Bharti Shipyard – Smooth sailing !
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Emerging companies - Mid caps that can become large cap
Forum Discription: These are companies operating in growing markets having have certain niches or specific attributes like new sector plays. These are emerging multibaggers with high risks and high rewards.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=362
Printed Date: 03/May/2025 at 2:37pm
Topic: Bharti Shipyard – Smooth sailing !
Posted By: basant
Subject: Bharti Shipyard – Smooth sailing !
Date Posted: 17/Sep/2006 at 8:55pm
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Bharti Shipyard – Smooth sailing! Bharti Shipyard (CMP Rs 337) is 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 http://www.theequitydesk.com/forum/forum_posts.asp?TID=144 - huge demand for the ship building industries across the world. The major shipbuilding facilities in 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
Source: Moneycontrol.com
It would be incorrect to view this company on the basis of financial results only. The company trades at a PE of 15 times trailing EPS and at a PEG level of 0.5 looks attractively valued. The RoE at 33.64% indicates that the company can grow its earnings at above market averages without going in for equity dilution. If an investor applies traditional evaluating parameters like Sales/ Market cap or price to book then the stock would look expensive but these parameters tell us only about the past while this company should be bought on the basis of the opportunity in the near future
The shipbuilding and ship repair activities are carried out at the company's shipyards located at Ratnagiri (Maharashtra), Ghodbunder (Thane, 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, 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”. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
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Replies:
Posted By: nav_1996
Date Posted: 17/Sep/2006 at 10:19pm
| It would be good to make a comparison with ABG. |
Posted By: kulman
Date Posted: 17/Sep/2006 at 10:36pm
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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 I came across some information about subsidy scheme, which I wanted to share with you all:
Mainly three countries, namely The Indian shipbuilding industry sees government subsidy as a necessary concession to gain foothold in the global arena as ship-building companies in
In order to make the domestic ship building industry competitive and to ensure a more level playing field in the world market, the Indian government announced a 30% subsidy valid up to 2007 for shipbuilders in the private sector. The Indian industry expects these subsidies to be extended further. It is rumoured that the subsidies will be initially extended for a further period of another five years up to 2012, in view of government concessions to shipbuilding in countries like
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. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: nav_1996
Date Posted: 17/Sep/2006 at 10:52pm
| From what ever I have read I am not able to distinguish between Bhrati and ABG. I noticed that Sundaram Select Midcap has reduced their exposure to ABG recently. I would have ignored if it was any other fund but when it is Sundaram Select Midcap I do take of note of it. |
Posted By: investor
Date Posted: 18/Sep/2006 at 2:15pm
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Basant, saw a detailed article on Bharti Shipyard in todays ET also("Big Bucks supplement). Was just wondering if you write for them?  or just a coincidence... |
Posted By: basant
Date Posted: 18/Sep/2006 at 2:32pm
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You know I was shocked (surprised) to see the the article today in the morning. It was a peculiar co-incidence. For a moment I thought that some would say that we copied the stuff from there. Thankfully the date and the time on the post reflects the fact. I know the some guys at ET/BS but never discussed this company. ANyway this is a great concept. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: s_praharaj
Date Posted: 18/Sep/2006 at 11:12pm
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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. Its not only that you are a step ahead of ET, your article was much more detailed than the article in ET.
Congrats and keep it up,
Shashi Praharaj
------------- Shashi Praharaj |
Posted By: basant
Date Posted: 18/Sep/2006 at 11:28pm
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Thank you Sir. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 09/Nov/2006 at 9:42pm
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Basant jee
Yeh wala train (rather ship) abhi jyada hila nahin hain! I'm already aboard.
Have you checked their 2Q results, is everything in order?
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 09/Nov/2006 at 10:07pm
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For the Sept quarter sales increased by 5% (Y-O-Y) to Rs 754.7 crores while Net profit was up 59.69%(Y-O-Y) to Rs 12.6 crores
There was an expansion in operating margin by 12.34% to 31.69% Y-O-Y. I was surprised to see this margin excpansion but in the current year the company has been operating at this margin only.
Overall the sales growth seemed a bit muted but with such companies there are quarters where they do some work while the sales are booked in the next quarter therefore since the time period for making one ship could extend into more then a few quarters. Checking this company on quarterly results would be misleading at times.
Looks good and solid as a long term hold. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 10/Nov/2006 at 5:33pm
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Thanks for your 2Q result analysis. Is the margin expansion bcoz of other income (subsidy)?
Aaj kuchh engine laga hain yard mein!
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: BubbleVision
Date Posted: 10/Nov/2006 at 5:55pm
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Aaj kuchh engine laga hain yard mein!
----------------------------
What Kulman.... Anticipating a breakout like many a TAU...? ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: kulman
Date Posted: 10/Nov/2006 at 6:10pm
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BubbleVision:
Oh oh...old habits die hard, don't they?! Or as Buffet mentioned in that lecture (video link posted by you): The chains of habit are too light to be felt until they are too heavy to be broken.
On a serious note....It was basically intended as a pun to Basantjee's Train analogy. I liked that analogy so much that I'm taking that train journey ....which will be reported on soon .....The train number, by the way is 3822UP GAREEB RATH !
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: BubbleVision
Date Posted: 10/Nov/2006 at 6:16pm
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Thanks for the clarification....
I am eagerly waiting to hear about that Journey.... GAREEB RATH ! ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: basant
Date Posted: 10/Nov/2006 at 6:22pm
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When ever we calculate operating margin it is after excluding other income. So op margin means profit from operations only.
By the way we should have passengers for the trains http://www.theequitydesk.com/forum/forum_posts.asp?TID=216&PID=1145#1145 - http://www.theequitydesk.com/forum/forum_posts.asp?TID=151&PID=638#638 -
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Posted By: kulman
Date Posted: 10/Nov/2006 at 6:29pm
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Okay Basantjee
That sentence has a great message. Thanks a lot. I promise not to try talking prices henceforth. Only Values.....
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: BubbleVision
Date Posted: 10/Nov/2006 at 6:32pm
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Really a great statement for Value investors. I am sure that Buffet too views it the same way. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: basant
Date Posted: 10/Nov/2006 at 6:34pm
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It was not on you but for our train passengers who are rushing in with their "boria bistar" towards the unreserved compartment. See as Tv 18 moves up I have already started feeling uncomfortable because very soon it will discount all that is there on the table and then we would have to wait for the company to deliver for next year. In otherwords it is on track to become skimmed milk very soon. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 10/Nov/2006 at 6:40pm
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Sure...you are absolutely right.
Though you clarified that it was not on me...I'm trying to learn everyday. So it was my today's lesson number 17 !!!  ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: PrashantS
Date Posted: 10/Nov/2006 at 7:50pm
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tough call really...is to buy reasonable stocks at this level....it could go either way...i am happy that the the TV18 stock has moved up...but these levles are really tough unless fresh buyiing comes in from somewhere...everyone is playing the waiting game....i guess May be basantji could help us...as an invester i am not afraid...but the thign is buying at these levels seems very tough...and lot of guys are waiting for markets to correct  |
Posted By: nav_1996
Date Posted: 16/Nov/2006 at 10:36pm
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I just had a chance to look at the results. Its increase in operating profit is solely based on increase in Other Income, that explains increase in Operating Income. Also interset and depreciation has increased substantially.
Can some one comment on this? Also I don't find them very transparent as results are not published on their website and little information in public domain. Is ABG a better option in this area? |
Posted By: basant
Date Posted: 16/Nov/2006 at 11:02pm
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I do not think that operating margins include other income. Management at Bharti SHip seems better although there is little history and just because a company does not publish their results on their site we could not call them non-transparent! That would be a bit too harsh. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nav_1996
Date Posted: 16/Nov/2006 at 11:19pm
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Thanks for your update Basant. But that is what I could make out from thier Q2 result on BSE. Not sure about Op Margin formual but increse in Op Profit figure can be explained only by increase in Other Income. This is what I got from BSE
Q2 07 Q2 06 Net Sales 754.87 718.34 Other Income 95.47 5.49 Total Income 850.34 723.83 Expenditure -610.85 -584.62 Operating Profit 239.5 139.21 Pls let me know if I am getting it wrong. |
Posted By: India_Bull
Date Posted: 16/Nov/2006 at 2:14am
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Bharti or ABG is a question? Though Basantji you are in favour of Bharati which one will be a winner in the long run? ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: basant
Date Posted: 16/Nov/2006 at 9:15am
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I would think both. But then it becomes a matter of preference really. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 16/Nov/2006 at 9:38am
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Originally posted by nawendu
Thanks for your update Basant. But that is what I could make out from thier Q2 result on BSE. Not sure about Op Margin formual but increse in Op Profit figure can be explained only by increase in Other Income. This is what I got from BSE Q2 07 Q2 06 Net Sales 754.87 718.34 Other Income 95.47 5.49 Total Income 850.34 723.83 Expenditure -610.85 -584.62 Operating Profit 239.5 139.21 Pls let me know if I am getting it wrong. This seems really strange generally operating profit denotes the profit made from operations only and for a shipping company other income is certainly not operations.ANy way we would go by our general definition and I would rather ignore this because the business makes sense and that should drive the company.
Operating Profit is defined as Income from a company’s ordinary business activities which excludes interest and income tax expenses. Also known as Earnings before interest and, taxes (EBIT) source:investorsdictionary.com ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 29/Jan/2007 at 7:51am
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Bharati Shipyard Ltd has informed BSE that the Company has signed a contract with Clipper Group (Management) Ltd of Nassau, Bahamas, for construction and supply of 6 Bulk Carriers of 20,000 DWT each. The Contract value of these 6 vessels is US$ 130.50 million.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: kulman
Date Posted: 30/Jan/2007 at 11:03am
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Q3 results are out. On the face of it, seems on track.
Order Book Pending Execution as on December 31, 2006- Rs 2330 Crores.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: kulman
Date Posted: 28/May/2007 at 7:27am
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http://www.bseindia.com/qresann/news.asp?newsid=%7bA0DC938E-5F1D-4F23-B803-FFF3EC55E2F7%7d - Bharati Shipyard Ltd has informed BSE that Man Ferrostaal AG of Germany has ordered 2 Nos Latest Generation Large PSVs with the Company. The Contract value of each vessel is € 38 million totaling to € 76.00 million (i.e. App Rs 418 crore). These vessels are 105 m in length and are fitted with 2 sets of Voith cycloidal Propeller Units at the stern powered by electrical prime mover for diesel Electric Propulsion. Classed with Germanishcher Lloyd, the vessels will have free running speeds of 17 Knots. The Company is proud to announce the above order as it contains rare combination of a Large PSV with a higher speed. The Company shall also carry out the detailed engineering for the above vessels in its in-house design center. The vessel would have cargo Deck area of 1400 sq meter and will have capacity of 2500 tons Deck load. This is the first time that such a latest generation PSVs with Voith Cycloidal Propeller Units is being made in Asia. As on date, there are only 3 such vessels in operation worldwide. MAN Ferrostaal, is an industrial service provider forming part of the MAN group having presence in more than 60 countries. MAN Ferrostaal has an annual turnover of about € 1,379 million. With the above orders, our total order book stands at Rs 3,554 crores comprising of 41 vessels. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 28/May/2007 at 8:26am
| hey Manish, do you beleive shipyards can do well in absence of shipping companies doing well?????Why do you want to have a pick-axe theme when the main theme companies are available at such low P/E???? |
Posted By: Vivek Sukhani
Date Posted: 28/May/2007 at 8:31am
| A GE Shipping made an operating profit per share of Rs. 84/share.... shipping corporation will make more than 50 rupees per share as operating profit/share..... so do we need to get into shipyards.... they throw excellent dividends.......Q1 should be bombastic for all bulk carriers given the BDI and other shipping bulk indices are....and most importantly, promoters acquiring shares from open market( read, the announcement page on GE Shipping at BSE's website)..... do we need a bigger fundamental than that????? |
Posted By: kulman
Date Posted: 28/May/2007 at 11:36am
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Why do you want to have a pick-axe theme when the main theme companies are available at such low P/E????
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While I'm not an expert, looking at only P/E in isolation is not something I would advocate. For ship-building sector, in my opinion the growth @ 40~45% CAGR seems visible for the next 3~4 years. The order books are healthy. The sector is labour intensive where India scores over developed nations. Traditional leaders like Japan, Korea, China are over-booked till 2010-11. Besides these two shipyards are catering mainly to off-shore supply vessels where cyclicality of Baltic freight doesn't affect directly.
Look at this matrix (approx figures):
Growth ROE P/E
ABG Ship 62% 25% 11.3
Bharati Ship 102% 25% 9.5
Having said that, there are many risk factors also like subsidies etc. But my cost of acquisition is near or lower than the book value which is healthy margin of safety.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 28/May/2007 at 11:55am
Kulmanji: Ship building is cyclical but still has some competitive advantage unlike a ship or an aeroplane which anyone can start operating because air and sea is no one's property.
But for cyclicals the RoE would not matter. Tata STeel has an RoE of 40% plus now so that does not make it a good buy. These stocks become good buy when the RoE is down in the dumps because at that point the earnings are in a cloud and the only place where they can go up is to the top!
We should look at these companies from order books etc and by the look
of all the info you keep posting we are yet to get into that concern phase.
I do not track these companies and this opinion was on the basis of what I have read on TED and other sites.  ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 12:05pm
| Basant Sir, its not easy to get into shipping at the drop of a hat.... ships are very very expensive..... a Larsen can get into shipyard but it didnt made a foray into shipping, its shipyards which have no entry barriers......if you will have a big fleet size, thats a very big competitive entry barrier.....shipping is an industry where making switches from old and new ships is something a company must manage very well, and how many ships they park for charter and how much on time-basis is something that is a strategic decision.... |
Posted By: basant
Date Posted: 29/May/2007 at 12:19pm
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I do not understand all that because what I understand is no Investing Icon in this world has made big money by betting on shiping and airlines. Whether they missed something or I am seeing too much is something I am not competent to comment. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 12:24pm
| Basant Sir, how many shipping companies were listed worldwide before 1994......so how come they would have had made big money????Many investing legends made big money in rail road companies...... |
Posted By: basant
Date Posted: 29/May/2007 at 12:29pm
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As I said I am not competent to comment on this! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 12:36pm
| Anyways, I think I made a digression....lets better talk about shipyards |
Posted By: smartcat
Date Posted: 29/May/2007 at 1:27pm
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Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 2:05pm
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Risk is everywhere Sir......you think telecos are without risk-TRAI?????? you think retail is without risk-Very very Big political risk?????? or for that matter software-Rupee-doolar??????I have been hearing about leadership coming from software to help the benchmark for quite some time now..... if you perceive the risk in shipyards, the I think a better way of looking at that is to price that risk.... and then reconsider the desired return.....in my opinion the biggest risk a shipyard faces is that India has a very high level of engineering excellence now and so many companies may turn up in that space.....Larsen, Pawan Ruia Group are all deciding to make a foray here, someone like an Alfa which also excels in marine engineering has a big potential to shake up this space and the kind of impetus the parent company is showing, marine construction and engineering may be the space they may be looking for.....As i was bullish on shipping, I was trying to get into some process equipment companies and engine companies like Wartsila, but I realised the music lie in the main companies itself, so decided not to go ahead with Kirloskar Oil engines and wartsila.... Regards,
Vivek
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Posted By: smartcat
Date Posted: 29/May/2007 at 3:16pm
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Those kinds of risks (regulation/rules related) are palatable - but not getting money from Government type of risk. It's like investing in HPCL/BPCL because of oil bonds.
However, I agree that I should be giving more credit to the government than this. Without government's tax/other incentives, India's IT industry wouldn't be where it is right now.
I think the market is doing that already - by not assigning a not-so-great PE to shipyard companies.
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Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 4:21pm
| Visibility of earnings is something I dont go for.....so for me things like order backlog is a meaningless figure....I dont want my companies to have order back logs, I want them to throw very big profits......I dont want a HCC or NCC or a Punj, who may boast of big back logs but who throw such hopeless numbers..... |
Posted By: kulman
Date Posted: 11/Jun/2007 at 1:00am
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http://www.bseindia.com/qresann/news.asp?newsid=%7b49065C35-5465-4772-982C-2050CD101EC1%7d - Bharati Shipyard Ltd has informed BSE that Norwegian offshore shipping I Ltd of Norway has ordered 2 Nos. 150 tonnes bollard pull Anchor handling, tug and supply vessel with the Company. The Contract value of each vessel is US $ 32.5 million totaling to US $ 65.1 million (i.e. App. Rs 260 crores). These orders are the largest order for the AHTSVs being placed in India by the European customers. With the above orders, the Company's total order books stands at Rs 3,723.65 crores. It comprises of 41 vessels. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: CHINKI
Date Posted: 12/Jul/2007 at 9:26pm
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SHIP EQUIPMENT FIRMS HEAD TO INDIAN SHORES
Major marine equipment makers want to cash in on rapidly growing shipbuilding industry, which is expected to grow at 30% a year Mumbai: First it was the software companies. Then came auto parts makers. Now, it is the turn of ship equipment manufacturers. Major marine equipment makers, including MAN Diesel SE, Wartsila Corp. and Rolls-Royce Plc., are eyeing India, some with firm plans to set up factories that make a range of equipment used in ships. This new wave of businesses is an attempt to cash in on India’s rapidly growing shipbuilding industry, which is expected to grow, by some recent estimates, at 30% a year. Mumbai-based consultancy firm i-maritime, which estimated the industry growth figures, pegs India’s share of the global shipbuilding order book at around 15%, or $22 billion, by 2020, from the existing level of 0.4%, aided mainly by cost competitiveness and ample supply of skilled manpower. India’s shipbuilding order book swelled from Rs150 crore in 2002 to about Rs15,000 crore in 2006, according to Union shipping minister T.R. Baalu. “Indian shipyards currently import machinery and components. With the increase in shipbuilding volume, global manufacturers are expected to set up ancillary units locally,” predicts Ramesh Singhal, director at i-maritime. Rolls-Royce Marine, a top power systems maker for the marine sector, will open a unit at Navi Mumbai in October that will assemble a variety of electrical components used in ship-making, both for the local market and also for exports, said a company official who didn’t want to be named. Rolls-Royce Marine makes diesel and gas turbines, propulsion, automation and control and power electrical systems for the marine market. Germany’s MAN Diesel, one of the world’s top makers of large diesel ship engines, turbochargers and marine propellers, is looking for an Indian licensee to manufacture diesel engines for the firm here. MAN Diesel is the diesel engine division of Munich-based MAN AG, one of Europe’s leading makers of vehicles, engines and engineering equipment. “We have received offers from a couple of parties to set up the engine-making facility in India. A final decision will be taken in three-four months,” said a MAN Diesel executive who didn’t want to be named as he’s not authorized to speak to the media. “The technology will be ours and... somebody will make the engines here,” the executive said. It is unclear where the licensee will be located and what levels of investment are being envisioned. MAN Diesel has adopted the licensing route to manufacture engines in several parts of the globe. There is one wild card in the Indian shipbuilding scenario, however. These global ship equipment makers’ plans come at a time when there is a bit of uncertainty over whether a 30% subsidy, provided by the government to shipyards, will expire on 14 August as scheduled, or be extended. Existing and new shipbuilders, such as Larsen & Toubro Ltd, which has plans for a Rs2,000 crore shipyard, have been lobbying the finance ministry to not oppose an extension that the ministry of shipping would like to grant. Still, “it is strategically very important for equipment makers to set up shop in India”, says Dhananjay Datar, chief financial officer at Mumbai-based ABG Shipyard Ltd, the country’s largest private sector shipbuilder. “It is very natural. They will have no choice. It will lead to faster deliveries and better pricing.” Meanwhile, in the absence of locally available engines and other gears, Indian shipbuilders typically import them from factories located in Finland, Norway, Germany, Italy and the UK. But amid a global boom in shipbuilding, depending on overseas factories creates additional bottlenecks for Indian shipbuilders. “Shipbuilding is getting delayed because there is a long time gap in getting delivery of engines from abroad,” says T. Madhusudan, deputy general manager, operations at state-run Dredging Corp. of India, which is based in Visakhapatnam. His company, Madhusudan says, has had to wait for as many as 28 months to get an engine after it was ordered. At MAN Diesel’s factories, the delivery period for its engines is now 24 months. “We are booked till 2010,” said the executive. “We can cater to 2008 and 2009 requirements only in very special cases.” “Given the global boom in shipbuilding, the demand for engines is very high. The delivery period for four-stroke engines is high and for two-stroke engines, it is even longer,” says Banmali Agrawala, managing director of Wartsila India Ltd, the Indian unit of the Finnish equipment maker. Agrawala said his firm would look at manufacturing diesel engines in India, but added that volumes have to justify such an investment. “It’s purely a question of volumes,” said Agrawala. “We can’t set up that kind of a facility for small volumes.” Wartsila’s plan for a factory in India will also depend on the development of a large supplier base for sourcing key components that go into engine making. “The moment we consolidate volumes and the supplier base gets developed, we can look at manufacturing,” said Agrawala. Still, Wartsila India has set up a 100% export-oriented un-it at its existing Khopoli, Mah-arashtra, site for manufacture and export of marine reduction gear boxes, pumps, oil distribution boxes, high efficiency ship nozzles and has plans for further expansion, he said. Wartsila has five manufacturing works and three engine building licensees in China, which accounts for 45% of the shipbuilding market, according to the firm’s website. SOURCE: %20 - http://www.livemint.com/2007/07/12000934/Ship-equipment-firms-head-to-I.html ------------- TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO |
Posted By: kulman
Date Posted: 02/Aug/2007 at 4:06pm
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http://www.bseindia.com/qresann/news.asp?newsid=%7b68EBB82C-906A-41D7-B05A-A1F130CBCD14%7d - Bharati Shipyard Ltd has announced that the Company has bagged a repeat order from UP Offshore (BAHAMAS) Ltd, for design, construction and supply of two Platform Supply Vessels. The total contract value of this order is US$ 44.03 million (approx. Rs 177 crores). Mr. P C Kapoor, Managing Director, of the Company said: "We are extremely proud to announce that after becoming the first Indian shipbuilding Company to enter into South America, we have put another step forward as we have bagged this repeat order. The UP Offshore prestigious order reinforces BSLs premier ranking amongst the leading shipbuilding Company across the world in the offshore segment." A Platform Supply Vessel (PSV) is a ship specially designed to support offshore oil platforms. The primary function of these ships is to service the offshore oil platforms including supply of Drilling mud, pulverized cement, diesel fuel, potable and non-potable water and chemicals used in the drilling process. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 02/Aug/2007 at 4:17pm
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Kulmanji this one is doing very well for you along with Big brother L&T. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 02/Aug/2007 at 4:32pm
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Pata nahin Sir, kabhi kabhi lagta hain there's hole in the ship!!! Lekin phir kinara toh mil hi jaayega.....yeh aandhi toofan toh aate rahenge!!
 ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: smartcat
Date Posted: 02/Aug/2007 at 4:45pm
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Why do companies like GE Shipping/Shipping Corp of India grow at 10 - 15% per annum? Just look at their P/E's. The ship-building companies, in contrast, can't make enough ships to satisfy the demand.
If shipping companies like SCI are considered to be cyclical, what about companies that manufacture ships?
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Posted By: kulman
Date Posted: 02/Aug/2007 at 5:02pm
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If shipping companies like SCI are considered to be cyclical, what about companies that manufacture ships?
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As per my little knowledge, both are cyclical businesses.
We are in a situation where there is huge opportunity in shipbuilding sector primarily due to int'l maritime regulation of scrapping old ships (replacement demand), rising global trade and increased offshore E&P activities (high oil prices). The shipyards in korea & Japan are fully booked till next 3~4 years.
Regarding Shipping companies, Vivek bhai tracks them closely.
Afterall in a cyclical business if one gets in at the right time, huge money can be made! Remember Dhando-guy Pabrai's Frontline case?
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 02/Aug/2007 at 5:18pm
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These are cyclicals as well but just that the demand till 2010 is trmendously robust. Some specific type of ships (single hull tankers)will have to be taken off so we need ships that are permissable to replace them. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 02/Aug/2007 at 5:26pm
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'The Big Picture' look good then. Do Indian companies have the technology/expertise to build these double-hulled tankers? I thought Bharati/ABG builds only chota-mota boats.
From the website of Bharati Shipyard, it looks like they are mostly into manufacture of oil drilling ships, barges and rigs - a massively lucrative segment because of worldwide shortage of offshore drilling equipment.
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Posted By: kulman
Date Posted: 02/Aug/2007 at 5:52pm
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Bharati & ABG mainly make PSVs, AHTSVs etc.. And these are indeed chhota-mota ships compared to container carriers, VLCCs, LNG carriers etc where China/Korea/Japan have an edge. Jack-up rigs/Oil Platform is a new area where Bharati already has got an order.
L&T is planning to get into ship-building in a big way but subject to extension of govt subsidy.
Now, turning to our good old Ashok Kumar Ganguly....
Will Govt extend 30%subsidy?
Will Indian shipbuilders be able to scale-up to tap opportunuties?
Will any fall in Crude Oil prices impact demand negatively?
Will the existing orders get cancelled due to sub-prime fear?
Will rising Rupee be a big threat?
Will Yen carry Trade affect this boom in demand for ships?
Will the stock prices outperform the benchmark indices from here?
Yeh aur aise aur sawaalon ke jawaab jaan ne ke liye dekhte rahiye: HUM LOG!!
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: kulman
Date Posted: 02/Aug/2007 at 6:50pm
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While on this subject, for latest news about Punj Lyod's acquisition in this sector, please http://www.theequitydesk.com/forum/forum_posts.asp?TID=144&PID=32321#32321 - click here.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: kulman
Date Posted: 03/Aug/2007 at 5:45pm
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Read an interview of http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=295217 - PC Kapoor, MD here.
Q: Can we assume that you will be able to notch up about 100 crore in profits and about 500 crore in topline by the end of this year?
A: We are aiming for more, I cannot give you the exact figures but we are aiming for more than that. ---------------------------------------------
For FY'07 their sales was Rs. 360 Crores and Net Profit of Rs 73 Cr.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: ashishbarot
Date Posted: 04/Aug/2007 at 1:18pm
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According to current study and market condition, is this a right itme to get into the stock or better to wait for specific price range, for longterm view.
all ted members waiting for your views... ------------- You do not require an invitation to make profits. |
Posted By: kulman
Date Posted: 04/Aug/2007 at 2:31pm
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That's a million dollar question Ashish jee, for which I don't have an easy answer.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: manishdave
Date Posted: 14/Sep/2007 at 9:29am
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RIL to pump $2 bn into shipbuilding, dredging
2007-09-14 09:02:10 Source : Moneycontrol.com
Sourced From: Economic Times < ="http://202.87.40.52/promos/sponsor_news.js">Mumbai, 14 Sep, 2007: The Mukesh Ambani-owned http://www.moneycontrol.com/india/stockpricequote/refineries/reliance-industries/09/02/RI - Reliance Group is set to make a splash in shipbuilding and dredging with two separate companies. Sources said the petroleum-to-retail giant is expected to invest around $1 billion each in two companies and has begun talks with international majors for a strategic tie-up for the dredging business. This $2-billion http://news.moneycontrol.com/india/news/business/ril-to-pump2-bn-into-shipbuildingdredging/11/00/303062# - Link: http://news.moneycontrol.com/india/news/business/ril-to-pump2-bn-into-shipbuildingdredging/11/00/303062 - http://news.moneycontrol.com/india/news/business/ril-to-pump2-bn-into-shipbuildingdredging/11/00/303062
Kulmanjie,
What is your view on this news?
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Posted By: kulman
Date Posted: 14/Sep/2007 at 11:21am
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The sector is attracting lots of focus even from larger players. The other day ABG Shipyard took stake in Western India Shipyard for revival.
Pipavav (Punj Llyod has some stake in it) is filing for an IPO. Temba Shipyard (ICICI venture's PE fund has invested there) is next in line for IPO.
The opportunity is huge not only according to the media reports but heard so from an industry expert also.
I'm going to hold on at least till my 50th birthday because for me it's like Pabrai's Heads I win, tails I don't lose much!
On a lighter note, it's a kind of hedge against global warming....how? ....when there is flood water everywhere Ships might be the safest places!
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 15/Sep/2007 at 12:33pm
Yaha pe bhi masti! A strong source who is (un)reliable tells me that by your 50th birthday Reliance would have bought a majority stakes in the Indian Ocean and small minority stakes in Pacific and the Atlantic with options to convert the warrants into shares!
Why not buy Reliance then. Jahaj chalega kaha?  ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: manishdave
Date Posted: 17/Sep/2007 at 9:57am
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I think in longer run, Japanese and somewhat korean shipyard are running into risk when slowdown hits. China will wipe out those shipyards and Indian shipbuilding industry should thrive. If reliance gets into it than it is easy to predict three things.
1. opp is huge. 2. They will give run for money to chinese. 3. No need to worry abt. govt policy on shipbuiling industry.
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Posted By: basant
Date Posted: 17/Sep/2007 at 10:30am
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3. No need to worry abt. govt policy on shipbuiling industry.
____________________________________________________________
Excellent observation. reeliance has had a great habit of indicating sector potential by its mere entry. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: CHINKI
Date Posted: 17/Sep/2007 at 10:46am
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Basanthji, no doubt about Reliance assessing the potential of any sector and once they enter, making it big.
They get the policies changed/made suiting them. While in the Oil Industries, all the project reports of Oil Companies PSUs to expand or start anything fresh which were sent to Government for approval, were seen in RIL's office. They used to influence Govt. not to sanction these projects to PSUs and at the same time, they use to commision the same projects in their Patalaganga complex. Now only question is how much they would able to do it now and how that will affect the other competitors?? ------------- TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO |
Posted By: kulman
Date Posted: 17/Sep/2007 at 10:49am
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Yes, very good observation there by Manish Dave jee.
Are you invested in any of the global shipyards? Once upon a time Greece & Norway were the hubs for ship-building activities. But now they are marginal players.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: smartcat
Date Posted: 18/Sep/2007 at 12:34pm
| I'm quite surprised all the shipyards are booked for next 2 - 3 years. Why didn't the Koreans/Japanese/Europeans/Americans build up capacities? They must've been blind not see the growth powered by India/China economies. |
Posted By: CHINKI
Date Posted: 18/Sep/2007 at 12:55pm
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Cost of labour is more in all these countries while it is cheaper n China and India. Hence they are getting good no. of orders. ------------- TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO |
Posted By: vincent
Date Posted: 18/Sep/2007 at 5:17pm
------------------------------------------------------------------------------------------------- south korean shipbuilding companies have won orders worth 33.2 billion $ in the first half of 2007. Every week I read about a billion dollar order for some s.korean company or the other!!! ------------- Time is your friend on the road to wellbeing. |
Posted By: kulman
Date Posted: 30/Sep/2007 at 9:40am
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------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: kulman
Date Posted: 11/Oct/2007 at 2:35pm
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Bharati Shipyard Ltd has informed BSE that the http://www.bseindia.com/qresann/news.asp?newsid=%7b82ED4FEF-FF0F-4B48-98A1-D17DD70C59FA%7d - Shipping Corporation of India Ltd board has accorded approval for acquisition of four nos. Anchor Handling Tugs cum Supply Vessels from Bharati Shipyard Ltd .
The total price of each vessel is US$ 22.32 million totaling to US$ 89.28 million (approx. Rs 351 crores).
These vessels will be constructed by using Havyard Design which will be used for the first time for such vessels built in India. The design allows for achieving high bollard pull and fuel efficiency as against equivalent designs. Further, the design allows higher DWT and higher cargo carrying capacity compared to other 80 tons AHTSVs with similar dimensions. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 11/Oct/2007 at 3:28pm
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Oh! had it been an Ambani company the stock would have zoomed! Anil Dhirubhai Announcement group - Here the PE ratio is defined as the Price to Ego ratio! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 11/Oct/2007 at 4:45pm
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PE ratio is defined as the Price to Ego ratio
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 ha ha ha !!! Good one....------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: smartcat
Date Posted: 11/Oct/2007 at 5:07pm
Kulman sir, I suggest you rename your trading company to include either 'Reliance' or 'Ambani' in its name. Do you need suggestions? You can then sell it to a FII and retire to Cancun or the Bahamas.
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Posted By: kulman
Date Posted: 11/Oct/2007 at 5:37pm
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Here's an interesting http://www.dnaindia.com/report.asp?NewsID=1126798 - interview in Dna Money
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: kulman
Date Posted: 16/Oct/2007 at 12:04pm
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http://economictimes.indiatimes.com/Latest_News/Bharati_Shipyard_Apeejay_form_JV_for_shipbuilding/articleshow/2462440.cms - Bharati Shipyard Ltd and unlisted Apeejay Shipping Ltd agreed to form an equal joint venture to set up a modern shipbuilding yard on India's eastern coast. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: vincent
Date Posted: 13/Jan/2008 at 2:46pm
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Bharati shipyard plans to build new shipyard at Dabhol in Maharashtra. source : http://www.thehindubusinessline.com/2008/01/11/stories/2008011150300700.htm - B http://www.thehindubusinessline.com/2008/01/11/stories/2008011150300700.htm - L Mangalore yard will start production by end of 2008 but full potential would be reached only by 2010 plans for building a yard on the East coast in a 50:50 joint venture agreement with Apeejay Shipping As per recent interview of mr. kapoor: Order book is @ 4000 crores Swanhunter equipment (bought by bharati in '07) is being shipped and will arrive by april '08. I think there is a delay over here. ------------- Time is your friend on the road to wellbeing. |
Posted By: prashantmohta
Date Posted: 13/Jan/2008 at 6:07pm
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i saw on tv yesterday an order book --4600 cr.
prabhudas liladhar and bharat shah are very bullish on this counter.
management was quite confident on execution.
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Posted By: vincent
Date Posted: 13/Jan/2008 at 9:35am
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yes, the order book is 4600 cr. The delay I mentioned is about shipping the swanhunter equipment, as this was purchased in apr '07 and mgmt had then said they would ship it in 6 months.
------------- Time is your friend on the road to wellbeing. |
Posted By: kulman
Date Posted: 06/Feb/2008 at 11:34am
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Though such biz is not to be seen on http://www.theequitydesk.com/forum/forum_posts.asp?TID=418&KW=qsqt&PID=3449#3449 - QSQT basis , Q3 results were reasonable. Topline & bottomline grew over 50% YoY. Margins seem to be under pressure maybe due to product mix i.e. type of ships delivered during the quarter. Some dilution of equity due to FCCB conversion.
Pending Order book of over Rs. 3,700 Crores.
TTM EPS is approx Rs. 45 trading at PEx of 13. Uncertaintly over extension of subsidy remains a concern. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: smartcat
Date Posted: 06/Feb/2008 at 11:43am
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Any idea why Indian shipbuilding industry requires subsidies? Is it because of high taxes when compared to China or Korea? Perhaps building a shipyard in SEZ zone would help?
We seem to have all the raw materials required to build ships - steel and qualified people. What we need is a ship components industry - engines, propellers, bearings etc.
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Posted By: kulman
Date Posted: 07/Feb/2008 at 12:04pm
Those countries also provide subsidies so our industry is pressing for subsidy extension to be at level playing field.
On a side note, here are some links for more readings about the industry in general ...
http://www.marinelink.com/Story/Shipbuilding - http://www.marinelink.com/Story/Shipbuilding
http://www.imaritime.com - http://www.imaritime.com
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: kulman
Date Posted: 12/Feb/2008 at 9:05am
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Some delays...
http://www.dnaindia.com/report.asp?newsid=1150535 - Bharati Shipyard Mangalore unit delayed
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: chimak10
Date Posted: 18/Aug/2008 at 10:15am
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More Delays kulman sir.............yeah kiya hooan raha haineee.......
Bharati Ship’s rig delivery pushed to ’09 http://www.dnaindia.com/report.asp?newsid=1184229 - http://www.dnaindia.com/report.asp?newsid=1184229 |
Posted By: gyansr
Date Posted: 18/Aug/2008 at 11:52am
| This rig is supposed to be delivered from Dhabol. Dhabol is a new facility which is yet to be completely operational. In my opinion most of the companies don't meet their target of starting the new operation(Reliance is one of the very few exceptions which starts operation before time.) so, I would expect the delays to happen and any delivery from Dhabol should beconsidered for results only after actual first delivery has happened. |
Posted By: Musketeer
Date Posted: 02/Oct/2008 at 7:07pm
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This scrip has been hammered badly, now quotes below its book value.
Could it be just the uncertainty about the subsidy extension and the delay in execution? Or is it something else too? Members, pls share your thoughts. ------------- Be fearful when others are greedy. Be greedy when others are fearful. |
Posted By: kulman
Date Posted: 02/Oct/2008 at 7:24pm
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I guess market might have overdone with the hammering.....which could be due to: 1. Subsidy extension uncertainty 2. Delay in Managlore, Goa projects 3. Fear of slowdown as not a single order has been booked in recent past. 4. High Debt 5. Similar hammering of shipbuilding sector in Korea, Japan & China. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 02/Oct/2008 at 7:57pm
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Finally this is a cyclical business so if growth does not come along it could be dfifficult for this stock to get expensive and if they deliver then it would not remain cheap.
We should be sure of long term earnings Fy10+ and then take an invstment call.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 02/Oct/2008 at 9:20pm
Bhai mere, jahaz chalega tab shipyard mein jahaz banega.......
If shipping doesnt do well, simply forget shipyards would do well......
Thats why I have always maintained my stance that its better to be in shipping rather than be in shipyards. At least, shipping enjoyed a cream margin for 2 years and are now sitting well prepared to tackle industry slowdown.......
Thats why 550 ka GE abhi bhi 300+ hai, but 850+ ka Bharati 200- ho chuka hai. ABG has fared no better....... ------------- Jai Guru!!! |
Posted By: kulman
Date Posted: 02/Oct/2008 at 11:18am
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You were right & I was wrong. Lesson learnt. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: kulman
Date Posted: 06/Oct/2008 at 1:05pm
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Yeh lo....another blow to both shipowners & shipbuilders.... http://www.livemint.com/2008/10/05235226/Investments-of-20-bn-on-hold.html?h=E - Investments of $20 bn on hold as funds |
Posted By: Mohan
Date Posted: 06/Oct/2008 at 1:07pm
Posted By: Vivek Sukhani Date Posted: 06/Oct/2008 at 1:14pm
Posted By: kulman Date Posted: 06/Oct/2008 at 1:21pm
Posted By: Vivek Sukhani Date Posted: 06/Oct/2008 at 1:26pm
Posted By: smartcat Date Posted: 06/Oct/2008 at 1:37pm
Posted By: CHINKI Date Posted: 07/Oct/2008 at 1:25am
Posted By: kulman Date Posted: 07/Oct/2008 at 9:12am
Posted By: CHINKI Date Posted: 07/Oct/2008 at 9:23am
Posted By: kulman Date Posted: 07/Oct/2008 at 9:27am
Posted By: Vivek Sukhani Date Posted: 07/Oct/2008 at 10:16am
Posted By: Vivek Sukhani Date Posted: 07/Oct/2008 at 10:19am
Posted By: kulman Date Posted: 07/Oct/2008 at 10:44am
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