DEAR SHAREHOLDERS,
At the outset, let me welcome each one of you to this Annual General
Body Meeting, and it is my pleasure to share the Annual Report of our Company for FY
2023-24. It is often said that, "You have to have a big Vision and take small steps
to get there". GRSE's Vision 2030 is definitely ambitious and we intend taking
quick steps to achieve our Vision. Towards this, the year 2023-24, marked by significant
achievements and the launch of numerous important initiatives has certainly set the right
tempo. Even as the world experienced chaos and disruption due to highly volatile
macroeconomic environment owing to conflicts in Russia - Ukraine region and the Middle
East, "Team GRSE" has shown exceptional resilience and delivered our best ever
financial performance during FY 2023-24. Our focus on continuous process improvement,
innovation, sustainable shipbuilding practices, new technology adoption and steadfast
commitment to customer delight has reinforced our pole position in shipbuilding and
Defence sectors. Here, I would like to state that it is your continued support and trust
over the years, that has given us the confidence to take challenges head on and push past
all complexities to deliver consistent value for you each year.
THE YEAR IN PERSPECTIVE - FINANCIAL PERFORMANCE
FY 24 has been a landmark year for GRSE, and I am happy to inform you
that despite supply chain problems and rising costs, GSRE delivered outstanding financial
results across all key metrics. The Revenue from Operations' stood at 3,592.64
crore as against 2,561.15 crore in the previous fiscal year, registering a growth of 40%.
Our Profit Before Tax' and Net Profit' recorded were
480.92 crore and 357.27 crore respectively, both registering a 57%
increase over the previous financial year. All these key parameters (Revenue from
Operations, Profit Before Tax & Net Profit) have been highest ever in history of the
company. Furthermore, Earnings per Share' were 31.19 compared to 19.91 in FY
23. This strong financial performance was driven by a healthy order book and an effective
project execution strategy.
I would like to make a special mention on our Q4/FY 24 results, where
the Net Profit' doubled to 112 crore and Revenue from Operations'
recorded a growth of 70% to 1,016 crore, over the corresponding quarter of FY 23. Our
operational performance was also strong, where EBITDA surged by 343% to 90.60 crore.
PHYSICAL PERFORMANCE HIGHLIGHTS
The shipbuilding execution milestones that we achieved during FY 24
reflect continued focus on fulfilling contractual commitments to our customers. This is
exemplified by the delivery of INS Sandhayak, the largest survey vessel to be built in
India, and launch of seven ships during the year. Vindhyagiri', the 3rd
P17A Advanced Frigate, Sanshodhak' the 4th Survey Vessel (Large) and
four Anti-Submarine Shallow Water Crafts (ASW SWC) Anjadip', 'Amini',
Ajay' and Akshay' took to waters during the year. Besides these,
GRSE's foray into green technology vessels also took a giant leap with launching of
zero emission NG Electric Ferry Dheu', the largest vessel of its kind in this
country. We are currently building 18 warships for the Indian Navy, and delivering these
vessels to the satisfaction of our customer is of utmost priority. The first ship of
Project 17A, which is the flagship project for GRSE, is on target for delivery in FY 26.
The second and third ships of the projects are expected to follow closely at six-month
intervals. The first Survey Vessel (Large) was delivered on 04 Dec 23 and following her
wake, the remaining three ships of the project are at various stages of progress. The
second ship is being readied for delivery during Q2/FY 25. Six out of eight ASW Shallow
Water Crafts have already been launched and the last two are scheduled for launch during
this year. Construction of all four Next Generation Ocean Going Patrol Vessels have also
commenced and this project progressing on schedule. We started focusing on ship repair
segment two years back, when we took over three dry-docks in Kolkata on a strategic lease
from Syama Prasad Mookerjee Port and since then, we have been moving from strength to
strength, having completed 14 refits for the Indian
Coast Guard. We are also, currently executing a major refit for the
Indian Navy, and these accomplishments underscore our commitment to deliver comprehensive
maritime solutions across the spectrum. The Bailey Bridge division despite being a small
vertical, leads the Indian market today. Determined efforts to leverage the expertise in
this niche segment, coupled with introduction of new products and a proactive marketing
strategy has resulted in revenue from this division surging from 69 crore in FY 23 to
140 crore in FY 24. MoUs which are in place with the Indian Army and other key national
organisations such as Border Roads Organisation, National Highways and Infrastructure
Development Corporation, have raised prospects of additional growth opportunities in FY
25.
EMBRACING INNOVATION & ADVANCED TECHNOLOGIES
This year saw us take major strides in embracing innovation and
advanced technologies. The launch of zero-emission Next-generation battery-powered
electric ferry, Dheu, for West Bengal Government heralds a new area of expertise for the
shipyard. The design and construction of this vessel not only emphasizes our commitment to
sustainable and environmentally friendly maritime solutions, but also throws open the
doors to an emerging lucrative green energy vessel market.
Realising the need to leverage our complimentary skillsets and
experience, GRSE has entered into MoUs with a number of industry partners to make forays
into new and exciting market segments. Launch of "Neerakshi" a Man Portable
Autonomous Underwater
Vehicle (MP-AUV) in Jul 2023 with multi-role capabilities is an outcome
of one such partnership. We are also working on the development of Unmanned Surface
Vehicles (USVs) and are looking forward to delivering our first USV to NSTL in the second
quarter of FY 25. These advanced technology vessels have demonstrated the capability of
GRSE to be future ready, and we intend to pursue development of such platforms to keep up
with the rapidly evolving technology landscape and emerging customer aspirations. MoU for
production, sale, and service of medium-speed engines for the Indian Navy and Coast Guard
with M/s Caterpillar Inc., and a license agreement with M/s Rolls-Royce for the production
and localisation of MTU Series 4000 Marine Engines, enhancing our manufacturing
capabilities at Diesel Engine Plant in Ranchi, are significant efforts that are expected
to bring critical marine propulsion technology to the country. Further, towards nurturing
the spirit of innovation and leveraging our thriving start-up eco system in the country,
the GRSE Innovation Nurturing Scheme (GAINS) was introduced and first edition of this
National open challenge scheme was held in May 23. The participation and support we
received from innovators have been encouraging and two projects (in AI and Robotics) are
currently being funded through this scheme. This exciting engagement with innovators'
community is set to continue and we have already launched the 2nd edition of GAINS
recently.
FUTURE OUTLOOK
Our order book position is healthy, which as of 31 March 24, stood at
22,652 crore. This includes major warship-building contracts for the Indian Navy: the
prestigious P17A project, the Anti-Submarine Shallow Watercraft project, the Survey Vessel
(Large) project, and the Next Generation Offshore Patrol Vessel project. Additionally, we
have secured a 840 crore order from the Ministry of Earth Sciences for an Oceanographic
Research Vessel and have also signed export contracts with the Government of Bangladesh
for 340 crore and a European client for 450 crore.
Our primary focus remains on domestic warship building to meet the
needs of Indian Government and enhance National Defence capabilities. We are eagerly
looking forward to several upcoming bidding opportunities for warship building projects
for Indian Navy and Indian Coast Guard, including an RFP from the Indian Navy for eight
Next-Generation Corvettes. We also anticipate tenders for 5 Next-Generation Survey
Vessels, 2 Multi Purpose Vessels, 21 Water Jet Fast Attack Crafts, 6 NOPVs, 22 IBs and 120
Fast Interceptor Crafts in the coming years.
On the non-defence front, another significant opportunity is the
Geological Survey of India's tender for two Coastal Research Vessels valued at
approximately 500 crore. We are also looking towards getting more orders for green energy
platforms that various state governments like West Bengal and Kerala are likely to
procure. Further, Government of India has prioritised growth of the maritime sector by
introducing a slew of initiatives and policies. Initiatives such as the Sagar Mala
Project, Jal Marg Vikas Project, Harit Sagar and Green Tug Transition Plan are focused on
accelerating growth and they present themselves as opportunities for GRSE. At a Global
level, there is a strong demand from Europe and the Middle East for various types of
vessels including Short Sea Ships, Offshore Support Vessels, Wind Farm Support Vessels,
Product Tankers etc. In the defence sector, current geopolitical scenario, characterised
by regional tensions with impacts at a global level, together with growing need to
safeguard the integrity of international energy and communications infrastructure, is
likely to increase demand for defence vessels. Tapping these emerging opportunities, we
aim to secure more export orders for warships and commercial vessels by forming strategic
alliances with global shipbuilders and defence contractors, helping us leverage joint
expertise and access new markets. We are taking several steps towards expanding
shipbuilding capacity and upgrading infrastructure in preparation to take on the emerging
demand. The shipyard has adopted state-of-art shipbuilding techniques including use of AI,
Virtual Reality and Robotics to enhance efficiency and cut production time. Investments
are planned to develop new facilities and upgrade existing ones, including revitalisation
of a new dry dock and additional assembly workshops. As part our strategy to expand
shipbuilding capacity on the west coast, GRSE has entered into a MoU with a leading
private shipyard for building commercial ships at their shipyards in Bhavnagar and Goa.
Green shipping and greening of ports are key focus areas of the
government of India. Besides building on the expertise gained through execution of the
zero emission NG Ferry project, GRSE is also endeavouring to make forays into design and
construction of hydrogen powered vessels and hybrid tugs. The shipyard is also adopting
renewable energy sources and implementing energy-saving measures towards sustainable
shipyard operations.
Autonomous platforms are finding increasing application in both
commercial and military domains. GRSE has developed the expertise in developing autonomous
vehicles for aerial, surface and subsurface applications in collaboration with industry
partners and is ready to take on the upcoming challenges and opportunities in this domain.
Continued investments are planned for R&D in design of next-generation ships and
advanced maritime technologies including stealth and unmanned/autonomous vessels.
Establishment of an innovation hub to foster collaboration with startups, research
institutions and technology firms in shipbuilding and defence technologies is also on the
anvil.
PEOPLE, DIVERSITY AND TALENT MANAGEMENT
Human resources are our biggest strength, who work diligently to
advance our company's mission, vision and values every day. At GRSE, our people-first
culture and staying invested in training and retaining talent is of paramount priority. We
are embracing agile ways to ensure upskilling and reskilling of people to prepare us for
the challenges of tomorrow.
The passion, dedication, and commitment of our people drives our
progress and we consistently focus on creating a supportive and inclusive work environment
that empowers them to achieve their full potential. GRSE strives to provide a blend of
empowerment, respect and dignity, which intrinsically bolsters diversity and supports
aspirations and ambitions of a heterogeneous team. Women are increasingly taking on
leadership roles and are meticulously included in succession plans. Their development
plans are closely tracked and supported across all levels. We also prioritise inclusivity
by hiring differently-abled and socio-economically disadvantaged individuals. Our efforts
to continuously engage and retain our diverse work force, and to drive a culture of
safety, ethics and performance are key pillars of our strategy.
CREATING TRUST AND VALUE FOR STAKEHOLDERS
As your company navigates complexities of the dynamic shipbuilding
sector, we are focused on creating long-term value for shareholders, customers, employees,
and communities. It is a matter of pride that share prices of your company soared to its
highest in six years, with a value of 22 times over the last issued price. Our market
capitalisation touched an all-time high at 25,000 crore, reflecting the abiding trust and
confidence of our shareholders.
Delivering as per our long-term strategy, rewarding our shareholders
remains a priority for your Company. To this effort, your Company proposes a dividend
distribution of
107.22 crore for FY 24, including a final dividend of 16.50 crore in
addition to the interim dividend of
90.72 crore.
SUSTAINABLE DEVELOPMENT & ESG
We have always believed that in order to generate long term value, we
need to look beyond profits and care for all our stakeholders, including customers,
business partners, shareholders and above all, the planet and society. We firmly believe
that our future growth will depend on our multi-stakeholder model and embedding
sustainability across the value chain is indeed non-negotiable.
Strengthening its commitment to humanity, your Company has touched
beneficiaries through societal interventions, in the area of health, nutrition, education,
sanitation, environment and livelihood.
Your Company takes pride in constantly adopting and maintaining values
and principles, following the standards of corporate governance practices. We remain
committed to uphold the highest standards of governance, transparency and accountability;
the interest of our stakeholders will be safeguarded at every step. The Company has
complied with the Guidelines on Corporate Governance framed by the Department of Public
Enterprises (DPE) and SEBI Listing Regulations except for the appointment of requisite
number of Independent Directors. Your Company has been continuously rated
"Excellent" for its compliances with DPE Guidelines on Corporate Governance.
CONCLUDING REMARKS
Dr APJ Abdul Kalam once said, "Small aim is a crime
have
great aim." Yes, our aim is big, and we shall leave no stone unturned till we achieve
our aim. FY 24 was defined by extraordinary achievements driven by our commitment to
progress and sustainability. The results we delivered and resilience we have displayed in
the face of difficulties prove that we are ready to take on challenges of the future. I
assure you that our Company will not rest on its laurels and will continue to pursue
excellence with a renewed sense of purpose, as we seize the opportunities that lie before
us. I extend my sincere gratitude to the Ministry of Defence, Department of Defence
Production and the Central & State Governments for their vision, support and guidance.
I am also grateful for the trust and unstinted support of Indian Navy, Indian Coast Guard
and the Border Roads Organisation. I also thank the Board of Directors, our employees,
supply chain partners and technology partners for their unwavering support in this voyage
of excellence. I would like to thank you, our shareholders, for continued trust and
confidence in GRSE. I look forward to your unstinted encouragement as we leap ahead with
anticipation and optimism.
Jai Hind |
CMDE PR HARI, IN (RETD.) |
Chairman & Managing Director |