Garden Reach Shipbuilders Expects Margins To Improve With Rising Exports, Better Efficiency

Garden Reach Shipbuilders & Engineers Ltd. expects the next couple of quarters to bring about a positive shift in its profit margins, according to Chairman and Managing Director PR Hari.

Amid a recent dip in margins, Hari, in a televised interview to NDTV Profit, expressed confidence about a reversal, citing several favourable factors, including improved exports, operational efficiency, and the maturity of key projects.

Hari noted that while the company's first-quarter results were promising—with a 14% increase in Profit After Tax—there was a slight decline in margins. He explained that margins could fluctuate from quarter to quarter, but the overall trajectory was expected to be upward. “Margins may dip occasionally, but they will catch up, especially as we progress with our significant shipbuilding projects,” Hari said.

The company’s substantial order book, valued at Rs 25,231 crore, primarily comprises shipbuilding projects, which contribute around 90% of the total value. This includes major contracts with the Indian Navy and several export projects. Notably, GRSE has secured four new export contracts over the past 2-3 months, including one for an European client, which is expected to bolster margins due to better pricing in the export market.

Hari emphasised that the P17 Alpha project, a major endeavour consisting of three ships, is nearing maturity and will contribute significantly to revenue and margin improvement. The first of these ships is scheduled for delivery in the first quarter of FY26, with the final ship expected by mid-FY27. This period will be crucial for revenue recognition and margin enhancement.