This article first appeared on GuruFocus .
Release Date: November 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Garden Reach Shipbuilders & Engineers Ltd ( BOM:542011 ) reported a 45% year-on-year increase in revenue from operations, reaching 1,677 crores.
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The company's profit after tax grew by 57%, moving from 98 crores to 154 crores.
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The order book is robust, standing at INR 20,205.56 crores, comprising 10 shipbuilding projects including 13 warships for the Indian Navy.
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The company has successfully delivered the first ship of the P17 Alpha project ahead of schedule, with the second ship ready for contractor sea trials.
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Garden Reach Shipbuilders & Engineers Ltd ( BOM:542011 ) is expanding its shipbuilding capacity from 24 to 32 ships by 2026, with plans for further expansion through brownfield and greenfield projects.
Negative Points
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The company faces potential challenges in maintaining revenue growth if high-ticket orders like the NGC and LPD projects are delayed.
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There is a concern about subcontracting costs rising alongside revenue, which could impact profit margins.
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The company is in the early stages of commercial shipbuilding, which currently yields thin margins compared to defense projects.
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The expansion plans, including brownfield and greenfield projects, are capital and time-intensive, with a conservative timeline of 3 to 4 years for completion.
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There is uncertainty regarding the timing of new orders, which could affect the order book and revenue projections if delayed.
Q & A Highlights
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Q: Can you provide details on the recently approved AONs, specifically regarding the LPD project? A: Commodore PR Hari, Chairman and Managing Director, explained that the LPD project consists of four ships with an order value of approximately 35%. The expected players for this project include MDL, HSL, GRSE, and L&T. The contract is anticipated to be signed in about 2 to 2.5 years, with a project duration of 48 months for the first ship and subsequent ships every six months.
Q: What is the status of the next-generation Corvette project, and when can we expect the contract to be awarded? A: Commodore PR Hari stated that the contract negotiations are in the final stages, and they expect the contract to be signed in the next 3 to 4 months. The project is a high-value contract, and orders are expected to trickle down during FY27, starting from the first half.
Q: With the current order book and execution pace, do you foresee any revenue decline in the next few quarters? A: Commodore PR Hari assured that there is no expected revenue depletion in the next 3 to 4 quarters. The ongoing projects, such as the P17 Alpha and anti-submarine craft projects, are progressing well and are likely to extend into the next year.
Q: Can you elaborate on the margins for the NGC order and the reason for higher subcontracting costs this quarter? A: Commodore PR Hari mentioned that the NGC project is expected to yield margins beyond the typical 7.5% for conventional shipbuilding. The higher subcontracting costs are attributed to increased outsourcing of non-core jobs as revenue grows, which is a natural phenomenon.
Q: Given the strong revenue growth in the first half, do you plan to revise the revenue guidance upwards? A: Commodore PR Hari stated that they expect to maintain the 25 to 30% year-on-year growth trend during the current financial year, despite the strong performance in the first half.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
