the past 3 quarters of FY20 together is at Rs 9.93 which is 49% higher as the EPS for the same period of FY19 was Rs 6.66. Similarly, the total income of GRSE has been decreased by 21% to Rs. 420.87 crore in Q3 while in three-quarters of FY20 it is up by 13% to Rs 1149.32 crore.

The EBITDA (Margin) is 12 % in GRSE Q3FY20 against 15% in the corresponding quarter of last year. Thus, registering a decrease of 3 %. Profit After Tax (Margin) is 2% down to 7% in the current quarter against 9% in the same quarter of last year

Operating Revenue of the shipbuilder is also down by 24% in the last quarter to Rs. 369.63 crore. Same is up by 9% to Rs 976.61 crore in the last 9-month permutation. The EBITDA (Margin) is 12 % in GRSE Q3FY20 against 15% in the corresponding quarter of last year. Thus, registering a decrease of 3 %. Profit After Tax (Margin) is 2% down to 7% in the current quarter against 9% in the same quarter of last year.

The management's side

"The shipbuilding process is a highly complex process & construction activities involve a long gestation period. In this process, the shipyard plays the role of integrator while vendors/suppliers/OEMs work with the shipyard closely for continuing with the construction activities" said the management in a press release. "With this nature of business of warship construction, year-on-year performance is considered relevant than the quarter-on-quarter performance" it added.

Operational Highlights

GRSE is currently executing 06 Projects with the construction of 19 Ships. Of these Projects, 05 Projects are for Indian Navy and 01 Project is for Indian Coast Guard. As on 31 Dec 2019, the defence PSU's Order Book position stands at Rs. 27,047 Crores with shipbuilding projects related Order Book Value of Rs. 26,732 Crores. During the reported period the company delivered 03 Ships, 01 for Indian Navy and 02 for Indian Coast Guard. With these deliveries, the company delivered 05 Ships in total during the 10 months period from Mar 2019 till Dec 2019. Under Indian Navy Contract for construction of 03 Advanced Stealth Frigates with total Contract Value of Rs. 19,295 Crores, the company recently did the Keel Laying for 2nd Ship which is ahead of the contractual timelines. The construction of the 1st Ship of this contract is progressing satisfactorily and the company has plans to have the start production for the 3rd Ship shortly. In respect of Survey Vessel (Large) Project of Indian Navy for 04 Ships, the company has done with the Keel Laying for the 1st Ship and start production for the 2nd Ship during the reported period.