Knowledge Marine & Engineering Works Limited (KMEW) has announced a significant milestone in its commitment to sustainable maritime solutions. The company has been awarded a ₹384.33 crore contract by Visakhapatnam Port Authority for green tug management services, marking its second major order in the state-of-the-art Green Tug segment.

Contract Details

Significance of the Order

This contract win is noteworthy for several reasons:

1. Sustainability Focus: The order aligns with KMEW's commitment to environmentally responsible marine operations and supports India's Green Tug Transition Program (GTTP).

2. Long-Term Revenue Stream: With a 15-year contract duration, this provides KMEW with a stable, long-term revenue source.

3. Technological Advancement: The green tug is designed with advanced battery operating systems and zero-emission technology, positioning KMEW at the forefront of maritime decarbonization efforts in India.

4. Market Position: This second order strengthens KMEW's position in the green maritime transformation sector, demonstrating the company's growing expertise and reliability in this niche.

Strategic Implications

The CEO of KMEW, Mr. Sujay Kewalramani, emphasized the strategic importance of this contract, stating, "Securing the second green-tug order under a long 15-year operating period is a strategic milestone for KMEW and a strong validation of our technology, reliability, and execution capability."

He also highlighted the potential for cost synergies and operational efficiencies, noting, "The construction of Two Green Tugs together will help us in leveraging construction and procurement synergies that directly lower capex costs."

Industry Context

This contract is part of a larger initiative in India's maritime sector. The Green Tug Transition Program, launched as part of the Maritime India Vision 2030, aims to replace diesel-powered harbor tugs with zero-emission alternatives. With an estimated market size of approximately ₹12,000 crore, this program presents significant opportunities for companies like KMEW that are positioned to compete in this evolving sector.

Conclusion

KMEW's latest contract win not only bolsters its order book but also reinforces its position as a key player in India's transition towards greener maritime operations. As the country continues to push for sustainable practices in its ports and shipping industry, KMEW appears well-positioned to capitalize on these opportunities, potentially driving long-term growth and value for its stakeholders.

Investors and industry observers will likely keep a close watch on KMEW's execution of this contract and its future participation in similar green initiatives within the maritime sector.

Knowledge Marine & Engineering Works Limited (KMEW) has reported a mixed set of financial results for the second quarter, with a decline in revenue but maintained profitability.

Financial Performance

The company's consolidated net profit for Q2 stood at 119.00 million rupees, compared to 130.00 million rupees in the same quarter last year, marking a decrease of 8.46%. Revenue from operations declined to 502.00 million rupees from 525.00 million rupees year-over-year, a drop of 4.38%.

KMEW's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased to 200.00 million rupees from 210.00 million rupees in the corresponding quarter of the previous year. The EBITDA margin slightly contracted to 39.81% from 40.08% year-over-year.

Segment Performance

The company's financial results reveal diverse performance across its business segments:

1. Dredging and Ancillary Services: This segment remained the largest contributor to revenue, generating 3,475.59 million rupees in Q2.
2. Ship Building and Repairing: A new addition to the company's portfolio, this segment contributed 1,541.77 million rupees to the quarterly revenue.
3. Geographical Segments: The company's operations in Bahrain and Myanmar (reported under Geographical - Dredging Services) did not contribute to the Q2 revenue.

Balance Sheet Highlights

As of September 30, KMEW reported:

Corporate Actions

The company has announced a stock split, with each existing equity share of face value 10 rupees to be split into two equity shares of face value 5 rupees each. The record date for this corporate action has been set as December 22.

Additionally, KMEW has appointed Mr. Hemant Kumar Sibal as a Non-Executive Director, subject to shareholder approval. Mr. Sibal brings over 50 years of experience in the marine industry, including expertise in handling various maritime emergencies and accidents.

Outlook

While the company has faced some headwinds in terms of revenue and profit growth, the diversification into ship building and repairing, along with the maintained EBITDA margin, suggests resilience in its business model. The stock split may potentially enhance liquidity for shareholders, while the appointment of an experienced director could bring valuable insights to the company's operations.