Earnings call transcript: Shipping Corporation Q2 2025 reports profit rise

Shipping Corporation of India (SCI) reported its second-quarter 2025 earnings, showcasing a rise in consolidated net profit to INR 189 crore and operating revenue of INR 1,339 crore. Despite a forex loss due to rupee depreciation, the company declared a 30% interim dividend. However, SCI's stock saw a decline of 5.27%, closing at INR 252.40, reflecting investor concerns amidst broader market volatility.

Key Takeaways

• Consolidated net profit rose to INR 189 crore.
• Operating revenue increased slightly to INR 1,339 crore.
• Stock price fell by 5.27% post-earnings announcement.
• Interim dividend of 30% declared.
• Forex loss of INR 67 crore due to rupee depreciation.

Company Performance

Shipping Corporation of India's Q2 2025 performance showed resilience with an increase in consolidated net profit and operating revenue. The company's strategic initiatives in fleet expansion and joint ventures are positioning it for future growth, despite current challenges in the liner segment.

Financial Highlights

• Revenue: INR 1,339 crore, slight increase from previous quarter.
• Standalone net profit: INR 176 crore.
• Consolidated net profit: INR 189 crore.
• EBITDA: INR 504 crore.
• Cash and liquid investments: INR 1,875 crore.
• Long-term debt: INR 2,526 crore.

Outlook & Guidance

SCI plans to incorporate a joint venture by December 2025 and acquire 59 vessels over the next five years. The company aims to increase revenue to 2-3 times its current levels and target an operating margin of 50%. Expected investment for the joint venture is INR 10,000-15,000 crore.

Executive Commentary

Captain B. K. Tyagi emphasized, "Our intention is to at least make two to three times the revenue, what SCI is currently doing." He also highlighted the government's efforts to create a conducive environment for shipbuilding in India.

Risks and Challenges

• Forex volatility impacting financial performance.
• Challenges in the liner segment affecting profitability.
• Global economic uncertainties influencing shipping demand.
• Potential delays in joint venture incorporation and fleet acquisition.
• Competition in the maritime sector.

Q&A

Analysts inquired about the joint venture structure, which was clarified as 50% SCI, 40% oil companies, and 10% Maritime Development Fund. Questions also focused on the vessel acquisition strategy and market-based pricing mechanisms.

The company remains optimistic about its growth trajectory, driven by strategic partnerships and fleet expansion plans, despite current market headwinds.

Full transcript - Shipping Corporation Of India Ltd (SCI) Q2 2026:

Vumika, Conference Operator, Antique Stockbroking Limited: Ladies and gentlemen, good day and welcome to the Shipping Corporation of India Q2 FY26 earnings conference call hosted by Antique Stockbroking Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vetharajan Shivasankaran. Thank you, and over to you, sir.

Vetharajan Shivasankaran, Moderator, Antique Stockbroking Limited: Thank you, Vumika. A very good afternoon, everyone. It's my absolute pleasure to welcome all the participants and the top management of Shipping Corporation of India to this reserves call. We have with us the top management of Shipping Corporation of India, led by Captain B. K. Tyagi, Chairman and Managing Director, Mr. Vikram Dingle, Director Technical and Offshore Services, holding additional charge as well of Director Finance, Admiral Jaswinder Singh, Director Liner and Passenger Services, holding additional charge of Director Bulk Carrier and Tankers, Captain Somraj, Director Personnel and Administration, Mrs. Charusheela Gorapali, CFO, and Captain Daniel Chandran, General Manager, Bulk Carriers and Tankers. I'd like to hand over the floor to Captain B. K. Tyagi for initial remarks. The floor is yours, sir.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Thank you, Mr. Vetharajan. Thank you, Vumika. Good afternoon, ladies and gentlemen. A very warm welcome to all our investors, analysts, and stakeholders who have joined us today for the Shipping Corporation of India's earning call to discuss our financial performance for the second quarter of FY 2025-2026. Let me begin by thanking you for your continued trust and partnership as we navigate a dynamic global shipping environment and continue to strengthen SCI's leadership in India's maritime sector. I'm pleased to share that we have delivered a steady and resilient performance this quarter, despite global market volatility and mixed freight trends across segments. Our standalone net profit stood at INR 176 crore, while the consolidated net profit was INR 189 crore. Last quarter, we had posted standalone profit of INR 343 crore and consolidated profit of INR 354 crore.

The last quarter's profit was higher, mainly due to a non-recurring other income component of INR 79 crore, which was basically interest on an income tax refund we received. This quarter, we also took a hit on foreign currency loans due to depreciation of rupee against the dollar. The operating revenue came in at INR 1,339 crore, vis-à-vis INR 1,315 crore in the last quarter. EBITDA for the quarter was INR 504 crore. We continue to maintain a strong balance sheet with a net worth of INR 7,963 crore, cash and liquid investment of INR 1,875 crore, and long-term debt of INR 2,526 crore. This translates to a debt-equity ratio of 0.32 and a DSCR of 4.24, underscoring our sound financial position and liquidity. The board has also declared an interim dividend of 30%, reflecting our commitment to delivering consistent value to our shareholders.

Coming to operation, our owned fleet now stands at 58 vessels, and we manage an additional 40 vessels across various categories for government organization, with an average age of 15.5 years. This quarter, we were proud to induct two very large gas carriers, VLGC Sahyadri and VLGC Shivalik. These vessels were built by Hyundai Heavy Industries, each has a capacity of around 82,000 cubic meters, and their induction significantly strengthened our position in the LPG transportation segment. Both vessels will be deployed on the Persian Gulf-India route, enhancing our energy transportation capacity and supporting India's growing energy demand. A key highlight this quarter was the signing of an MOU with Bharat Petroleum, Hindustan Petroleum, and Indian Oil Corporation. Under this collaboration, we aim to jointly acquire, own, and operate vessels for transporting petroleum, petrochemical, and other hydrocarbon cargoes.

This initiative supports the vision of Aatmanirbhar Bharat, strengthens India's shipping capacity, and reinforces its role as a critical partner in enhancing national energy security. Looking ahead, we remain optimistic yet prudent. Now, I would request my operating divisional directors to kindly brief about the market segments. First, I'll request Admiral Jaswinder Singh to give the brief about the bulk tankers and then the liner segments. Over to Jaswinder ji.

Admiral Jaswinder Singh, Director Liner and Bulk Carrier/Tankers, Shipping Corporation of India: Good evening, ladies and gentlemen. At the outset, I would welcome all SCI's investors and stakeholders for today's investor phone call. I'm Admiral Jaswinder Singh, Director Liner, and presently also holding the charge of Director Bulk Carrier and Tankers. Since we are having this phone call after a long time, I would give you a brief background about the liner segment. Last to last financial year, the liner segment was in loss with two container ships. In the last financial year, we have had a complete turnaround of this segment with a profit of INR 166 crore. This was primarily because of SCI in-chartering three container ships, deployment of a 9,000 TEU ship, SCI Delhi in India-Europe sector, optimum utilization of our container ships, and digital automation of certain commercial and day-to-day activities.

Today, because of the prevailing geopolitical environment, though the container market is not very favorable, SCI liner segment is doing well. Though the result only shows a profit of INR 11 crore, this is primarily because of certain ECL provisions of few customers, which we are very confident we will be able to get this money, and once we receive it, it would be reversed in the forthcoming quarters. I am confident that the liner segment would grow as per SCI's business plan and post much better results in the forthcoming quarters. I will now move to the tanker segment. Our tanker segment remains the cornerstone of SCI's operations, with 31 tankers, including the Chairman just mentioned, the two recently inducted very large gas carriers, that is Sahyadri and Shivalik. Historically, you people are aware that the winter months are always more favorable for the tanker market.

We, therefore, have had proactively scheduled repairs, that is dry docking of a few of our tankers in the Q2 of this financial year, so that these ships would be available for trade in the winter months. As anticipated, the VLCC Worldscale has more than doubled from an average of WS 48.76 in the beginning of this quarter to more than WS 100 presently. Let me assure all the stakeholders that with the increased tonnage and a strategy to ensure optimum availability of tankers at an opportune time, the performance of the tanker segment would be much better in the current ongoing quarter. I will now move to the bulk carriers. The bulk market has shown an improvement with the BDI increasing from around 1,500 in the Q1 of this financial year to an average of 1,800 in Q2 of this financial year.

This has turned around the results of a bulk carrier segment from a loss of INR 48 crore in the Q1 of this financial year to a profit of INR 2 crore in Q2. Presently, the BDI is around 2,000, that's around 1,975, slightly less than 2,000, and if it continues at this level, then the results of the bulk segment would further improve in the ongoing quarter. Before I conclude, I want to assure all the stakeholders that SCI would induct the tonnage as per our business plan, which was recently released by the Honorable Prime Minister, Sri Narendra Modi, during the recently concluded India Maritime Week. This would only ensure that SCI's growth and better results are posted in the forthcoming years. Thank you. Jaihind.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Thank you, Admiral Sahib. Now, I'll request Director Technical and Offshore to give the brief.

Vumika, Conference Operator, Antique Stockbroking Limited: I'm sorry to interrupt you, sir.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Yeah, please, Vumika, tell me.

Your voice was breaking, sir. You can continue now.

Vumika, Conference Operator, Antique Stockbroking Limited: Sir, your voice is breaking. I'll disconnect and connect you back. Ladies and gentlemen, please wait for a moment while I join back the management. Ladies and gentlemen, thank you for waiting patiently. We have the management line back with us. Please go ahead, sir.

Vetharajan Shivasankaran, Moderator, Antique Stockbroking Limited: Thank you, Vikram. I'll start off once again because there was some interruption. My name is Vikram Dingle. I'm the Director Technical and Offshore Services. I would like to brief you about the Technical and Offshore Services Division, which comprises essentially of two verticals: the Offshore Services Segment and the Technical Services Segment. The Offshore Services Segment is responsible for operation and maintenance of the owned offshore support vessels as well as the managed vessels. The Technical Services Division has the comprehensive technical expertise in vessel acquisition, be these new-building vessels or be these second-hand vessels. SCI presently has 10 offshore support vessels, of which seven vessels are currently engaged under long-term charters with clients like ONGC, the Indian Navy, and DRDO, while the remaining vessels are gainfully employed in the spot market.

Informatively, SCI recently bagged contracts essentially where the vessels were repriced at almost 50% higher charter than was earlier prevailing. These are on charter for a period of three years. These vessels are also recently upgraded as per the ONGC requirements. The offshore segment fundamentals remain positive, underpinned by firm demand for fuel-efficient and technologically advanced vessels. With the existing long-term contracts, potential renewals under discussion, and selective participation in strategic tenders, SCI is expected to maintain a steady revenue base and improve utilization in the coming quarters.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Thank you. Thank you, Vikram ji. Ladies and gentlemen, we have uploaded PPT on the last Friday, which has all basic information. I'm sure all the investors have gone through that. Now, we can begin with the question and answer session, Vumika ji.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Arpand, an individual investor. Please go ahead.

Yeah, thank you. Can you hear me?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Yeah, Arpand ji, please go ahead.

Yeah, sir. Thank you, sir. Thanks for your summary and the development. Only I have one question that in the maritime rigs where Mr. Modi also announced about the Bharat shipping container and MOU with our PSUs, it's with the green tug, right? How are we moving on that in terms of what my understanding that it will be rotated to SCI, and we were in the process of incorporating the new entity to take this project further. If you can put some light on the development on that.

Yeah. See, Honorable PM has announced the SCI business plan during India Maritime Week. It has got two, three components. Number one, SCI owned a business roadmap up to 2047. We appointed one of the consultants, and consultants have assisted us. Now we have got an overall business plan which spans up to 2047. It's a long term, and this has got a very visionary plan, and this is in line with the Viksit Bharat 2047. That is one. Second is MOPNG oil companies have done the demand aggregation. Total 59 vessels are identified by them as an end user. Further, in the month of September, SCI has signed one MOU with IOC, BPCL, HPCL. Now we are in the process of incorporating one JV, specific JV, where we all will be the shareholders. SCI will be the leading shareholder.

This vessel acquisition will be done by this particular JV. The idea is that these oil companies which need to move the cargo, they will give the firm commitment to the JV, and all vessels will be engaged there. This is overall basically plan and the points which you have asked.

Yeah, thank you.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you. The next question comes from the line of Vikram Suryavanshi from Philip Capital. Please go ahead.

Yeah, good evening, sir. The first commitment which will come to JV, will this be like a contract, like a very long term in nature, like five years, seven years, or will it be like a contract will be renewed every year? I guess pricing will be driven by what is available at the international market at that point in time, or how that structure will work?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: See, this JV intention is to have the long-term commitment from oil companies to the JV vessels. This freight or the charter would be linked with the market indexes. It will be a very fair pricing mechanism so that there is no issue from any side of the equation. Answering specific to your question, this will be the long-term commitment by the oil companies to the JV.

There will be one base rate plus whatever incremental index rates will happen, it will be shared.

Correct, correct. Something like this. There are different indexes for the different segments. Whatever the prevailing index for, say, for the crude oil, for the bulk, or for the gas also. Market indexes and plus minus some formula will be designed.

Do we need to buy these new vessels built in India, or can we buy second-hand vessels in the international market?

See, there will be two approaches for this. This is what we at SCI are also doing. The new vessel ordering and then delivery would be after three or four years. We want to basically increase our fleet number. The easiest way is to buy some second-hand vessels from the market. This is what exactly we have done by purchasing two VLGCs. Similar approach would be used in the JV also.

Okay. Last question from my side, we are a little more active in coastal shipping side also. How are the opportunities emerging or any plan from that side also on coastal shipping side?

See, coastal shipping, SCI is very active. As far as the crude oil moving on the coastal, India, sorry, SCI has got a monopoly there. We move a lot of bulk cargo, coal cargo on the East Coast of India. Further on West Coast of India, these are two small container vessels. They are busy 24 by 7 moving containers from North India towards South India and back. We are very much active on the coastal movement of cargo.

Okay. Just to complete the question, I just got another point. That 59 vessel what we're talking about JV with HP, IOCL, BP, will this be exclusively with SCI and all 59 vessels will be through JV, or HP, BP, IOCL can have another JV with another shipping company also?

See, as far as we are aware, this 59 vessel demand aggregation is done by the MOPNG companies. At this stage, intention is these all vessels should be procured by this JV, and the operation will be with SCI.

Understood, sir. Thank you. It was very helpful, sir.

Thank you, ji.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you. The next question comes from the line of Venkatesh Subramaniam from Logic Tree Consultants. Please go ahead.

Sir, good evening. Congratulations on a very nice quarter. We can see that there's a lot of dynamism coming to this company, sir. Two questions, sir. One is, based on what you're projecting and if this 59 vessels comes into the fleet, what kind of vision or what kind of revenue target do you have in mind for the foreseeable future, say, next three to five years? What kind of operating margins are you looking at on this one? That's my first question.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: See, as far as these 59 vessels are concerned and the revenue, our intention is to at least make two to three times the revenue, what SCI is currently doing. Operating margins, maybe CFO can throw some light on this.

Charusheela Gorapali, CFO, Shipping Corporation of India: We will be operating. We are planning to have it at operating margin of 50%.

50%, sir? 50%, ma'am?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Yes, yes, around 50%.

Okay. Which 50% is okay. Yeah, that's a great improvement because I think currently our operating margins covers around on a top line of INR 5,600 crore last year, we did about an operating profit of INR 1,700 crore. Our target is going to be to aim 50%, 5-0.

Yes, see, idea is to have the challenges and the good target. Then only we can make the bets.

Nice, sir. Great. Second question is, when you have, you said we have cash and liquid investments on the books to the tune of INR 1,800 crore, and we also have some long-term debt on the books. That long-term debt is basically for buying the vessels, sir? What is the purpose of the long-term debt? Because you have cash on one side and you have debt on the other side?

Again, I'll request my CFO to.

Charusheela Gorapali, CFO, Shipping Corporation of India: Yes. We are holding on this cash because we have this acquisition plan. The acquisition plan, whenever we decide any vessel and whenever the deal is favorable, we want to. That cash should be available with us, and that is the whole purpose of holding cash.

Holding cash, okay. Ma'am, since we have some long-term debt to fund this plan for expansion and acquisition of 59 vessels along part of the JV, SCI would need to invest some equity capital into this new joint venture, and we would need some funds over the next few years, right? Any idea what kind of fundraising, what kind of funds you would need to get this into reality?

Yeah. See, presently we have cash. As we go ahead with the JV and as we cite the requirement, accordingly, it will be dealt with.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: I'll add something more here to what our CFO said. This JV, what is being incorporated, SCI will have 50% shareholding there. 40% will be IOC, BPCL, HPCL, and 10% is expected from MDF, Maritime Development Fund.

Okay. Right.

This will ease up the situation for SCI as far as arranging the funds.

Okay. In that joint venture, basically, we will put in 50% of the money, and everybody else will participate as per their shareholding, basically. Yeah?

Correct. Out of 50% also, and as a practice in shipping, we borrow 70%, and 30% is our own money.

Right. Right. Okay. Another question is, you talked about market index, market linked in terms of pricing the vessels and prices for all the three customers. Would that be since the global price movements today are driven by a variety of index, Baltic Dry Index, etc., and especially in US dollar terms, would you also consider that we also develop internally a national maritime index because our pricing is going to be also in Indian rupee, and we are going to deal a lot with Arabian nations and Russia?

See, this is definitely a good dream to have our own index. Shipping is an international market, and all transactions are of international nature, basically. Today, if you want to fix any VLCC, there is a specific trade index, and every day on the working date it is published. That is a good indicator of how the market is going up and down. That becomes the obvious benchmark for any party in shipping. That would be the ideal, and it will be transparent, and it will be definitely at arm's length.

Okay. Okay, sir. Great. So the two VLGCs which you have inducted into the fleet, what is the contribution of these two VLGCs to our revenue profile? How much can they on an average year, what can they bring in in terms of revenues?

See, every year, charter hire value of one of the VLGC would be $12-15 million.

Okay.

Just to share with all investors, this one of the VLGCs is already given to IOC on five-year long-term charter.

Okay. Already done. Super. Okay.

Yes.

Good. Thank you. I will join the queue, sir. I'll come back. Thank you.

Thank you.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you. The next question comes from the line of Digand Harya from GreenEdge Wealth. Please go ahead.

Yeah. Yeah, hi. Thank you for the opportunity. The question is always again, let's see if we are going to ship. Maybe it will require.

Mr. Digand, I'm sorry to interrupt you, but your voice is breaking. Can you please go to a better network area?

Yeah, I'm trying now. Is it better now?

Yes, it's better.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Yeah, we can hear you loud and clear. Please go ahead.

Okay. Okay, sir. So my question is, sir, for the JV, if we are going to buy 59 new ships over, say, five years, it will need an amount of, say, INR 10,000-15,000 crore. Is that right? Or do you have an estimate for that amount?

You are right. It will be in the same range because we have got a variety of ships, right from offshore vessels up to VLGC and VLCC also. The total investment CapEx will be in that range.

Okay, sir. Sir, and then when we say that our revenue should be two or three times because, see, our current revenue comes out of our 52 own ships, and we have some managed ships also. So if with so many ships, if we do INR 5,500 crore revenue now, how with just 59 new ships, we can do three times our revenue? Are we going to buy different kind of larger ships? Any details you can give on that?

See, two, three points I'll give in this support. Number one, these 40 vessels that we are managing, they do not add to the revenue of SCI. We get only some management fees, cost-plus basis. Basically, revenue is only from our own 58 vessels. Further, current fleet is 15 years plus old. There is definitely some disadvantage when we charter out. We do not get the best if we compare to the new vessel or the vessel which is less than five years or ten years. Once we get these 59 odd vessels, if these are new, definitely better charter, higher and better revenue will be given.

Okay. Okay. Okay, sir. Sir, and I have one question which is slightly, let's say, in our past. I'm talking about the last decade, Shipping Corporation of India, we ended up buying ships at the peak of the cycle, and then we had a lot of debt. After that, seven, eight years really did not go well. This time, when we buy these new ships, will we have more of an assured revenue and we do not end up with the same situation which happened in the last decade? Any thinking on that?

Your observation is very correct. This time, how we are covering this risk is by forming JV and by having the long-term commitment from the cargo owners like IOC, BPCL, HPCL, and similar exercise we are attempting with dry bulk cargo. Can you hear me?

Yes, sir. I can.

Yes, sir. Yeah. Similar exercise we are attempting with the dry bulk cargo owners also. By having the long-term commitment, vessel utilization and at the market level, these two things will be ensured.

Okay. Okay. Okay, sir. That's good to know. Sir, in our present fleet, which is at 58 ships that we have, what % of the contracts are probably at lower rates and that can get revised later on at a higher rate? Or any such data if you can give us?

See, offshore sector, we have got 10 vessels, and most of the contracts are already revised. As far as the tankers and bulk areas, we have a short-term contract for the void charter, and we are taking advantage of the current prevailing market, especially in tankers. Whenever we feel comfortable, we are locking our units for the longer period like we did for VLGC. Recently, we have done one VLCC also with the IOCL again.

Okay. Okay. Okay, sir. Which means the current operations are quite efficient, actually, right? That we are already.

Definitely efficient, and we would like to improve further.

Okay. Okay, sir. Okay, sir. These managed ships, what revenue do they give us? We have around 45 fleets or 45 ships or something which we just manage. What would be the number of the total revenue that all these 45 ships give us?

Just give one moment, please.

Yes, sir.

Revenue.

Charusheela Gorapali, CFO, Shipping Corporation of India: Last financial year, it was around INR 84 crore.

Okay. Perfect.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Service which we provide as a government company to various government departments.

Got it, sir. Got it. No, no. Perfect, sir. Sir, and lastly, on this JV, we said that our operating margins we are targeting at 50%. So this margin would be better than our current margin profile because we may be buying ships which are five years or eight years old, so we may get better rates. Is that the assumption there?

Yes. Yes. You are perfectly right there. Better, more efficient, lesser age, and the firm commitment of the cargo back to back. This all should ensure this.

Okay. Okay. Perfect. Thank you so much for answering the questions.

Thank you. Thank you.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you. The next question comes from the line of Ajit Sanjay Derda, an investor. Please go ahead.

Hello. Am I audible, sir?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Yes. Please go ahead.

Yes. Sir, thanks for the opportunity. Sir, I have two, three questions. My first question is, sir, as we have decided to buy 59 vessels, what is the expected IRR for these vessels under our proposed JV with BPCL, HPCL, and IOC? Is it reasonable to assume, sir, IRR of around 11% or more after depreciation and interest?

See, let me just correct. At this stage, MOPNG has done the demand aggregation for 59 vessels. As the JV gets incorporated, the JV will decide which vessel to be taken first. This will be definitely tested with the IRR. This IRR, as a board of SCI or as a board of JV, will only approve once it is sensible, definitely more than 10-11%. These 49 vessels will be spread over time, maybe next five years. Which vessel to be purchased first, test would be definitely in terms of IRR.

Okay. Sir, as you said that this contract will be based on the index, I just want to confirm whether there will be one base rate plus some index, plus or minus some index. Will that be such a thing, or will it be just index? I mean, just what thing?

See, you are absolutely right. Let me give you a small example. Today, VLCC, say, WS, world scale is 100. Whenever the tanker loads at a particular load and the BL date is the date of BL date, whatever the world scale for that particular segment, that and plus minus some formula which will be agreed between the JV and, on the other hand, the cargo movers, in this case, IOC, BPCL, HPCL. It will be a very fair and transparent way of giving and taking the money.

Okay. Sir, one more thing. In management fees, you said we have top line of INR 84 crore in last year. What is the margin in that business, sir?

This is different. For Ministry of Earth Science, for Andaman and Nicobar, this percentage is different. It is ranging from 5-6% to up to 10-12%.

84 crore में फिर भी कितना profit है, sir, अभी?

ये सारा का सारा management fees की जो है, ये profit ही SCI का. This is cost-plus.

Okay. No expenses, right?

No. We do expenses, but the expense plus something we get out of this.

Okay, sir. Thank you so much. All the best for future investors. Thank you so much.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you. The next question comes from the line of Aksher Ajmera from Nirzar Securities LLP. Please go ahead.

Hello.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Hi, ji. Please go ahead.

Yes. Thank you so much. Sir, ये जो हमने JV का अभी पूरा discuss किया है, तो इसमें ये जो contract होते हैं, ये COA basis पे होंगे या आप जैसे long-term बता रहे हैं, तो long-term सिर्फ demand commitment हो रहा है हमारे लिए और बाकी सब spot basis पे होंगे या ये COA basis पे किस तरीके से होंगे, sir, ये contract?

See, इसमें कुछ भी combination हो सकता है. एक तो COA जो आपने जिक्र करा, ये भी एक जो काफी active formula shipping में है, especially tanker market में.

Right.

दूसरा हो सकता है जो है oil companies के साथ में JV और oil companies के बीच में 10 साल, 15 साल का time charter कर दिया जाए।

Huh. Huh.

और कुछ combination ऐसे भी हो सकता है spot के लिए भी रखा जाए।

तो 10-15 साल के लिए हम हो सकता है कि एक base rate तो fix कर ही दें कि इतना तो हमको मिलेगा ही मिलेगा, जो हमारे लिए एक assured return के form में हो जाए. हम लोग उस तरीके से, मतलब मैं सोच रहा था कि क्या ऐसा हो सकता है.

See, as a JV, major shareholder, I would love to do that to ensure कि जो है break even से नीचे ना जाए, maximum जो है earning some more हमारे shareholder को मिले. पर ये जो है, this will be matter of discussion and decision with the oil companies. This I can assure you, it will be a transparent system. The way market is behaving in the same way, SCI in the JV will be earning.

Going forward, sir, जैसे अभी हमने VLGC, आपने बताया, Indian Oil को five साल के लिए दिया है, तो वैसे इसमें भी कुछ freight वगैरह कोई base rate fix है हमारा और आगे चलके वो five से 10 साल, 12 साल के लिए भी हम सोच सकते हैं?

नहीं. इसमें पांच साल के लिए firm है period और इसमें per day charter है, already fix हो चुका है. ये पांच साल fix नहीं है.

तो इसका generally, sir, क्या IRR आता होगा?

अब इसका जो है, मैं आपको जो है idea बता देता हूं. इस date में charter hire per day लगभग $38,000-$40,000 per day का है.

Right. और पूरे 360 दिन का हमको मिल जाता है?

Huh. 360, 365, जो भी यदि किसी वजह से maintenance के लिए गया, dry dock के लिए गया, PMS है, जो owners के account में definitely वो इसमें deduct होगा.

Huh. और इसमें सामने खर्चा कितना आता है, sir, हमारा? INR 40,000 revenue आ गया.

इसमें जो है, लगभग आप 15 साल पुराना जहाज लें तो लगभग $27,000-$28,000 का standing इसकी cost होती है. तो बाकी इसमें saving है.

This will also include interest and depreciation cost?

Yes. Yes.

Okay. Okay. Fair enough, sir. Sir, ये हमने अभी जैसे CFO madam ने भी बताया था कि हमारा जो ये JV है, हमारा target है कि हमारा जो existing top line है, उससे हम दुगुना, तिगुना काम करें उसमें और 50% के आसपास operating margin का endeavor करें. तो is it right, sir? ये सही चीज सुनी थी मैंने?

इसकी संभावना बहुत प्रबल है और सारी की सारी team उसी direction में काम कर रही है. JV formation, ये एक कदम उसी direction में है.

Okay. Okay. बहुत ही अच्छे. तो ये अपना VLGC segment में 12,000 का.

Vumika, Conference Operator, Antique Stockbroking Limited: I'm sorry to interrupt you, Mr. Aksher, but please.

Okay. I will get back into it. Yes. Thank you.

Yes. Thank you very much. The next question comes from the line of Anushri from Alpha Invesco. Please go ahead.

Hello. Am I audible?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Yes, ma'am. Go ahead, please.

Hi. I have one or two questions, sir. One is कि हमने like we have signed an MOU with oil PSUs, so can we expect similar MOUs with ONGCs or gas companies for offshore logistics and transportation of natural gas like one we have already signed, I guess, VLGC, but is there also a plan to form a JV like we have formed with the oil companies?

See, this MOU which I have discussed, this is with the oil companies. This will cover oil and gas both. Further, our ministry is discussing with MOPNG and efforts are on to replicate the similar business module for the other segment, offshore and dry also.

Okay. Sir, what is the expected timeline for operationalizing the JV, including contract award, vessel acquisition, deployment? Any timeline we have for that?

Timeline tentative for JV to be in place is December 2025. Parallelly, this tendering process is happening. Hopefully, maybe December, we will be floating tender also for at least a few vessels under JV.

Okay. Sir, overall, since there is a fast track also from the top orders, is there any plan, including the ministerial approvals, as they become more efficient, faster, transparent with all this shipping initiative going on? Like, is it going to be better this time around or is it going to be slow-paced?

See, this time, there is a completely different environment. There is a trust. There is a commitment right from the topmost office of this country. Our ministry is working 24 by 7. This time, building the ships in India include.

Vumika, Conference Operator, Antique Stockbroking Limited: Ladies and gentlemen, the line from the management has been disconnected. Please wait for a moment while we join them back. Ladies and gentlemen, thank you for waiting patiently. We have the management connected with us. Please go ahead, sir.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Yeah. I was giving update that how serious is the commitment from Government of India and ministry. You can see in the last union budget, there were declarations about the maritime industry. Our parliament has already cleared five maritime bills. Cabinet has approved nearly INR 70,000 crore equivalent various schemes. This also is the serious commitment of our ministry and the Government of India. Now there is a completely different environment. Government is trying to put the suitable policies in place, create the environment, ecosystem to build the ships in India to increase the Indian tonnage. As you all are aware, that today, every year, $76 billion-$80 billion goes out of country in terms of the freight. Which prime minister has mentioned repeatedly, this is equivalent to Indian annual budget also, defense budget.

Overall attempt is to reduce this dependency on the foreign lines and basically steps toward Andaman and Nicobar. Coming back to your specific question and the specific reply, this time, Government of India, our ministry is very, very committed. If this has to be done tomorrow, the direction is do it today. Thank you.

Thank you. That's it from me. Thank you.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you. The next question comes from the line of Rakesh Roy from Motilal Oswal AMC. Please go ahead.

Hi, sir. My first question regarding, sir, for Q2, how your other expenses increased, sir. How much is the forex loss of Q2, sir? Can you give me the breakup of your other expenses?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Yes. Charuji?

Yes. The other expenses, basically the forex loss of INR 670,000,000 because of our rupee depreciation by INR 3. So that was the major component.

7 crore is the forex loss?

Yeah.

Okay. This is the major. Any other thing, any other second, anything important? Generally, you have INR 6-10 crore other expenses, but this time it is INR 1.6 crore.

Yeah. That was basically because of this. Then some loss we moved because of the ECL provision which we made towards the data. That was around INR 30 crore.

Okay. Sir, okay. My next question, sir, as you mentioned कि you are looking to 2-3 times of revenue from JV. This is apart from the current revenue or this is हम लोग INR 10,000 crore simply only for JV देख रहे हैं कि this one?

No. Overall, we are talking.

Overall. Is it two to three times in next how many years, sir? Three years, 2028, 2029? Any idea, sir?

Next five years horizon.

Okay. Next five years, we will touch two to three times. Operating margin of 50%.

That's the target.

Okay. And sir, next question, sir, regarding your freight expansion. कुछ दिन पहले just हमारे shipping minister ने कहा कि we are going to float another four tankers in October. Two तो हमने ले लिए already. We are going to float new tankers. So any update on this one?

Ji, इसमें under JV, we are in process to prepare the tender terms and technical specifications. Some vessels, this is a particular category which we are discussing with the other partners of the proposed JV. Hopefully, by next month, we will float the tender.

Okay. Any idea how many tender you will float in FY 2026, 2027?

Oh, this will be a n number of tenders.

Any idea to add any in SCI books, SCI no JV separately?

Yes. Parallelly, we will have some actions as SCI alone also. We are also, in fact, today, if you visit our website, we are in the process of purchasing some second-hand vessels also. Tenders are live.

Vessels, can you give me idea?

See, currently, BLGC tender is on the website.

Okay. Your website is not updated because I just checked, it's not showing anything. Can you give me the idea for this one, how much for SCI tendering for 2026, 2027? Only for SCI?

26, 27 are targets. Anyway, this has to go to the board. Roughly, it can be any figure somewhere 10-12 vessels.

Oh, so 10-12 vessels for FY 2026-2027?

Yes. Yes.

This already we had added two vessels this year. Any idea to add more for FY 2026? Any idea?

Yes. Current FY, we are still hopeful and we are very bullish to add a few more second-hand vessels to the fleet.

Okay. Sir, last question, sir.

I'm sorry to interrupt you, Mr. Rakesh, but please rejoin the queue for further questions.

Yeah. Yeah. Sure. Thank you.

Thank you very much. The next question comes from the line of Vikram Suryavanshi from Philip Capital. Please go ahead.

Sir, yeah. Just a quick clarification, sir. Anyway, what you have given is INR 170 is based on book value. If you do it on market value basis, how much it would be approximately?

Charuji?

It will be around INR 272.

270?

Valuation is based on March 31, 2025.

On market price basis?

Yeah. Yeah.

Okay. Just on clarification on JV side, so JV will own the vessels, we got it, but the operation of that will be managed by SCI and will JV charter out to SCI and then they will operate it, or will JV, everything will be operated and managed by JV and whatever JV profit will be there, 50% will be our share? Is there any opportunity for SCI to earn operating income by using these JV vessels?

See, there will be two distinct roles for SCI as an owner also to the tune of 50%. Further, all the operations of JV vessels will be done by Shipping Corporation of India. There, SCI will get some management fees also.

Okay. So it will be management fees. JV will not out-charter it to SCI?

No. See, the JV will own the vessels. These vessels would be then basically out-chartered or will be transporting cargo of Indian oil companies.

The student management fees management will only be done by SCI?

Management, yes. That function, technical and mining, will be done by SCI. For that, SCI will be paid some charges, management fees.

Okay. Okay. Okay. Understood. But it will be around like a thousand, few thousand dollars per day, per month basis, per fee price, like that?

No. No. This will depend on the number of vessels actually whatever time we consider. This detail at this stage cannot be calculated.

Understood. Got it. Thank you, sir.

Thank you.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you. The next question comes from the line of Venkatesh Subramaniam from Logic Tree Consultants. Please go ahead.

My two questions. One is follow-up on the NAV. In the presentation, the NAV that's given is based on book value, but as per market value, it's 272. Is that right, ma'am?

Correct.

Okay. Great. The second question as of 31 March 2025. Okay. Great. The next question is for the acquisition and for the joint venture. You said that it could involve about INR 10,000-15,000 crore of funds to be infused for buying out second-hand vessels. Do you have a plan how these funds are going to be raised? I know that we have some cash reserves, but fundraising, is it in the form of equity or would you be open to getting a strategic partner, a financial partner who can put in, say, 10-20%? Any thoughts on it?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: See, already Government of India Ministry has indicated this 10% is likely to be from MDF, Maritime Development Fund. Further, we will require definitely more and more funds. We will be open for all ideas because definitely as SCI and as a JV, especially as SCI will require a lot of funds.

Would this joint venture be like a subsidiary of SCI, sir? Would that be the newly formed JV under the balance sheet? Would that be the way it would be?

It will be a separate entity. SCI will hold a shareholding of.

Okay. That particular entity will go to the market to raise funds, basically, right?

Yes. If they're required. That is, SCI will have 50%, then it will be liability of SCI to arrange that 50%.

Right. SCI, there are many options open to you, sir. Debt, equity, anything. You have to watch out for that as you go along. Is that right, sir?

Many options.

Many options. Okay. Right. Thank you so much. I'll come back to you.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you very much. The next question comes from the line of Abhishek Getham from Alpha Invesco Research. Please go ahead.

Admiral Jaswinder Singh, Director Liner and Bulk Carrier/Tankers, Shipping Corporation of India: Hello, sir. Thank you for the opportunity. Sir, I wanted to ask a question on our segment. If I see line of business, margins have declined from 28% to 5% year on year. Even a bulk carrier business, which the revenues stayed flat, but profits have dropped from INR 20 crore to INR 2 crore. Even similarly in technical and offshore segment. I just wanted to ask, can you highlight some reasons why there has been such a volatility across our segments? What kind of margin and revenue trajectory we expect in the segments going ahead?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Yeah. Go ahead. The liner segment, if you recall, I had mentioned during my presentation that though the profit is INR 11 crore, indicated as INR 11 crore, but it is much more. We took a hit because I mentioned because of the ECL provision as well as because of foreign exchange rate variation. Actually, if you look at it, margins have not reduced. It's almost the same. This is what the CFO also brought out, that we have taken a hit of about INR 67 crore for the foreign rate variation as well as about INR 30 crore for the ECL provision. Further adding to this, what our admirals have mentioned on the segments. See, bulk carrier in the previous quarter, it was INR 48 crore loss. Now this has come in the positive, INR 2 crore profit. Similarly, TNS sector also, in the last quarter, it was INR 1.57 crore loss.

Now it is on the positive side, INR 1.88 crore. Things are definitely in bulk segment because of the BDI and the market condition. Things are changing fast.

Okay. Sir, go ahead. Sir, another.

Vumika, Conference Operator, Antique Stockbroking Limited: I'm sorry to interrupt you, Mr. Abhishek, but please rejoin the queue for further questions.

Okay. Thank you.

Thank you very much. A request to all the participants that please restrict yourself to one question only so that the management is able to answer everybody's question. The next question comes from the line of Aksher Ajmera from Nirzar Securities LLP. Please go ahead.

Yeah. Thank you so much, sir, for the opportunity. Sir, ये BLCC segment में आपने जो 28,000 के लगभग का खर्चा बताया, उसका एक broad breakup मिल सकता है कि 28,000 में क्या-क्या cost आ जाती है, क्या-क्या cost cover हो जाती है?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: We will come back to you with this breakup and information.

Okay. Okay. Thank you so much, sir.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you. The next question comes from the line of Chetan Phalke from Thirthan Capital. Please go ahead.

Yeah. Thank you for the opportunity. Recently, the VLGCs that we have acquired, what is the balance life of these vessels?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Balance life is roughly 15 years.

15 years. Okay.

Yes.

For the.

We have operated up to age of 30 years.

Okay. Okay. Sir, for the proposed JV, what are the expected timelines to operationalize? As in, अगर आप थोड़ा अगले दो-तीन साल का इसका trajectory हमें समझा दें कि when the contracts will get awarded, when the vessel acquisition will start, when the deployment will start, and how the ministry is helping you to expedite all the approvals and financing and everything. On that level, if you can just help us understand the broader picture around this JV.

Ji. Number one, JV incorporation or target timeline is December this year. That means next month. Further, process is on to float the tenders. We are expecting tender floating for new construction vessels again December next month. Once these two things happen, JV is already operationalized. Coming back to the ministry, ministry is taking periodic review and they are monitoring this entire process very closely.

Okay. So same time next year, we will have at least eight friendships operationalized?

As far as the new vessels, order will be placed definitely, but the delivery will take maybe roughly three years. The second-hand vessel, whatever we induct in the JV, they should be visible in front of us next year like this.

Okay. So how many second-hand vessels we are expected to induct?

Vumika, Conference Operator, Antique Stockbroking Limited: I'm sorry to interrupt you, Mr. Chetan, but please rejoin the queue for further questions.

Sure. Thank you.

Thank you very much. The next question comes from the line of Kapil Agarwal from Dutch & Associates. Please go ahead.

Yes. Yes, sir. Am I audible?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Yes, please go ahead.

Yeah. Yes. My question is regarding our MOU with RITES. So how it will be beneficial for us, we can say, will it be add something in our top line or bottom line?

Can you repeat MOU with?

RIDES.

This is the.

RITES. We have done MOU with RITES, sir.

Yeah. We have done an MOU with them because they want us to transport a lot of their items. Whenever RITES wants something, they find an MOU. Basically, for example, if something needs to be imported or exported or something that needs to be transferred from one place to another place via the coastal route.

Okay. So there is no such concrete guideline that how much kind of revenue or we can say profitability it will add in the near future?

That will depend upon the business that the RITES gives us. Thereafter, it will add on to your top and bottom line. At this stage, it is in form of MOU.

Okay. The kind of MOU we have done will.

Vumika, Conference Operator, Antique Stockbroking Limited: Sorry to interrupt you, sir, but please rejoin the queue for further questions.

Okay. Okay.

Thank you very much. We will take this as the last question for today's call. The next question is from Rakesh Roy from Motilal Oswal AMC. Please go ahead, sir.

Yeah. So my one question is, sir, in today's scenario, tanker market is very demandable. Just why did we sell the tankers to Sri Lanka at this time?

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: No. No. Say you must be talking one of the vessels we have disposed.

Yes.

Completely gets commercial life, and that was used for scrap. That vessel cannot be operated further. That is the reason SCI has to follow that life cycle process. That is the reason it was disposed of.

Okay. Last question, sir, last time, sir, is asking, and how much vessel we add from the second-hand and how much is for new one for JV?

See, that breakup is not yet available. JV incorporation formation is in progress. Once JV is in place, this decision will be taken by the JV. Definitely, SCI will be part of that process.

Any idea how the price track market in next six months for tanker and bulk carrier and liner for next six months? How is the market pricing in term of pricing?

Bulk carrier and tankers are looking upward, positive. Container also is not bad. Container market will depend on the Red Sea situation, basically. Let's see how this evolves. If Red Sea opens and if Red Sea remains as it is, and definitely demand situation in Europe, that need to improve for the container segment.

Okay. Thank you, sir. Thank you, sir.

Thank you, Ji. Thank you.

Vumika, Conference Operator, Antique Stockbroking Limited: Thank you very much. Ladies and gentlemen, I would now like to hand the conference over to Captain B. K. Tyagi, Chairman and Managing Director, for closing comments. Please go ahead, sir.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Thank you, Vumika Ji. Thank you, ladies and gentlemen. I'll close by thanking you all for a very active participation, the questions you all had. Thank you, everyone, for participating in this con call. In case you have any further queries or questions, you can get in touch with our investor relation team. Thank you very much, everyone.

Vumika, Conference Operator, Antique Stockbroking Limited: On behalf of Antique Stockbroking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

Captain B. K. Tyagi, Chairman and Managing Director, Shipping Corporation of India: Thank you. Thank you, everyone. Thank you.

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