Hosted by Kirin Advisors. 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 touchtone phone. Please note that this conference is being recorded. Ladies and gentlemen, the call duration is for one hour. I now hand the conference over to Ms. Chandni Chandhay from Kirin Advisors. Thank you, and over to you, ma'am.
Thank you. On behalf of Kirin Advisors, I welcome you all to the conference call of Cochin Shipyard Limited. From the management team, we have Shri Madhu Nair, Chairman and Managing Director, Shri Jose V J, Director of Finance, Shri Neelakandan, AN Chief General Manager, Planning and Project Management, Shri Rajesh Gopalakrishnan, Chief General Manager, Ship Repair, Shri Harikrishnan S., Chief General Manager, Ship Building, Shri Shibu John, General Manager, Finance, Shri Shyam Kamal N., Company Secretary. Now, I hand over the call to Shri Madhu S. Nair. Over to you, sir.
Thank you. Good evening and a warm welcome to the conference call of Cochin Shipyard Limited. As has been briefly mentioned, I'm Madhu S. Nair, Chairman and Managing Director of Cochin Shipyard Limited, and the senior officials whose names have just been introduced are with me. As the CMD of Cochin Shipyard Limited, I'm proud to present the outstanding performance of the company for the last financial year. Let me begin by highlighting some of our most significant achievements during Q4 2024 till this date. On the new orders from January 2024 till date, we're happy to announce the signing of a contract with a prominent European client for the design and construction of hybrid service operation vessel, SOV, which is slated for delivery in the year 2026.
Subsequently, CSL has secured another contract from the same client for the design and construction of a hybrid SOV with an additional option for two more such vessels expected to be completed by the end of 2026. Both these contracts put together are in the range of INR 1,000-1,200 crores. Furthermore, our wholly-owned subsidiary, UCSL, has secured an order for a robust 70-ton bollard pull tug for Polestar Maritime Limited and another order for three 70-ton bollard pull tugs for Ocean Sparkle Limited. The company's other wholly-owned subsidiary, Hooghly Cochin Shipyard Limited, HCSL, has secured an order for the construction of two 40-ton bollard pull ASG tugs for Industrial Handling Private Limited. All these orders aggregate to around INR 250-300 crores.
On the ship repair front, CSL has entered into a contract with the Indian Navy for undertaking medium receipts of two Indian naval vessels, and the value of which comes to around INR 150 crore. Additionally, CSL has signed the Master Ship Repair Agreement, MSRA, with the U.S. Navy, which will facilitate the repair of U.S. naval vessels under the Military Sealift Command in our shipyard. We are honored to have the Honorable Prime Minister of India flag off India's first indigenously built hydrogen fuel cell vessel, a remarkable achievement that underscores our commitment to sustainable maritime solutions. We have also delivered two state-of-the-art hybrid electric catamaran hull vessels for Kochi Metro Rail Limited under the Kochi Water Metro Project. Our subsidiary, UCSL, has also delivered the vessel named Ocean Splendor, 62-ton bollard pull tug built for Mrs.
Ocean Sparkle Limited, and a 70-ton bollard pull tug named Konnath Star for Mrs. Polestar Maritime Limited. Turning our attention to other major events, the Honorable Prime Minister dedicated the International Ship Repair Facility, ISRF, and the world's first step dry dock to the nation on January 17, 2024, marking a significant milestone in the augmentation of India's maritime capability. These projects are significant for the company as it's the highest CapEx, around INR 2,769 crore, ever made by CSL in its long journey of over 50 years. The civil works for the new dry dock project, including the dock floor, caisson gate, pump houses, and substations, etc., have been fully completed, and the installation and commissioning of the 600-ton gantry crane are currently in progress, and the new dry dock is expected to be fully in operation by August 2024.
The ship lift system, two workstations, and afloat repair boat of ISRF projected at Wellington Island are operational, and it is expected that ISRF will be fully operational after the completion of certain allied works by August 2024. We have also successfully carried out the main and surface runs of the high-endurance autonomous underwater vehicle, HE AUV, at our ISRF facility in Kochi, meeting all the required parameters. CSL has also been awarded the prestigious Kerala Industrial Safety Award 2023 under the category of Very Large Factories in Engineering, instituted by the Government of Kerala, reaffirming our commitment to excellence in safety standards. Turning my attention to the financial performance of the company, I'm pleased to report that Cochin Shipyard has registered its all-time high turnover in the financial year 2023-2024, surpassing the previous high achieved in the financial year 2019-2020.
On a consolidated basis, the turnover in 2023-2024 stands at INR 3,830.45 crore compared to INR 2,364.55 crore in 2022-2023, representing an increase of 62%. Furthermore, our profit before tax in 2023-2024 has reached INR 1,070.94 crore, a 156% increase from the INR 418.44 crore recorded in 2022-2023. Our profit after tax in 2023-2024 is INR 783.28 crore, a 157% increase from the figure of INR 304.71 crore in the previous year. It is also worth mentioning that the company's ship repair turnover has crossed INR 1,000 crore, and the net worth of the company has crossed the INR 5,000 crore mark for the first time in the history of CSL. In the financial year 2023-2024, CSL derived 72% of its total operating income from shipbuilding activities, and the remaining 28% came from ship repair operations.
Within the shipbuilding segment, 46% of the revenue was generated from the work on the indigenous aircraft carrier, and the remaining 54% was from other shipbuilding projects. The ship repair units, apart from the main unit in Kochi, performed well during the year. CMSRU, CSL's Mumbai Ship Repair Unit, registered a revenue of over INR 150 crore, and CANSURU, CSL's Andaman and Nicobar Ship Repair Unit, achieved a turnover of about INR 100 crore. The other ship repair unit, CKSRU, also demonstrated reasonable performance. Regarding the subsidiary companies, Udupi Cochin Shipyard Limited, UCSL, which CSL had acquired through the IPC process, has turned around completely. It recorded a total revenue of INR 186 crore, a PBT of INR 3 crore, and a PAT of INR 1 crore during the financial year, compared to a loss of INR 9 crore in the previous year.
The order book position of UCSL stands at approximately INR 800 crore as on date. The other subsidiary, Hooghly Cochin Shipyard Limited, HCSL, has started securing new orders with a total order value of approximately INR 150 crore as on the reporting period. The company is optimistic about achieving a good execution rate in the upcoming financial years for HCSL. In recognition of our financial performance, the board has recommended a final dividend of INR 2.25 per share, aggregating to INR 59.19 crore. Coupled with the interim dividends paid during the year, the total dividend for the financial year 2023-2024 amounts to INR 256.5 crore, which is 32% of the profit after tax. Furthermore, I would like to remind that the company has redeemed its tax-free bond amounting to INR 100 crore in December 2023, and as of now, the company is practically debt-free with only INR 23 crore as long-term debt.
Also, the company in January 2024 completed the split of equity shares in the ratio of 1:2, that is, one equity share of face value of INR 10 was split into two equity shares of face value of INR 5 each. Turning our attention to the status of vessels under construction, we have made significant progress across various shipbuilding projects. On the anti-submarine warfare shallow water craft corvettes, ASW SWC, we have a total of eight vessels under contract, with three vessels launched in November 2023, and the machinery outfitting and other works of these vessels are underway. The keel has been laid for further two vessels, that is, number four and five in the series in December 2023, and the hull block erection is progressing steadily. The remaining three vessels, vessel number six, seven, and eight, are in advanced stages of fabrication.
With regards to the hybrid electric catamaran hull vessels for Kochi Metro Rail Limited under the Kochi Water Metro Project, we have a total of 23 vessels under contract, of which 14 vessels have been delivered, and the remaining nine vessels are under various stages of construction. For the 7,000 deadweight multipurpose vessel project for European clients, we have a total of eight vessels under contract, and block erection and outfitting are underway for two vessels, while the keel has been laid for other vessels, which are in various stages of construction. Additionally, we have two commissioning service operation vessels, CSOV, and one 12,000 cubic meter trailing suction hopper dredger, all of which are under block fabrication stage. Notably, the hydrogen fuel cell vessel has completed its trial and has sailed off from CSL to Varanasi on 18 May 2024.
As we look towards the future, I'm pleased to inform you that our current order book position is healthy, with approximately INR 22,000 crore of unexecuted orders, including the ship repair orders, which typically amounts to a little bit of higher level than earlier times at about INR 1,200 crore at this given point of time. These achievements are the result of hard work, dedication, and innovative spirit of our entire CSL team, right from the senior management to the worker level. I'm confident that with the continued support of all stakeholders, we will maintain this momentum and drive sustainable growth that will create value for our shareholders. For the financial year 2024-2025, we would like to guide with a target of 20%-25% increase in the top line.
Our past level will have to be tempered due to the higher depreciation cost from the commissioning of the ISRF and the new dry dock project. We expect to sustain the EBITDA at the level which we have previously guided. Thank you for your patient hearing, and now we would be happy to take any questions. Thank you. Jaihind.
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 the 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. Our first question is from the line of Deepak Krishnan from Kotak Institutional Equities. Please go ahead.
Hi sir, I hope you can hear me fine.
Yes, Deepak.
Yeah, I just wanted to understand, you said EBITDA margin previously guided in the range of 18%-19% on a consolidated basis. Is that understanding correct?
Can you just repeat that last part of the question? We were talking about the EBITDA margin.
Yes sir, you said EBITDA margin will be in the range of previous guidance. So does that imply more closer to the 18%-19% on an annual basis, the EBITDA margin guidance?
That's right.
Sure sir, maybe just a follow up on that. Factors that drove such high EBITDA margin this quarter, is it largely due to the 400-odd crore ship repair contract that we have that continues till Q1 FY 2025? The IAC one sitting in our book, are those two factors driving margins ahead in this particular quarter, or was there any one-off factor that kind of?
It's not one-off. A large thing, as you rightly said, we had good projects and project execution both on the ship repair side aided by the aircraft carrier in the dock, and the IAC revenue is also coming in. There has been good traction both on the execution side, ship repair, and ship repair. It's not largely one-off.
Sure, and maybe just a follow up question. The agreement that we have, the MSRA, by when do we kind of see any orders coming through, or is it just like a pre-qualification, and how do things really progress from the signing of the MOU?
Pre-qualification, it is a formal agreement, and we are expecting inquiries, and offers will be submitted. It will have to be taken through, but the company will push for earlier starts on this. I'm not able to give timelines on this, but it's a full agreement, and we'll have to get into execution earlier.
Sure, but is there like a guaranteed volume or anything that you can comment on?
No. No. No guaranteed volumes. No guaranteed volumes, but the company has been evaluated thoroughly, and the final inspections were in Rajesh, this was in January or February? January. January by a 17-member team spread over three days, and the feedback has been excellent.
Maybe just one follow up, if you could indicate the order backlog within sections. You've given the overall number of INR 22,000 crore, but within different commercial exports that you historically shared in the presentation.
We have uploaded this on our there's a breakup in the presentation, isn't it? It will be uploaded immediately after this call.
Sure sir, okay. Maybe I'll just come back on the question too. Those were all.
Thank you. Our next question is from the line of Umesh Rao from Numero. Please go ahead.
Hi sir, good evening, and congratulations for the good set of numbers. My first question is pertaining to future prospect pipeline on the ordering side, both on shipbuilding and ship repairing. Could you please highlight key projects which you are expecting in the next couple of years?
Ship repair, Rajesh, can you just to light on the ship repair part in brief?
Yeah, ship repair, as was mentioned briefly, typically ship repair, we do not maintain an order book because inquiries keep coming, and we quote and take orders.
This particular is slightly different because we already have secured sort of orders for the entire year, and most of them are mainly from the Navy, a couple of large weapon platform refit projects, and of course, one major conversion project from the Navy. Along with that, there are also MOU projects which we are handling for the Legislative Administration. These are all assured captive projects. From that sense, the order book for this particular year for ship repair looks quite well settled, and the final figures will actually be revealed when we complete the negotiations, especially on the naval projects.
On the shipbuilding side, you're talking about further order inflow. We'll have to wait a little bit to see on the defense side. On the international side, as was briefly mentioned, we have secured these recent two contracts for the SOVs, and I will not be able to give you much more information, but I can tell you that there is good traction we are seeing on similar vessels from Europe, and we expect to begin more contracts, naturally with the caveat that all going well.
Okay. A follow up on shipbuilding prospects. Basically, there is a next mission corporate order which is in the pipeline, and what we are hearing, there are about four shipyards which are now shortlisted by MOD to participate in the tender. I just wanted to clarify whether Cochin Shipyard has qualified in that particular order or not.
I wouldn't want to comment on that specific information because it's not a formal communication kind of a thing, so we would not want to comment on matters which would be the prerogative of the Indian Navy.
Okay, got it, sir. My follow up on the repairing side is more of on the utilization of new facility which got commenced recently. How you are planning to kind of ramp up revenue from that particular facility, and maybe in a medium to longer term, maybe three to five years down the line, what kind of repairing top line you are seeing? Along with that, maybe what kind of margins you are kind of seeing more of sustainably to maintain on the repairing side?
The facility for ship repair has been commissioned, ISRF, as I briefly mentioned. We expect this to be put into operation from August 2024 onwards.
We are coming up shortly with a global tender for a global operating partner, which will be out in the open shortly. Over the next few years, we expect significant revenues to come in, but I would not want to put figures onto this, at least in the we have internal projections and we have a plan of action, but it probably would not be proper to put this across in the open at this stage. Number of vessels, there will be because, as we already said, the facility is to cater to 82 vessels in a year of size less than 130 meter in length. You were wanting a guidance in three to five years' time, but I can say for sure that in three to five years, it will actually touch that kind of numbers on the ship repair.
We would not want to put money values into it at this stage.
Sir, on the margin side, is it fair to say that 25%-30% is more of a sustainable EBIT margin range for ship repairing business?
My Director Finance would like to guide you to 22%-23%.
Okay. Sir, that is more of at the company level, right? At a blended shipbuilding plus ship repairing level, right? I was asking more from the repairing point of view only.
No, see, repairing, you cannot compare because this quarter performance or this year's performance cannot be taken as a guidance because this quarter, since it is a better execution, the EBITDA level is higher. Going forward, at a blended level, you can expect around 17%.
We always say 17%-19% blended level. We would like to be conservative, but we would like to say 17%-19%. Ship repair, we would like to say 22%-23%. What is the final figure? Probably you can take a little bit of your view, but we would like to convey these levels on a prudent basis.
Got it, sir. Fair enough, sir. Sir, you have mentioned in your opening remarks that depreciation cost from 2025 onward will go up significantly. Is it fair to assume that new capacity will have a depreciation rate of closer to, say, 6% and maybe additional cost of about INR 500 million incrementally on a base of 24%?
No, both capacities put together is around INR 2,800 crore. So the additional depreciation will be around INR 140 crore, approximately. Not exact amount, around INR 125 crore to INR 150 crore.
Okay, but would that be applicable from FY 2025 onwards, or that will come up in phases? So basically, first, ISRF, and then we'll?
Plan to fully commission that project by August 2024. Around eight months, it will be there. The full depreciation will be there for almost eight months of the financial year.
Got it, sir. Got it. Sir, my last question is more on the balance sheet side, where if I look at inventory position for FY 2024, that has increased by about 40 days. If I look at on an average, in the last few years, we were maintaining closer to about 45-50 days, but for 2024, it was more closer to 100 days. Was there any particular reason behind this?
Yeah, because now both ASW and the NGMV, the new generation missile vessels, both the projects are coming to the production stage. A lot of stock or materials have started reaching CSL.
The inventory has gone up this year, and it is likely to go up further also. Because for the NGMV also, the material commodity is quite high.
Okay, okay. Got it. Similarly, advances from customers, that has also seen marginal drop as compared to FY 2023 and FY 2024. Would that continue, assuming that our execution from ASW, Telwater Craft, and NGMV will go up only from current level?
Yeah, it is likely to come down because the advance from customers, mainly it was from the NGMV project, but now since the execution starts, the advance will come down.
Okay, okay. Got it, sir. I'll join back the queue, and all the best, sir. Thank you so much.
Thank you. Thank you.
Thank you. Ladies and gentlemen, a reminder to all participants, you may press star and one to ask questions. Our next question is from the line of Pritam from Beltway. Please go ahead.
Thanks for the opportunity. Kudos to Madhu sir and all of your team for great results. My question is regarding decarbonization and the opportunity for Cochin Shipyard in green vessels. How will you give the opportunity for the hybrid vessels, zero-emission vessels, both large and the medium size, as well as the green tugs, petroleum boats, etc.? We saw some orders coming along on those fronts. Also, how we are technologically advanced when we will have to compete against a few of the Japanese or Korean companies also, perhaps with the European policy that is coming up by 2027-2028, that they are probably levying penalties for the diesel petrol boats and more efforts towards green?
On the green vessels, from an international point of view, Cochin Shipyard has got a generally good footing in the European market, and we expect orders to come in from that segment. At least most of the companies looking at options would like to talk to Cochin Shipyard. As I said, if various terms and pricing is good, we are expecting orders from that side. We are set in motion. I do not want to use the word firmly entrenched, but we are almost there in the international functional vessel part. Specialized vessels like wind construction vessels and other things, we are generally good. Coming to the Indian market, you were alluding to the green tug policies and other things, and we again feel there would be a good opportunity for CSL, other shipyards also. We have been working on this for quite some time.
We are expecting at least 8-10 vessels being ordered over the next year or so by the major ports through private entities, of course. We expect to be very much actively part in those processes. I'm not in a position to say exactly what we'll get, but both international green vessels on the functional vessel side and Indian vessels on the green tug side, we are good. The other things on the green vessel side, green ferries and other things what we are talking, it will not translate into too much of business at this stage, but we would be a front runner in all those aspects. You also asked a question on the technology and competition. We are good on that. We are good from a competitive point of view, and we have our methods to do appropriate partnerships and collaborations, which also.
That is not a great worry at this stage. That is, I presume this gives you an overall feel of this stage.
Thank you. Regarding Cochin Water Metro Station, do you see replicas of those coming in other areas of India? Are there any inquiries or researchers who will be coming on the same area?
It is not exactly the same, but definitely there is. I can confirm that West Bengal government is talking projects. We are actively involved there. There are others also. We are also waiting for the outcomes.
Great. Thank you, sir. Thank you.
Our next question is from the line of Vivek from Shanti Financial. Please go ahead.
Yes, thank you. Congratulations. The Empire Shipyard sector itself is catching the fancy of the market, and Cochin is probably the pioneer for everything to do with Indian vessels. I'd like to understand broadly.
You mentioned that you have an order book of so and so, but then there are so many other projects in the pipeline. I would like to understand the breakup of what are orders on hand. You mentioned around INR 2,000 crore. What is the size of the volume? What is the size of the revenue that is part of your pipeline? I would also like to understand if there is going to be a call transcript that is going to be posted on your website or any of the normal financial websites for us to take stock of the numbers that you mentioned because there are many projects and many different numbers that are being discussed. Thank you.
Regarding the order book and the order possibilities, I would request you to kindly wait till the end of this call, and immediately thereafter, we are uploading a presentation in which there are two slides giving a fair bit of information on the order position. Overall, for a figure, INR 22,000 crore on the shipbuilding side, out of which about INR 15,000 crore is defense part, and the balance is the non-defense part. The ship repair order book is about INR 1,250 crore, which normally earlier, if you've been following us earlier, we always used to guide about an order book of INR 600-700 crore. Ship repair order book is also at a much better level right now. You'll get more information when we upload this after this call.
Thank you, sir.
Thank you.
Thank you. Ladies and gentlemen, the call duration is for one hour. In order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. Should you have a follow up question, we request you to rejoin the queue. Our next question is from the line of Viraj from Jupiter Fine. Please go ahead.
Congratulations, sir, on the good set of numbers. My question is regarding the guidance you gave of growth of 25% and EBIT of 19%-20% EBITDA margins. So the PAT should be in the range of 12%-14%. Is that correct to think? Number one. Number two, what are the factors giving you some confidence that the growth will be double-digit, maybe 20%-25% in revenue growth? That's my question, number one. Question number two is on the ship repair, sir, with U.S. listing connection plus Europe. What kind gives you more color in terms of growth in this ship repair business for a period of time? Just your sense. I'm not asking for a bad answer, just your sense for a period of time to understand. Thank you, sir. That's it from my side.
On the growth guidance, 20%-25% on the overall turnover, that's based on because we are aware that shipbuilding and ship repair for the year, we talk based on contract in hand and our current execution status, and the confidence is based on that. There is a top-line growth on both shipbuilding and ship repair together. Your next question was on ship repair connected with the MSRA with the U.S. Navy. Currently, that is financial figures from MSRA have not been factored in.
Our ship repair story, what we have conveyed, is based on what we are currently in and what we are seeing or potential to see over the next 12-18-24 months. We will not be able to record it, but we are also tracking continuously in the market what kind of orders in the ship repair space will come, both from defense and from our friends in the commercial space. It is based on that. Specifically on the U.S. MSRA, all I can say is it's a very significant step for Cochin Shipyard because the U.S. vessels, both what we call the MSC sealift vessels and the combatant vessels, there are a lot of challenges and a lot of requirements, but Cochin Shipyard has been cleared after a long and detailed assessment.
We understand the entire teams have been happy with our performance and what we have done, but we are waiting for the first order and probably the second order to come in and to exactly convey to people like you how exactly it is going. All in all, if I may use a word, it is a very positive step for Cochin Shipyard. I would not want to add figures on it.
Sir, my follow up on this would be, if the aircraft carrier comes, this will be additional to all the guidance, right? Am I thinking it's correct in this direction?
That is correct.
Okay. Thank you, sir. Good luck.
Thank you. Our next question is from the line of Sagar Gandhi from Invesco Mutual Fund. Please go ahead.
Yeah. Sir, my question is related to ISC2 , so I'm not asking you whether it will come or not, but if it has to come, will it be 2026 or 2027?
Sagar Gandhi, your guess should be as good as mine, and if at all I have better information, I will not be able to share it also here. That's all.
Okay. Sir, my second question is, considering that next two years are likely to be very heavy in terms of delivery or revenue booking, so in absence of ISC2 , will FY 2025 or 2026 be peak revenue?
We don't want to consider it that way because with ISC2 , there is a plan of action. Without ISC2 , if at all such a scenario happens, I think we should still have a plan of action both on our defense and non-defense side.
Defense also, there are projects coming in. We will be there strongly. Non-defense and the export side, as we have just explained in interactions earlier, we feel things are good. We do not want to talk about peak revenue. As a company, we want to continually grow both top line with a steady-state margin level. ISC2 coming in definitely would be great and welcome, but in case because it is not under our control and there are a lot of other reasons how it will move forward. We would nevertheless confidently talk growth, at least for the next 5, 6 years as of today.
Okay. Sir, when is our new shipbuilding facility getting commissioned? Ship repair, you said August 2024.
Shipbuilding also August 2024. It is actually the crane is getting installed. We probably are putting a picture after this call. The crane is halfway through. The crane gets commissioned and a little bit of work. August 20 this year, we expect to start shipbuilding works in the new turnover.
Okay. Thank you so much.
Thank you. Our next question is from the line of Dhiraj from Samvad Financial Service LLP. Please go ahead.
Thanks a lot for providing me the opportunity. Can you hear me?
Yes, sir. Yes. Okay.
Thanks a lot for providing the opportunity. My one request, which you have already said, that we will be putting the presentation. It would have been better had the presentation been circulated in advance. That would have reduced and improved the understanding for all of us. Just a request, whenever you do phone call, please circulate the presentation in advance.
We will do that with the positive direction, and we will do that for sure.
Yeah. Second part, while we do a kind of path-breaking work, at least we are, there is no update about what kind of R&D, whether we have an R&D laboratory or research lab or IP kind of things, patents, etc. Can you share some insights and share whatever you can disclose on those parts? Are we protecting our IP because we are doing so much good amount of work? Any thoughts of management, and if you can disclose what exactly your effort on that?
See, you are bringing out a very important point. See, we have Cochin Shipyard due to historical reasons. It's not been a, we have been a shipbuilder and ship repair, and it's not been too much of R&D and IP kind of thought process.
Over the last many years, the kind of knowledge that is coming up in the company, that is why end 2021, early 2020, end 2021, we set up a new division called the CSL Strategic and Advanced Solutions. I can tell you, we have set it up as a new division. Our divisions are shipbuilding and ship repair, the business division. We did not call this new CSAS as a group. We actually call it as a division, wanting to convey to ourselves and to the external stakeholders that this is actually a potential growth area for us. Within the new CSAS is where we are doing this innovative work, including the hydrogen fuel cell vessel and various other things which we have conveyed. Currently, we have commissioned work on a fully indigenous autonomous surface vessel, and we expect it was a 24-month project.
We are already about six, seven months into the project, and we are teaming up DRDO with ISCs and at least seven startups. Similarly, there are other work also being undertaken. Regarding IP and protecting the knowledge, yes, there are certain aspects and certain things which we are doing, but a little bit beyond the IP, we are recording, we are documenting, and we are holding on to the knowledge much better. CSAs will be our vehicle to take this forward.
Sure. Thanks a lot for updating and performing so well. Just one more suggestion in the annual report for FY 2024, if you can give some whatever you can disclose about your research and IP effort, that would be appreciated. Anyway, you are supposed to disclose it via answer, but just a humble suggestion. Wish you all the best.
Whatever best possible we can do, we'll definitely do.
Sure. Thanks a lot. Wish you all the best.
Thank you.
Thank you. Our next question is from the line of Gagan from ASK Investments. Please go ahead.
Yes. Good evening, sir. Can I order this?
Yeah, yeah. Please go ahead.
The first question is on this very significant addition to gross block of almost INR 2,800 crore. What could be the peak fixed asset turn one could expect from this?
Can I repeat that question?
I'm saying that your current gross block is probably closer to INR 1,300 crore, on which you are doing a sales turnover of INR 3,400 crore or more. This new gross block addition that you're doing, this new CapEx of INR 2,800 crore, which will get added to the gross block, what could be the potential fixed asset turnover on that? What could be the peak fixed asset turnover on that?
One second. It will be around, I don't have the exact numbers right now, but it will be around two to start with.
Okay. I mean, when these capacities are fully utilized, you are saying essentially INR 5,500-5,600 crore contribution to sales can come from them eventually when they are fully utilized.
I think it's safe to assume that way.
Okay. Thanks. Would it be possible for you to elucidate in a little more detail your pipeline on the commercial side pertaining to hybrid vehicles or, sorry, hybrid vessels, especially which we're getting from the European or Scandinavian countries? Some idea of the pipeline that is possible from there?
What we already have contracted, you'll get this information when we upload this figure. When we are talking about pipeline and what the potential possibility of the PI outside is, all I can say is there's enough on the green vessels, on the short sea vessels getting replaced, there's enough. See, Cochin Shipyard, what we are looking at, it's not just about grabbing orders. It is also to make sure that we are generally good. I won't say exact, but we are generally and largely good with execution and what we can handle. Within that, we want to maximize the, what shall we say, the value for the company, which would be a combination of financial and strategic insight. We are also a bit choosy about the project, choosy about the client, choosy about how much of risk because any new aspect we are getting into the European market because these are new things, even in the European market.
Risk is also a factor. It is a combination of these things. As an organization, we want to be prudent. We want to be aggressive, but at the same time, we want to be very prudent in what we do. I can tell you, currently, there is enough in Europe for a company like Cochin Shipyard. That is what I would like to say if that answers your question.
All right, sir. This shipbuilding ship repair order book of INR 1,250 crore, is that executable in less than 12 months, or is it executable in 12 months or more?
It spreads beyond that also. It spreads beyond that also. That is not the ship repair. There will also be orders which we will pick up as we move on during this year. It is not that we pick up.
For example, if we are talking about everything today, that means for the next 10 months, we won't pick up any new work for this year. That is not the way we do ship repair. Maybe two months down the line, I would be picking up various other orders also in between for execution this year itself. We are, again, targeting significant growth in our ship repair top line also for this year as we move forward. We are happy, and you would have noted that for the first time in our history, we have crossed INR 1,000 crore on ship repair. It's a tough job, ship repair, but between Cochin Shipyard unit, the three ship repair units elsewhere, and the upcoming ISRF, we are still hoping to do good increases in top line as we move forward.
We, again, feel there is good traction in the market to support that kind of a growth.
The final question, sir, you mentioned the additional depreciation from the new facilities, but there would also be additional employee and overhead costs related to the new facilities. Can you give some idea of what could be the additional overheads and employee costs coming from the new facility?
We may not be able to put an exact figure on it, but all I can say is, see, these new facilities, which the new dry dock, let me say, the new dry dock is not a standalone facility. It is contiguous to the present Cochin Shipyard main unit. Largely, we are liberating the existing facility. It would be marginal additions on the labor side. Wherever it is core labor, that is what it will be, our own.
Otherwise, there will be a significant part which is outsourced on a business and need basis. But the core aspect, let's say the plant maintenance, because it's a brand new facility, we would put our own people to handle that facility. Similarly, on the ISRF side, if you were there earlier on the call, I had mentioned that we are looking at an operational partner. I can't disclose more details at this stage, but this will be coming out in the open when we do the tenders, hopefully within a month from now. We are trying to bring in a global operating partner. It is not just about increasing the number of people, but again, in ISRF also, it's a brand new ship lift and crane, which would be our own core people who will handle the electronics and the ship lift.
We are cognizant of the fact. We do not want to block up anything, but it would be more marginal. It will not be, it will not be multiplier kind of a thing depending on the size and scale.
When you say you are looking for a partner, can you elaborate a little more on the business contours of this? Is the partner the one who will operate the ship repair facility, which will be owned by you? What exactly are the contours of this tender?
I will not get into too much detail, but the partner is not just to do the work. It is to make sure that we are best in class in the world. Turnaround times for us in ship repair, we are good in India. We are good generally, but we are not the best. We still need significant improvement.
For that significant improvement, we need to learn and work with some of the best in the world. We need to liberate some of the ecosystems, which is supply chains and service provider chains, which many of them have developed in places like Singapore or the Middle East. We also would like to see them coming in with their clients. A close example would be the Indian airport when some of the leading Indian operators have worked on this, but then they are also in league with some of the best international operators. I would like to stop at that, but that is the whole intention.
Okay. Thank you. I'll get back in the team. Thanks for taking the questions.
Thank you. Our next question is from the live line of Deepak Krishnan from Kotak Institutional Equities. Please go ahead.
Hi, sir. Maybe just one follow up. Just wanted to understand how are we looking at a potential ISC execution timeline, given that we've already done it in the past. Suppose the order comes through, how many years for design and typical execution after that from fit-out, launch, as well as then final delivery?
See, again, this is something which we wouldn't want to talk too much, but whatever we have said on record earlier, if the next carrier when it comes is largely based on the same or similar platform as what was Vikram, then we have said we are somewhere around 8-10 years. This is what we have said. I would like to stop at that because, again, it's a prerogative of the MOD and the Indian Navy to talk more on this.
Sure, sir. Maybe just any outlook on the landing platform, though? Initially, we had indicated that project could be potentially coming up for RFP over the next two years. Anything that you are seeing incrementally positive on that front?
Not yet. Probably maybe after the elections and a new government comes in, maybe there will be more traction on that.
Sure, sir. Thank you. Thank you.
Ladies and gentlemen, that was the last question for the day. I now end the conference over to Ms. Chandni Chandhay for closing comments.
Thank you, everyone, for joining the conference call of Cochin Shipyard Limited. If you have any queries, you can write to us at research@greenadvisors.com. Once again, thank you for joining the call.
Thank you. On behalf of Kirin Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
Thank you.