Bharati Shipyard – Slowing Down

Bharati Shipyard’s 4Q08 PAT was Rs327m (up 6% yoy) on revenue of Rs2.06bn (up 30% yoy). OPM stood at 27.3% compared to 33.1% in the previous-year corresponding period. This arose from higher subsidy being booked in the same quarter the previous year. Adjusted for this, the overall margin has improved.

The order book, at Rs46.35bn, has stagnated in the past six months, largely as capacities are running at optimum utilization. Management intends to procure further orders once additional progress on the Dabhol capex is made.

The Mangalore shipyard is scheduled to commence operations by Sep.-Oct.’08 (against 1Q09 earlier), and would be fully commissioned by Mar.’10. The yard at Dabhol has touched 25%
utilisation and is expected to reach its peak after FY10.