Disc - Not invested and not biased
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Highlights Knowledge Marine Q3 FY26 concall-
Total Order book-1500 Cr with breakup below
• Dredging 409 Cr
• Charter hire 863 Cr
• Ship building 230 Cr
Bidding Pipeline - 3000 Cr
Other highlights-
• Huge demand due to govt focus for inland waterways dredging.
• Plan to invest in larger dredgers.
• Enough demand for Dredging Corp and KMEW to get business.
• Tonnage tax benefit to be applicable wef current FY itself.
• River Cruise forms part of Charter vessel business vertical. We will operate the vessels but hospitality and ticketing will be outsourced.
• River dredging mkt size will increase from 1500 Cr to 5000 Cr with new Inland waterways.
• Bahrain operations halted due to high and emergent demand in India and vessel diverted to India. We are on a lookout for another vessel in international mkt for Bahrain to resume operations.
• Dredging Corp subcontracts in current 9 months is higher than last FY.
• Shipbuilding contract for build and supply. 2 Green tugs for building and operations. Will participate in green tug tenders in various ports.
• Plan for 100 Cr investment in shipyard for vessel construction. Mix of debt and equity. No plan for construction of vessels more than 100 mtr. Can reach a topline of 500-700 Cr 3 yrs down the line.
• Tied up with a designer for green tugs for batteries. In house assembly post procurement from various suppliers.
My assessment- I see a huge revenue generation potential from the company. FY 26 9 revenue stands at approx 240 Cr so far. There’s scope for massive revenue booking in next 3 years down the line with all three business verticals firing up.
Disclaimer- Invested. This is not a buy or sell recommendation.
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Thanks for sharing the notes. Could you share the pointers on Valuation perspective? With traditional valuation metrics (i.e. PE, P/S, P/B, EV/EBITDA, OCF/MCap etc.), it looks expensive to very expensive. Appreciate your input.
Disc: Not investment. Don’t plan to. Not asking for financial advice.
If you do a peer Comparison (Ship Bldg/Infra), industry P/E avg is 42-52x whereas KMEW is at 60x, which is a premium.
Considering the fact that it’s ROE is superior to other companies in competition, and being a small company the scope for growth is more than the larger peers, it will mostly be trading at a premium.
The recent concall highlights posted above give out the tailwinds that the companies is getting from the govt push to the sector.
And frankly speaking, I don’t go into too much of valuation metrics. I go more with the macros, PESTLE, Porter Five Forces and on company front, it’s moat, order book visibility over long term, execution and other factors of profitability are key decision points for me as an investment worthy company.
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Apart from KMEW & Dredging Corp, any companies in the listed space into Capital and maintenance dredging?
Not listed but there are few like Dharti dredging ( they are doing dredging at Salal dam in Chenab river at J&K) , Sahara dredging, . Adani has their own dredging arm but it’s under Adani ports.
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Why does promoter keep selling their stake? How long do they plan to continue selling?
Disc: started tracking without position
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I agree with you. Just one observation, as guided by the management with quarterly revenues of close to 100 Cr coupled with higher PAT, it is high time to have an experienced CFO in place.
Silver lining here is that they aren’t selling in open market. Promoter stake was bought by institutions.
Disc: Booked profit on majority of the holding
results
kmew.pdf (1.1 MB)
Interesting part of results is “deferred tax” which is due to tonnage scheme from government. That will help them a long way. Awaiting management concal to understand few losses that may be due to Bahrain.
Very good results overall.
Disclaimer: I have substantial holding in the stock
I have few observations. There are many rave reviews regarding the company. It appears to be a danger signal to me. Because the promoters are selling in open market after they made preferential issue at lower price. So intention appears to be not good. I don’t know how @vikassethi sees q4 result to be good. Because QOQ there is big fall in both topline and bottomline. Only deferred tax write back has enabled them to show respectful figure. Company has not explained this decline. May be we will see the reason in concall. They have uploaded audio but I have not gone through that.
Not invested. On watch list.
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It will be deferred to Q1. Revenue to be more than 100 CR with more than 40& EBITDA. It’s a project based company. They are now also foraying into ship building for small dedgers as well as exporting ships as well. I don’t understand your concern here. You should listen to the concall. Promoters also did a small Top up in the last week post Q4FY26 results.
Disclaimer : Invested and remain bullish.
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@Prabhat_Mohanty Contrary to your view on promoter’s dilution, they are buying the stock from open market. Not sure why you feel promoter’s are diluting. Any dilution in for QIP or prefrential allotment to a stronger investor is always a good signal.
Secondly, as the concal suggested, the “tonnage tax” scheme is going to work wonderfully for them both in terms of profits and working capital.
Thirdly, they are expecting around 2000 cr worth of orders in next 3 months time. Big thing in my view.
Their long term direction is ship building is a great signal. Govenment of India’s marine focus is going to be great support for them.
All in all, they seem to be in right direction despite a few hiccups due to US-Iran war,
Disclaimer: Have investment in the stock
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Concur with your opinion. Any correction is a good buying opportunity.
The QoQ Revenue margins drop was because lf 2 projects and csr and some other expense which company does oneshot in Q4 only adjusting to that margins would be in similar 40% range and revenue would be around 120 crores but the 60 crores of revenue instead of Q4FY26 will now be recognised in Q1FY27.
One more thing the Screener’s CFO and CFI is wrong as they classified investing item in CFO but later released correct result. CFO is around 74 crores
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