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.
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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