Bharti Shipyard – Smooth sailing!

Bharti Shipyard (CMP Rs 337) is India’s premier ship building company. The company was founded by IIT technocrats and is engaged in the design and manufacture of various inland crafts and vessels. The company manufactures a wide range of product from inland cargo barges, deep-sea trawlers dredgers Cargo Ships, Tankers and other support vessels required for the offshore industry. Bharti Shipyard also undertakes ship repair activities at its yards. Besides above, Bharti Shipyard also manufactures Offshore Patrol Vessels, Container Ships & Chemical Carriers

The revised regulation for existing single-hull tankers says that tankers which are single hull should be phased out or converted to a "double hull" within a prescribed period of time. This has created a huge demand for the ship building industries across the world.

The major shipbuilding facilities in South Korea, Japan China and Brazil have been booked with orders that are likely to keep facilities in production till 2009. While ship building could be termed as a cyclical industry we are yet to see the cycle take off, hence the visibility of earnings (for the next 3 years) is very high.

Meanwhile the local players have also been pumping in orders for ships used in exploration. The company also bagged an order for Rs 120 crore from Reliance for construction of 6 vessels including 1 diving support vessel

The shipbuilding and ship repair activities are carried out at the company's shipyards located at Ratnagiri (Maharashtra), Ghodbunder (Thane, Maharashtra ).

The company caters to demand from both domestic and foreign customers. The domestic customers include port trusts, inland water transport operators and leading corporate groups like Reliance Industries Limited, Great Eastern Shipping Corporation Limited (GESCO). On the export front, the company has supplied wide range of vessels to Europe, Middle East, Singapore, etc.

Recently the company signed an agreement with Great Eastern Shipping Co. Ltd. (GESCO), Offshore Division, for the supply of a “Self Propelled Cantilevered Independent Leg, Jack up Drill Rig”. This specific equipment is manufactured by only nine companies’ world wide. The company stated that “Bharti’s entry into this niche market segment will give a major boost to its offshore manufacturing activities”.

Yes, Nawendu. In my opinion this shipbuilding sector itself is bullish and we can play it through Bharati, ABG (as well L&T) due to visibility of earnings, healthy order book

Mainly three countries, namely China, South Korea and Japan, today control 78% of the world shipbuilding activities. These countries are believed to aid their respective companies by giving subsidies.

In lieu of no subsidy extension, the industry has been asking for infrastructure status. There has been talk that there is a possibility that the industry may get an infrastructure status at the expense of subsidies. If the sector gets the infrastructure status, it stands to gain more in terms of absolute profits as per indusrty experts.  

 Basant,

I would like to clarify that the article in ET is a simple coimcidence. I have read the article yesterday evening, and there were absolutely no chance, that anybody can guess what is going to come in ET.