Knowledge Marine Q4 FY26 Earnings Call — Analysis (NSE: KMEW)

KMEW books FY26 revenue of ₹256 Cr with 38% EBITDA margin; Q4 hit by delayed billing of ₹60 Cr that lifts Q1FY27 outlook; management guides 30% topline growth for next two years.

12 Jun 2026 · Analysis by Alpha Inflection

The take

FY26 Revenue ₹256 Cr ( +27.4% YoY ) . New guidance — FY28 consolidated revenue growth 30% year-on-year . New story: Record order book & multi-year visibility .

Results

FY26 consolidated revenue ₹256 Cr (+27% YoY), EBITDA ₹97 Cr (38% margin), PAT ₹79 Cr (31% margin); Q4FY26 revenue and margin compressed by timing of expenditure on JNPA and Pondicherry dredging contracts where revenues will be recognised only in Q1FY27, depressing quarterly margin to ~27%.

Financial highlights

Guidance

Revenue to grow 30% YoY in FY27 and FY28; blended EBITDA margin to stay at 35–40%; Q1FY27 revenue seen above ₹100 Cr with EBITDA margin >40%.

What management committed to

• We are projecting a revenue increase of 30% year-on-year for the next 2 years [FY27 and FY28]. — 30% year-on-year, FY28
• Our EBITDA margins will continue to remain between 35% to 40%. — 35% to 40%, FY28
• I believe it is going to be more than ₹100 crores, the revenue for Q1 and EBITDA margins should be an improvement than 40%. — more than ₹100 crores revenue and >40% EBITDA margin, Q1FY27
• We are looking to incur and do capex between ₹400 crores to ₹500 crores in the current financial year [FY27]. Close to ₹100 crores is on the shipyard. Balance will be acquisition of dredgers and tugs. — ₹400 to ₹500 crores, FY27
• For the current year [FY27], we believe the shipbuilding mix will be 20% from shipbuilding, 80% from dredging and chartering services. — 20% shipbuilding, 80% dredging/chartering, FY27
• We see utilization in excess of 240 days per year for River Pearl 47 in the next at least 2 to 3 years. — 240 days per year, FY29
• [The two green tugs] will be fully constructed before or somewhere through the mid of the upcoming monsoon in the year 27 [mid-2027]. — mid-2027, Q2FY28
• [Export shipbuilding] orders will start flowing in either Q3 or Q4 of the current financial year [FY27]. — start flowing in, Q4FY27
• The [acquisition of] 2 dredgers, adding about 12,000 cubic meter of hopper capacity, can be implemented as early as less than 90 days, if all the things fall in place. — less than 90 days, Q2FY27
• The [third disputed claim from Mangrol contract] we are hopeful that we shall receive the same in the current financial year [FY27]. — ₹16 crores, FY27
• The pref round that we had done, the capital... is expected to be utilized over a period of 12 to 16 months [from June-2026]. — over a period of 12 to 16 months, Q2FY28

Key themes

Integrated maritime platform scaling shipbuilding and green tugs

How the narrative shifted

• Record order book & multi-year visibility: Management highlights ₹1,400 Cr order book with 15-year Green Tug contracts as foundation for predictable revenue and cash flows.
• Green tug transition program positioning: Securing two green tug contracts is presented as a strategic entry into a high-value, environmentally aligned maritime vertical with long-tenure recurring revenue.
• Shipbuilding backward integration: Developing in-house design, construction and maintenance capabilities via Saphale shipyard is positioned as a margin-accretive, Atmanirbhar Bharat-aligned move that reduces third-party dependency.
• Capex-driven fleet and yard expansion: FY27 capex of ₹400-500 Cr, funded by cash, debt and possible equity, will add dredger capacity and complete the shipyard, setting the stage for step‑change in execution capacity.
• Geopolitical de-risking via domestic pivot: Operations in Bahrain and Myanmar paused due to instability; vessels redeployed in India, with international re-entry contingent on normalisation, evacuations and insurance.
• Mix shift & margin bridge with subsidies: Shipbuilding carries a lower base margin (25-30%) but government subsidies of 10-15% can lift it to 35-40%, sustaining blended margins even as shipbuilding mix rises to 20%.
• Tonnage tax shield on core operations: 80% of revenue (dredging/chartering) is expected to remain under the tonnage tax regime, keeping the effective tax rate near zero and boosting post‑tax cash flows.

Operational commentary

• Built and deployed River Pearl 47, India’s largest self-propelled backhoe dredger, for rock dredging at JNPA; contract executed with underwater control drilling and blasting.
• Secured two Green Tug contracts from V.O.C. Port and Vishakhapatnam Port worth ₹650 Cr over 15 years, marking entry into sustainable maritime vertical aligned with India’s Green Tug Transition Program.
• Order book of ~₹1,400 Cr provides multi-year revenue visibility; green tug portion stretches to 15 years, remainder executable in 2–3 years.
• Acquired 15-acre land in Saphale near upcoming Vadhvan Port to develop state-of-the-art shipyard; shipbuilding subsidiary executing IWAI orders for cutter suction dredgers and ancillary craft.
• River Pearl 47 expected utilisation >240 days/year over next 2–3 years, with active tenders across five major ports (New Mangalore, Mumbai, JNPA, Vishakhapatnam, Tuticorin).
• Bid pipeline of ₹2,000 Cr purely domestic orders; dredging ₹950 Cr, shipbuilding ₹400 Cr, green tugs ₹600 Cr.
• Capex pipeline includes acquisition of 2 dredgers adding 12,000 cum hopper capacity, deployable in <90 days; shipyard development to take at least one year.
• Overseas operations paused: Bahrain vessel redeployed in India, Myanmar vessel gainfully deployed at Port of Ghogha, Gujarat; resumption only after regional stability and proper insurance/evacuation plans.

Analyst Q&A

• Q. Why did Q4 revenue and margin fall sharply, and what is the quantum of revenue spillover to Q1?

  JNPA and Pondicherry contracts have single-stage payment at 100% completion; most expenditure was booked in Q4 but revenue will be recognised in Q1FY27. Approximately ₹60 Cr of revenue will flow into Q1, and if expenditures on these projects are excluded, Q4 EBITDA margin would be above 40%.

• Q. Earlier guidance suggested debtor days would be brought to 45–60 days by FY26-end — why are they still elevated?

  The large outstanding is a ₹16 Cr claim from the Mangrol contract, which is a one-off claim and not regular billing. Regular billing debtor days are within range.

• Q. What is the quarterly new normal for revenue, given earlier indications of ₹90 Cr+ run-rate?

  Guidance was on revenue growth, not quarterly sustainability. Q1 and Q2 are typically lower due to monsoons; Q3 and Q4 are higher. The management prefers to give annual guidance.

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