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Good afternoon, everyone. I'm Gaurav Girdhar from Concept Investor Relations. I welcome you all to the Analyst Meet of Garden Reach Shipbuilders & Engineers Limited to discuss its Q3 and 9-month FY '25 results. I have with us today Commodore P. R. Hari, Indian Navy Retired, Chairman and Managing Director; Mr. R.K. Dash, Director of Finance and Chief Financial Officer; and Sri Sandeep Mahapatra, Company Secretary and Compliance Officer. Please note, this conference is being recorded. Sir, over to you.
Thank you. And good evening to each one of you. I actually look forward to this particular meeting. So this is the only time when I -- when we see each other. Though we interact over the con calls every quarter but to be frank, I enjoy this particular.
Coming to the formalities, I welcome each one of you to this conference to discuss our financial performance for the quarter ending and 9 months ending 31st December '24, and also to provide you a way forward way ahead. I'm sure most of you have been tracking the programs of the company and you are clear about where we are. And I'll give you an overview as to what we are doing and give a glimpse of what light is in store for us.
Like I normally do a the financial performance, then cover the current order book, provide you the status of the ongoing projects and then give you a glimpse of what are the projects on the anvil and also highlight what we are looking for in the future.
Coming to the financial performance, I think this is the tenth quarter on a trot that both topline and the bottom have gone up. Our revenue from operations registered a 38% growth over the last corresponding quarter from INR 923 to INR 1,271 crores. The PAT has gone up by 11% from INR 88 crores to INR 98 crores and operating profit has gone up from INR 37 crores to INR 62 crores. Operating profit margin has gone up from 4.03 percentage to 4.85. Earnings per share, again, showing a rise from INR 7.70 to INR 8.57.
Now coming to what has translated to the financial performance is, of course, our physical performance. Before covering that, I'll give you a glimpse of the order book. Our current order book stands at current as on 31st December stands at INR 23,877 crore and this is comprise of 40 platforms from 10 projects. These projects are as you're aware, the 3 P-17 Alpha, having 17 warships, [indiscernible] maybe coming from 4 projects, 3 P-17 Alpha, 2 survey vessels large, 2 we already delivered, 2 more are remaining so 2 survey vessels large, 8 anti-submarine shallow water crafts, and 4 new generation oceangoing petrol vessels.
In addition to this, we are also executing a project each for the Ministry of World Sciences and Oceangeographic research vessel and also an acoustic research vessel for the DRDO organizations. We also signed a contract for 6 multipurpose vessels with a German client. And we also 2 more export orders for friendly foreign nations. Happy to inform you that we have won an order for 13 hybrid ferries from the government of West Bengal. It's a World Bank funded projects.
This in a nutshell gives you what are the orders that we currently have in [ RCT ]. What we are looking for in the immediate future, the assured orders. our agreement with our German client was for 8-ship multipurpose vessel projects. We had deliberately staggered the contract sailing. 6 contract for 6 ships have been already signed, and we will be signing the contract for the balance 2 ships by 31st of March.
In addition, we have been declared L1 for another set of research vessels. for the geological survey of India, 2 coastal research vessels. We expect the contract negotiations are currently in progress. We expect the contract to be signed by 31st March. That is our expectation.
I have been talking about this next-generation corvette project for a long time. I think ever since I started attending these interactions, I've been talking about this project. Yes, the RFP has been issued. The bids have been submitted. 4 shipyards have taken part in the bid. The technical evaluation has been completed, and we expect the price bid to be opened in a couple of months. And let us hope together hope we become the L1 shipyard because a high-value order, and that is something which we are eagerly looking forward to. This is what is immediately on the anvil.
And as far as the future -- near future is concerned, Navy also has taken an approval of necessity from the Defense Acquisition Council for 7 P-17 Bravo ships. There's a follow-on of the P7 Alpha that we and MDL are currently executing. This is a 7-ship project, 3 shipyards in the freight. 2 of them will get it. So the probability is very high. And also, Navy has taken an AON for 31 waterjet FACs, waterjet -- they are called follow-on waterjet FACs. These are small 50-meter-odd vessels, 31 of them. The volume is huge. And Navy has also got an AON for 120 fast interceptor crafts.
In addition to that, Coast Guard has obtained the ON for -- already obtained O' DAC AON for 5 -- sorry, 6 OPVs, NOPVs and 18 fast patrol vessels, next -- new generation fast patrol vessels. These are broadly what is likely to come out from both the Navy and the Coast Guard in the next 1 year. Some of the RFPs could come out as early as a month down the line. Two projects that I missed, Navy has also taken AON for 2 multipurpose vessels and 5 next-generation survey vessels. This is what I expect to come out from now till the next 1 year. The RFPs that are expected in the next 1 year.
Now I'll give you a glimpse of the status of the ongoing projects. As I had mentioned, we are executing 10 projects. I'll start with the naval projects, the P7 and Alpha project. Again, happy to inform you that our first ship has already undergone the basin trials. Basin trials is the harbor trials have been successfully completed. We intend putting the ship to sea for the sea trials by end of this month.
So the project is going on track. And there was a question which was asked, I think, last time or last time, is the project going on track? Will you be able to deliver the ship on time? Yes, we'll be able to deliver the ship ahead of the contracted time, which is the first ship is to be delivered by August this year, the second ship by February next year and the third ship by August 2026. So we will be able to complete this project on scale. This is a high-value project. And just to give you an updated status, we have almost touched 90% progress on the first ship. Almost 65% on the second ship and about 50% on the third ship. So that is the kind of progress that we have achieved.
Coming to the survey vessel large project. This is a 4-ship project for the Indian Navy. 2 ships have been already delivered and they have been commissioned into the Navy. Two more ships we intend delivering during this calendar year, which means the third ship, we expect to be delivering by June and the fourth ship by July, August. So that is the way the progress is currently there. The second ship has almost touched around 85% the physical progress and the third ship is around 72%.
Coming to the ASW Shallow Water Craft project. Actually, this is a 16-ship project, 8 being undertaken by GRC and 8 by the Cochin Shipyard. Happy to inform you that the contract was signed on the same day. Both the shipyards signed the contract on the same day. My first ship has already undergone full power trials, and it is ready for delivery. We are confident of delivering this vessel by March 15, 15th of March this year.
The second and third ships are following very closely, and we intend completing this project also on schedule. Our contracted delivery time line is by October 26. So all the 8 ships, we are on track, we'll be able to deliver by October '26. The fourth project that we are doing for the Indian Navy is new generation offshore petrol vessels. This is a 4-ship project on track. The first 2 ships, we almost touched 40% progress. We intend launching these ships during the calendar year. This project -- naturally, the project was signed only in 2023, March 30. So the project delivery time lines stretch up to 2028, '29, the last of the ships, on track as of now.
Now coming to the other projects that we are doing, the multipurpose vessels, we then starting the -- that's the commercial platform for the German client, we then starting the production. Design activities are currently in progress. We intend commencing production by July this year. Project is on track. Being commercial vessels, we just cannot afford to slip on the dates. So that project is on track.
The oceanographic research vessel, the production has already commenced, and we intend doing the first milestone activity that is a key laying of the vessel by July this year, on track. The acoustic research vessel, proprietary activities are in progress. The contract has been concluded, currently well on schedule. And so is the project that we are executing for the government of West Bengal 13 hybrid ferries.
Last time when we met, I had mentioned 4 things or 4 or 5 things, if my memory is right. One is that next time, there is today, when we meet, I should be able to give you the happy news that we were expecting at that point of time regarding the commercial vessels. I met my commitment. GRSE is currently in a state where multiple foreign customers are approaching us.
We are taking a balanced call as to which are the projects we should take on, what we should hold in event. So we are good with the commercial shipbuilding. Revenue, we had given a growth perspective. We are maintaining that rather exceeding what I had committed last time. Third was on the ship repair, which is a very small vertical that we had started. We started in a very modest fashion.
So today, I can proudly say that the ship repair vertical has gained its feet. And the facility that we have set up for the ship repair is fully loaded. We are executing orders, including export orders on ship repairs from friendly foreign nations as well as from Navy and Coast Guard. So that ship repair vertical has stabilized. Right now, again, in our overall scheme of things, the revenue generated from ship repair is very, very modest, but we expect substantial growth in the next 3 to 5 years.
And again, happy to inform you, you're already aware that the company has been upgraded into a recategorized into a Schedule A company during the last financial year on September 17, if my memory is right, we were upgraded into a Schedule A company, which is a recognition that we have been relentlessly pursuing for the last 5 to 7 years. It's your credit. And of course, the NGC tender, last time when we discussed, it was still in liquid form. Deliberations were still in progress with the Navy. The tender is out. As I mentioned, we expect the bid to be opened in a couple of months. My conservative estimate is by April, the bid would be opened.
And again, happy to inform you that we have a memorandum of understanding with the Ministry of Defense with the government. We are a government-owned company, mostly 75% -- 74% of the shares are with the government. So we have to sign a memorandum of understanding. And based on the performance parameters, the company is assessed. And on at for 2 years, including '23, '24, we have been rated excellent. That's the highest rating. And out of -- in a score of 100, we have attained 96.5 -- there even you have a major contribution because the market response is one of the evaluation criteria.
So thank you. So I think I've covered most of the aspects that we are -- I got to say. So I thought I'll just restrict my introductory address to the minimum. So I'm open for any questions as you deem fit. Please -- can you -- can someone hand over a mic, please? Normally, there's a strategy like in a con call, which is 1 hour, I always look at the clock. Now I'm saying always clock 20 minutes, 25 minutes, then the number of questions become less. You have only 35 minutes. But today, no such, yes.
Yes. Again, thank you, sir, for your stewardship and excellent set of numbers. We are very happy shareholders here. So I want to ask you a couple of questions. So first in the budget, there was a lot of talk about moving along that and shipping a INR 25,000 crore fund. Could you give us some color on how that would help us? And b, you mentioned a lot of orders that possibly could be opened this year. Can you quantify the expected value, whether we get it or the expected value of that order for us?
Thank you. I'll start with the orders, which are on the annual. The next-generation Corvette, the AON was taken for INR 36,000 crores, which means the L1 shipyard purely by the calculation should get around INR 22,000 crores. But my assessment is that it could be well beyond that, which means it could be between INR 25,000 crores to INR 3,000 crores for the 1 shipyard. L2 shipyard will get from to around INR 1500 crores, INR 1,00 crores. This is for the next-generation Corvette project.
Now I'd also mentioned that the P-17 Bravo AON has been recorded. The total value for which the AN has taken is around INR 70,000 crores -- it is -- which means each ship would be around INR 10,000 crores. So the L1 shipyard would get 4 ships and the L2 shipyard would get 3 ships. Here, I'd like to add on that I had mentioned that 3 shipyards and 2 will get it. So the probability factor is high. And our confidence is that having built the P-17 and since we do not expect any major design changes over 17 Alpha to 17 Bravo, so we will be bidding with that kind of confidence and reasonable aggression. Coming to the other projects, the 18 follow-on or rather NG.
Nowadays, every project, you will see that NG, so that is a FA dam, next generation, new generation, so be it so. So it's an 18-ship project, NG FPV project. The order value -- it is -- as of now, it is likely to go to a single shipyard. So the conditions of the financial qualificationility criteria are going to be stringent. Some shipyard who has got the capability, naturally we will be there and maybe around 4 more shipyards would be there. So here, the order value is likely to the tune of around INR 3,000 crores. Then there is a 5-ship survey vessel, NG Survey SVL, survey vessel large project, NGSE, next-generation survey vessel project for the Indian Navy. There's a 5-ship project. We expect the order value to be around INR 3,500 crores.
Again, this will go to a single shipyard. A 31 waterjet FAC project, -- this is a relatively low-value project. We do not expect the cost of a waterjet AC ship even with the NG factor to go beyond INR 100 crores to INR 120 crores. This again could be to the tune of around INR 3,500 crores. Then comes the 120 fast interceptor craft around INR 2,500 crores. Have -- okay. Then 2 multipurpose vessels for the Navy. The project is -- 2 ships are currently being constructed by Las Turo shipyard at Kattupalli. Navy has now come up with an RFP -- will be coming out with an RFP for 2 more ships. This could be to the tune of INR 1,200 crores to INR 1,400 crores. This, in a nutshell, gives the overall projects that are on the, if I miss something, maybe if a subsequent question comes, I can answer. Yes, please.
Obviously, the first 2 are the most lucrative the ones you mentioned. Between them, how much? INR 1 lakh crores or something? Can you tell us the status of this? Do you think it would be L1, L2, -- what do you think -- what is your hypothesis working hypothesis of those projects?
See, in the NGC project, we are confident. Why we are confident is purely because I had mentioned this earlier that as far as corvettes are concerned, we have mastered the construction of corvettes. 9 Corvettes, both missile surface as well as ASW are currently running in the Navy and all 9 are built by GRS, that's the kind of expertise. So here, I mentioned that it's around INR 36,000 crores. L1 will get around INR 25,000 to INR 30,000. This is the first project that is on hand.
And this should open when, sir? When do you expect to happen?
Conservative estimate is 3 months, optimistic, 2 months. That means as early as March end to April. That's something very close.
That's very close. Okay. And the other one? The Bravo?
P-17 Bravo, we expect the RFP to come out only by year-end because the AON was recorded, I think, just about a couple of months back. So we expect the RFP to come out, okay, again, put a moderate timing by end of the current calendar year. So if it comes by end of the calendar year, the L1 determination, you put an inefficient time of 6 months from bid opening to my past experience, which means by mid of calendar year '26, the L1 L2 shipyards will be known. Here, the L1 shipyard as per the AON taken, will get around INR 40,000 crores and the L2 shipyard will get INR 30,000 crores.
And you are confident of that?
Definitely, we are confident. See, it is 3 shipyards only, 2 will get it. So we should get it.
Yes. And just to follow up, sir, on the first order that you mentioned, INR 36,000 crore order, which you get INR 24,000 crores. That also you said is your strength, right, the basic corridor?
I'll tell you why. One, I mentioned the experience, okay, experience, maybe somebody is undergo, still. We'll just utilize -- there are only 4 shipyards who are eligible for this. Only 4 have been permitted to bid for this. Of that, 2 will get it. So it...
And also, if that happens, then your order book doubles basically. It will double.
Right now, my order book is -- naturally, it is depleting because we are executing. Last year, I think when we started the financial year, it was around INR 22,600 crores. Now it has just gone to INR 23,877 crores despite getting multiple orders during the current year. So we are depleting an order book, but no fire. We will get a couple of orders in the coming year.
Yes. Great -- also can you speak on the budget, what your impression is, sir?
It's a very interesting budget with respect to shipbuilding because the Maritime Development Fund, they have allotted INR 25,000 crores. They kept a corpus of INR 25,000 crores. What the government is planning is to provide assistance in terms of either equity or debt with 49% investment from the government. And the industry should invest the balance 51%. This could be for pure shipbuilding projects or creation of shipbuilding infrastructure. This is an interesting aspect that came out of the budget. And also, government has already -- the action has commenced.
Most of the coastal states have come out with RFIs for EOIs for creation of shipbuilding clusters. For example, Gujarat, Karnataka, Maharashtra, I'm not so sure. Gujarat, Karnataka, Andhra, Orissa and Tamil Nadu. So shipbuilding clusters are planned to be created in these states. The benefit for us or all of us would be the assistance from the maritime development front that the government has earmarked.
Third is the Shipbuilding Financial assistance version 2. The Shipbuilding Financial assistance policy was always in existence. Of course, it is not applicable for warships. But since we have ventured into commercial shipbuilding and in a strong way, this will definitely benefit us because the subsidy that is being allotted by the government. Basically, their intent is very clear that they want to boost the shipbuilding industry in India. So that will definitely give a fillip to the commercial shipbuilding. These are the major aspects that I can pick from the budget.
One more thing is a very interesting thing. I think I mentioned in passing last time in our con call was that the government has come out with something on recycling that is ship breaking. If you break a ship in India, then you get 40% of scrap value as credit. You can avail the credit as an assistant, direct assistance from the government if you build a ship in India. It is a very enticing offer. So I think on the whole, with respect to commercial shipbuilding, the budget has been very, very encouraging. More is there, but that's fine.
I think that -- but that helps more commercial doesn't really help us.
No, no, it helps us. Why it is helping us is -- see, when we met last time, I was a bit hesitant. I would not say hesitant. I was just -- we were just contemplating, should we go in for commercial shipbuilding or not, we have taken this, we have gone ahead. So since we have gone ahead, we would like to go in a big way. So if you are going in a big way, all these things initiatives will help.
So just a quick follow-up, on the 2 new contracts that we're talking about, are they on a cost-plus basis? Or are they on a comparative basis? I mean that mechanic work? The 2 new contracts that we're talking about?
Okay. The NGC and -- it's a hybrid. There's a fixed element for the effort. There's a valuation by the shipyard and certainly, equipment, it is on cost plus basis. It is not -- we term it as fixed cost and variable cost. So it is going to be a healthy mix of both.
Which will be what? 7%, 8%? The margins for that would be?
Margins should be plus 8%.
Sir, can you speak more about the export potentiality? I think the next 5 years or next 10 years will be for exports. So how we are prepared for the export potentiality? For shipbuilding as you just now told, what can be the -- roughly where we can stand in the next 5 years?
Thank you, sir. Right now, as on date, we -- just about 4% of GRSE's order book is coming from exports. Our total order book is INR 23,877 crores and just about INR 970-odd crores is coming from exports. So -- but since -- as I mentioned, it was a very -- I mean, we are pulsing the system. But with the kind of offers that are coming, rather queries that are coming, we are taking a calibrated approach. We have gone ahead and invested in revitalizing one of our facilities. So on a -- I know that you are looking for figures. So I mean you always -- I'll say on a conservative basis, we'll be looking at a twofold increase within 1 year and at least a fourfold increase from the current value in the next 4 years. So I'm just giving a band. You mean fourfold on the amount of exports that was done currently. That should increase.
And sir, regarding these budget proposals, so how does exactly it work? Let's say, the government has proposed building clusters in some of these states. So how exactly would it work for a company like GRSE? What can you do exactly? Would you be owning the cluster or having one of the facilities and somebody else also will be having facilities?
I'll try and answer in this fashion, sir. Right now, I'm speaking from GRSE's perspective. I'll build a background and then answer your specific question. Right now, we have got 3 fully usable shipyard in Kolkata, GRCS, plus we have hired some facility. All put together, our shipbuilding capacity last year when we met last year, it was 20 ships. We have increased to 24 ships already. What we have by end of this year, that means the end of the calendar year '25, we'll be increasing to 28 ships, but that 28 is also grossly inadequate to meet the requirements and that's why I said some of the offers we are not able to take up.
So there is the need to expand beyond Kolkata. And naturally, Kolkata has got an inherent limitation of draft. So we have -- whenever we do construction, we match the tide and do the construction float. So we want to come out of that once for all. It is with that intent that we'll be looking at facility outside Kolkata. I am not in a position at this moment to say when, but that the ball has already been set truly. Now the states which have shown interest in creation of shipbuilding clusters are what I mentioned, Gujarat, Maharashtra, Karnataka, Tamil Nadu, Andhra and Orissa because these -- all of them have got adequate depth -- I mean the draft adequate depth is available. Now when you say a shipbuilding cluster, it will definitely have the shipyard as the core of the cluster with the ancillary industry.
Ancillary industry could be a manufacturing industry, which supplies items for the -- then the logistic arrangement, there has to be a transportation. So the cluster contains multiple facilities with the shipyard as a core of it. There would always be -- there could always be a port also co-located. This would in a nutshell mean water clusters. Now within the cluster, what is that the government is going to offer and what is it's going to come from the shipbuilding, what is the maritime development fund. Like, for example, one of the RFIs, EOIs, which one of the states had come out, they provide -- they are ready to invest and provide a breakwater.
Breakwater means it's a structure, maybe a kilometer long, which will protect the sea from coming inside, which means what is within that break water is usable for ship construction. They are ready to create jetties, building burs where the ships can be located. The shipyards would then need to invest in creation of dry docks and building births. That will be the investment from our side. Some of them have already offered a 10-year rent-free period or rent at very nominal rate. This coupled with debts that the government may give. It's a win-win for everybody. That is what we are looking for. So I think -- hopefully I've answered your question to some extent.
Yes, of course. Sir, I want to ask you about the ship repairs. You have been speaking in your conference calls. So how exactly do you plan to grow that part of the business, especially now with this closing -- better relationship with America and other countries, probably that might open up a very big revenue stream for the Indian repairs companies. So how exactly would GRSE plan to position itself on that end? Do you see something in the near term a thing or maybe it will take a very long time?
Okay. So I'll put it this way. We were not into ship repairs. Just about this is 2025. Just about 4 years back, we started the process. We took 3 dry docks on a long-term lease basis from our friends in Kolkata Port Trust, SMPK. We have taken over that. That is a facility which we have created dedicated for ship repairs. But when we started getting orders, we found that itself is not adequate for us. Both the Navy -- see, Navy has got dedicated ship repair units across the coast, naval dockyard sense. But still with the kind of ships that are coming up for refit and repair, they're not able to handle the load. So a few orders have come from Navy. Coast Guard do not have any dedicated repair organization. So 100% of the Coast Guard orders will go to one of us, us Cochin Shipyard, L&T and some of the private players.
Now the demand is very high, but the capacity is limited. Now we have now taken over the contract is not -- agreement is not yet signed. One more dry dock, which is unused with the Kolkata Fortress, we have taken over from them. So this will augment our capacity. And the revenue what we are generating from ship repair, we are actually hesitant to take more orders at this juncture because of the capacity constraints. In a year or so, we'll be able to double the revenue that we are getting from ship repairs. This is one. But that also will not address the issue because if we are limiting our ship repair to Kolkata, it just will not meet our requirements.
So what we have done is we have formed partnership with small ship very, very small shipyards whom we use that as our subcontractors, take the order at a reasonably -- ship repair is a high margin. And we intend doing the refits that we already executed one in somewhere near Jamnagar. We had a collaboration with one of the private shipyards. We got the job done. We did the project management. We got a good margin out of that. So we -- in addition to creating our own facility within Kolkata, we'll be having a structure wherein we partner capable small shipyards, do the project management, ensure quality and get good margins. Bottom line, the crux of it is that we intend almost doubling our ship repair revenue in 1 year.
Sir, the U.S. Naval that their fleet of 100 ships and all they wanted to empanel a number of Indian companies to do their repairs. Have they visited GRSE? If not, why not?
I'll answer this question because be it MDL is at the sees next to them, be it Goa sees next to them. L&T sees next to them. HSL sees next to them. We are a riverine shipyard. And this is one part. So we are not comfortable to go in for -- I'm not getting the MLRA or MSRA or something with the U.S. as of now. At this juncture, we are not in a position to go for that. Second is, let us say, we hire a facility, we collaborate with one of these counterparts there. So far, this agreement has been signed nearly 3 or 4 years back. How many ships have come? -- hardly anything. We can count 1, 2, 3 in the last 4 years. At this moment, we are having a wait-and-watch policy for the U.S. or any other freight.
Last question from my side -- we have been announcing from time to time some alliances for some global companies, for instance, the marine engine production and all that. So is there any potential in terms of actual revenue terms and how it will unfold going forward, sir? And which of these alliances you see likely to materialize now?
Okay, sir. I'll give a perspective that when we sign MOUs, MOUs like sowing wild outs. It's like we do business development. We attack 100 leads. If even 2 leads fructify, it is success. Similarly, in case of MOUs, we have had -- we have live MOUs with Rolls-Royce for MTU Rolls-Royce for marine diesel engines. We had one with Caterpillar and we had one with Kongsberg. I'm only speaking about engine and water jets. Of these 3, one has matured, it is a Rolls-Royce MTU and Rolls-Royce MTU MOU.
And when I had mentioned earlier about this 31 waterjet FAC or the 18 fast patrol vessels, it is those type of engines that are going to get into these ships, which means let's hypothetically say this collaboration succeeds and it is 31 into 63 engines in these ships and 18 into 2, 36 engines in the Coast Guard project. So opportunities are there.
We were earlier having an MOU. MOU was initially for assembly, testing and so on. So we get knockdown kits from there. We have a diesel engine plant in Ranchi.
We used to button up the engine, conduct trial, we have a touch pad there and then deliver. We have just transformed that into co-production because we found that is not attractive. validation is nothing. So -- but now we have gone for an agreement. It's called a license agreement for co-production where as per the government policy, at least 50% indigenous content should be there for every project. So many of these foreign OEMs who are supplying 100% automatically get knocked out. So we are leveraging that government policy to get into this 31 waters [indiscernible] as and when it comes.
As a matter of fact, I've just come back from Bangalore. I was in Bangalore for the Aero. We had a closed door meeting with Rolls-Royce to further this project. Now you may also have noticed that GRSE has signed since you asked about MOUs with several partners. Like I'll give you one example. We have a collaboration with [ Elbit ] Israel and their joint venture partner in India for manufacture of naval surface guns, very attractive project. Our role in that is certain components manufacturing, project management, installation, but the margins are good. So we decided to go in for that.
So that was an MOU, which started off as an MOU, which translated into an order.
We recently signed an MOU with a firm called Apollo Microsystems. It's a listed company, very, very good company. We had an interaction with them. We understood their business. We got into an MOU with them for mode mines, which Navy requires in large numbers. So it has not seen -- it has not been translated into an order at this juncture, but opportunities exist. So like I said, the MOUs out of 10, if 25, it is success.
Sir, we have 3 companies. One is Cochin and one is [indiscernible] and one is [ Garden ]. So how is cost to get an employee and workers compared to -- is it Kolkata is cheaper compared to Goa or the Mumbai or this Cochin shipyard?
See, I've been in Kolkata for the last -- my ninth year running in Kolkata. Before joining, I mean, I quit from a naval unit in Cochin Shipyard, the IAC project. I was heading the aircraft carrier project in Kochinhipy. So I know the work culture and the employees there. And in Maag, I was a part from the Navy side for commissioning a P17 Shriivali class ship. So I know all the 3 shipyards well with GRSE naturally being my home.
So if you look -- to answer your question about cost of labor, it is almost same at all the 3 places. It is almost same at -- because, see, as a policy, none of us -- none of the 3 shipyards or none of the 5 or 6 big shipyards, we are not taking too many permanent employees. The strategy by all of us is outsourced work, and we do project management, core expertise in design, we retain some of the block fabrication or specialist jobs we retain. But most of the labor is through contracted workforce. The contracted workforce rates are same because we all pay central wages, central government wages, minimum wages to central government. So I feel it is at par. Each shipyard has got its own environmental issues that you discount that, but otherwise, the cost of labor is more or less same.
Are we looking at -- since we are expanding at [ Vizag ] shipping for some shipyard or something like that to acquire and expand?
The expansion is not because of the cost of labor. Expansion is purely because, one, we are stretched to our scams in Kolkata because we have got limited land. That we have done to our best capability, expanded it, revitalized it. Now if we take more facility in Kolkata, the disadvantage is that it's a riverine shipyard. The limitations with respect to depth will still remain, heavy filtration. So we are good with what we have in Kolkata. But if you really want to expand to a global shipyard where we can construct vessels of, let us say, 300 meters length commercial vessels, then you need areas with -- it is with that intent, we are likely to go out. Maybe still a liquid form. Discussions only are in stage at this stage. Maybe next year, when we meet, maybe I'll be able to give you some good news on that.
And last question from my side. Sir, you just told about the export market. Could we expect by end of next year around 15% order book to be from export market?
No. I'll answer in this question in this fashion. I'll try and answer in this fashion. See, you take a 10,000-tonne commercial ship and you take a 300-tonne warship. The cost of the warship is more than the commercial ship because in every ship, it is the equipment and weapon and sensors that carry value -- the order value. So 50% it is -- we are not even looking at it because see, you must also appreciate that we have been set up. We are a company that has been set up with an intent for the maritime requirements of the nation. And there is enough what I just mentioned.
I just mentioned 4 or 5 or 6 projects of Navy and Coast Guard that are going to come. There is enough number of orders are going to come in the near future for all. But we are not happy only with that. So that is the reason why we are going for export, one for global recognition. Second, after we put our feet firmly on ground, the margins are going to be good. So I expect right now, I just mentioned that the order book position, the contribution of commercial export orders is just about 4%. Maybe it could go to 10%, but not the level what you're looking for. We're not looking at that because of this reason I mentioned.
Ramesh [indiscernible]. Sir, before you came, there was an audio video presentation. That film was excellent. It took us back to 1884 to today. The progress of your company and the progress of maritime and ship building, in particular, Navy and the Coast Guard. So that was wonderful. We came a little early, so I had a chance of seeing in 2, 3 times. Now the thought which came to me, I was in another conference where there was -- I think the commissioners from the government of Nepal or the high commissioner head of Nepal -- sorry, Vietnam.
He mentioned Vietnam has a coastline of 3,000 kilometers. India is a first line of 7,500 kilometers. And we need to have extremely accurate coastguard as well as naval ships, which are monitoring and which are seeing that there is no room or no weak or a week portion foreign access to anybody. So the thought which was coming to my mind was, sir, have we developed adequately strong health facility for our ships about the sea and in the submarine? I mean you have the liberty of not answering it to full, but just the idea.
I'll try and answer in this fashion. The role of coast protection is that of the Coast Guard. That's why they called the Coast Guard. And the role of Navy is beyond a certain it is outwards. With that background, Coast Guard, the government has really realized the need for augmenting the capacity and capability of Coast Guard. Just to put things in the perspective as making notes, so somewhere I turned out that Coast Guard budget for capital acquisition, they have increased, I think, by 26% or something in this year. That's why they're coming up with several RFPs.
As far as technology is concerned, there is -- there are multiple agencies handling the security of the coast. One is, of course, Indian Coast Guard, then there is something called merit. Each state is also involved. So to answer your question, yes, -- there is room for improvement. But I think Indian coast is adequately protected. And just also to put the facts on the right perspective, it was 7,516 kilometers. But after a recent survey, you can check it up, you can Google it, it is around 11,000 kilometers. So that is the kind of coast with all our...
Our job has virtually doubled. Sir, that was the one thought which I thought I will share with you. The second thought was your opening expression of the performance of Q3 and 9 months. What I heard correctly, the top line, I believe it is third quarter was INR 1,271 crores. And the PAT was INR 98 crores, which was 4% Yes. But I didn't get the EBITDA figure because you rattled it very fast.
I deliberately rattled very fast. I just skip over that and go now. Okay. See, our revenue from operations was INR 1,271 crores as...
Third quarter?
Yes. Third quarter. And the PAT was INR 98 crores and the EBITDA was INR 147 crores.
And for the 9 months, we can multiply this with 3?
No. I'll give the figures of 9 months. In 9 months, revenue from operations was INR 3,434 crores, and the EBITDA was INR 421 crores and the PAT was INR 283 crores.
Yes. So virtually, it comes into 3. And going by this, we will end this year almost close to INR 5,000 crores, a little less? Please don't comment. One point which you mentioned further was, okay, we are registering a 38% CAGR. Will this 38% CAGR be maintained going forward, not only in the next year as I see in the next 5 years?
Okay. I think I'll answer this question clearly. See, our current order book, of course, is INR 23,000-odd crores, which hopefully will come down to around INR 22,000 crores something by end of this financial year unless we get some fresh orders. And this is going to last, including the new projects that we have signed up to 2029. The big projects, that is a P70 Alpha touch wood, we should be able to finish by mid of next year. So the maximum revenue accrual will happen from this project. I had mentioned, see, this 38% CAGR, 38%, perhaps is not there. But we'll be able to maintain a CAGR between 20% to 25% over a 5-year period. I think that gives you a clear answer.
Perfect. This is absolutely accurate. The one last point is, sir, where you see a possibility, definite possibility of ramping up the EBITDA and the PAT margin?
See, it depends upon the projects that we are getting, project execution cycle. If the P17 Alpha project, our margins are good. Suppose some of the projects which we have taken at very, very low margins because we need to get orders unless we have orders, we will not be able to perform. So it's a mix. It's a mix. In this -- I think I'll preempt the question and answer. Our operating profit has really gone up.
But our PAT margin -- EBITDA margin has come down when you compare to the last business there's a drop in that. But it's like a sign wave. I have been consistent in my views on this that we'll be able to maintain PAT margin above 8%. This time, we have dropped in this particular quarter at is 7-point something. But on the whole, by the end of the financial year, we'll be able to correct that.
But again, I'll clarify because I know otherwise, I can just more questions in one instead of piecemeal questions coming. If we get the [ COVID ] project, if we get the P-17 Bravo project, naturally, the margins are going to be higher than that.
Sir, what I see from your body language, of course, you -- until you get the order, you cannot say it is in hand, but I'm very sure that these orders are with you. And going forward, because the priorities of...
I just stated the probability factor, simple mathematics is 4, 2, 3, 2 plus confidence. So it's all put together, you can expect.
[indiscernible]. So just one thing. So let's say, we have 3 major shipbuilding companies, okay? We -- the promoter is the same. So now are we getting or taking market share from them? Is there any competition among us? Or it's like sister companies like we are just working in parallel with each other, and there's no Pip in market share for any of the players. That's one. So how are we differentiating ourselves from the rest? And what better things can we do going forward? And what are the challenges that could come, let's say, 22%, 25% CAGR, what you have guided? So are there any challenges or we are quite comfortable that could be maintained?
A very interesting question. There was a time when the market share was alloted. That is the era of nomination. There was a time before -- much before we got listed when we were all in a comfort zone, which means the orders were assured, cost plus orders, that situation has completely changed. Luckily, it changed before we came to the market. By the time the orders became either hybrid, that is what I mentioned about fixed cost or variable or pure fixed cost contracts. Second thing is the government, except for very specialized projects like the submarine order, which has gone to Maag Docks very recently, very specialized project or the IAC, which went to Cochin Shipyard about 14 years back. All other orders are coming through competition.
So the market share depends upon the efficiency of the organization and the build strategy and the bid strategy that they adopt. Now what in any shipbuilding industry, you need, one is you should have the dock and birth infrastructure. That is a primary requirement for shipbuilding, the dock that is a dry dock where you construct the ship and the building berth and the jetties where we park the ships for outfitting. Second is the infrastructure, that's the craneage and associated with that in today's environment, all the shipyards, major shipyards of the country, they have reasonably adequate. Of course, the demand is currently more than the capacity, but that will even out.
The third is the resources, the skilled manpower. As a strategy, all the shipyards are adopting to outsourcing for noncore jobs. But the skilled manpower available in the country the whole of specialist shipbuilders is limited. Whoever offers the highest pay will come and work there. So there is -- since you asked what are the challenges. One is availability of skilled resources. We are putting in measures to correct that also, maybe training through our own funds, picking up from some particular area, which is known for particular skill.
And the last point is there's a huge reliance on the supply chain system because ours is an industry where shipyards are primarily platform integrators. We build a hull form, then we put this that the equipment systems button up and get a platform ready for you -- I mean, for us. So we have a huge reliance on the supply chain system. And this supply chain system comprised of major players like Bharat Electronics, Hindustan Aeronautics Limited or global players to very, very small MSMEs. So there are situations. We say COVID is over. COVID is not over. There are still firms who are railing from the cascading effect. So there are challenges, but I think we are more or less tided over or tiding over these issues. Challenges very much exist.
Got it. Just to add on that. So let's say, you said that equipment and all those things, all the 3 shipbuilders have. So let's say, in the top 3, our capacity today is 24 ships. Can you, let's say, let me know like what is the capacity of the rest of the 2? And the second one would be, you said we might look at an acquisition going ahead, okay, in the next 1-year acquisition merger or something. So any probable ticket size that you would look for?
Can you -- sorry, can you just repeat the split the questions and ask?
So the first one was, let's say, all the top 3 shipbuilders, we have a capacity of 24 ships a year. Okay. So what would it be for the other 2?
Okay. '24 was -- just to place on record, '24 was enhanced from '20 till 2000. If you are looking at the other 2 shipyards, in case of Maag and docks, they have capacity to build large ships. Their dry docks and building infrastructure is larger than ours. The numbers may be less. Numbers may be less, numbers are less. But the bandwidth for larger platforms is more. Same goes for Cochin Shipyard also. Actually, Cochin has got the biggest dry dock other than [ Pipav ], the biggest operational dry dock in India.
So that will give them the flexibility of building large ships like the aircraft carrier. We don't have that capacity. But what we have, our biggest strength is multiple dry docks of various sizes, which can cater today up to destroyers. Destroyers means the ships above frigates and cets. So this a number exactly, I will not be able to tell because that will give a -- it's not an apple-to-apple comparison, but different types, capacity in terms of numbers, we definitely have the largest. But in terms of size, we don't.
Got it. And the last one, the acquisition that we will be looking for going ahead, which may or may not happen. But any particular ticket size in your mind like this much is something that we can go for?
Sorry?
The acquisition, the Vizag acquisition or some merger, et cetera, that you said like we may go for any particular ticket size or quantum?
See, at this moment, if at all we go, we'll be going for a greenfield facility, which will be developed maybe in the span of 3 to 5 years. We are not looking for -- what we have done, we have actually offset this problem by -- okay, I'll give you an example. When we took on this antisubmarine shallow water craft project, it was an 8-ship project. We were full with respect to our dock and berth infrastructure. At that point of time, LNG shipyard Katpoli did not have any order. They had huge spare capacity. So we collaborated with them. We did part construction of these ships there, leveraging our core expertise of design, project management and procurement and their facilities.
So that is the model which we have adopted, not only with the L&T shipyard, one of the small shipyards in Kolkata, we have one export platform, we did part construction there. So that is the methodology which we are currently adopting till the time we develop a facility, a greenfield facility outside Kolkata, which will take time because greenfield shipbuilding facility just does not come by switching on us. It will take a bit of time.
Sir, when we talk about the next-generation COD, the 8 in number project, you stated there are 4 bidders for the same. Can you get the names of those bidders? We are...
It's an open -- is it open information? It's information. It is Goa shipyard, Las shipyard, Mass7ox and GRSC. Okay. This is the 4 ships.
Shipyards, right? Sir, another question, and this is more to understand the shipbuilding capacity. What I want to know is that essentially, if there is a shipyard, we are making the hull of the ship. Once the hull is made, can we launch the ship in the sea and then those gadgets can be uploaded there and the shipyard is again available to make another hull of another ship so that when we say we are increasing the capacity, it means that you make the hull, roll it over on the sea. The work is happening on that ship as well simultaneously. And so is that the right way to understand this? Could you make me understand?
Okay. I'll try and give the background. See, in today's shipbuilding methodology, we do not just make hulls. As the hull is being built, actually, the shipbuilding starts with cutting off a plate. Then we assemble the plates in some shore location, which means on the dock, then these are lifted by cranes put into the dry dock, which means suppose if a ship has got 20 blocks, 20 blocks are constructed in multiple locations. Then they are jumboised into the -- within the dry dock.
Now as we do it, we do pre-outfitting, which means there are certain mandatory equipment like the main propulsion engines or the power generation equipment or the AC plants have to go in at the time of launching because once we -- there are various technical requirements to be met when the ship is in dry dock. And after the ship is moved up, then we, of course, moved. We move the ship, do the balance buttoning up, the system integration when the ship is afloat at the jetty.
While the next ship comes in, -- you're right. Exactly. That is when we say -- when I'm telling we are currently constructing 40 platforms. Naturally, -- and on the same breadth I have stated that we are shipbuilding capacity is 240 is purely by this method. While 24 ships are at various stages of construction, building b or dry docks, a few of them are at the jetties doing outfitting, being readied for trials and delivery. So you're right. That's a method.
Sir, one clarification regarding this NG INR 36,000 crores order. You said L1 instead of INR 20 crores or INR 24,000 crores, it can end up becoming INR 25,000 crores or INR 30,000 crores. So how is that actually the whole INR 36,000 crores will end up becoming INR 45,000 crores...
I'll tell you the thing. See, when any AON is taken, you have seen examples before also. Any AON is taken, AON is based on an assessment of the customer at that point of time. But in reality, because the AUM would have been taken -- in this case, it was taken almost 2.5 years back. AUM was 30 months. Now I think 33, 34 months have passed. The times have changed. The equipment costs have gone up. It is our assessment. It's purely an assessment that the INR 36,000 could go up to INR 42,000, INR 45,000. So conservative estimate is that the L1 shipyard could get in the range of INR 25,000 to INR 28,000, let us say.
So it is mostly inflation, not that some specifications have been put to the project and all?
No, no specifications. It's mostly inflation, which is the reality, which is the reality. It's been justifiable inflation.
Sir, if I can ask one question. Sir, going forward, there are those clusters which are getting developed, right? So we are at maybe reasonably very, very good utilization of our possible capacity at Kolkata. -- the clusters, which perhaps. So what are the thoughts over there? What is it that you would like to have as a company for Garden Reach -- because you have been there with Kochi, we have been there with Musga. And you stated those large ships can be made at Masgow, but we don't have the capacity. So what would be that key thing in those clusters that you will be looking at going forward?
One is the cluster would be in a place where adequate depth is there. So that all our constraints or whatever juggling what we do, we manage. But then it's after a lot of juggling, technical juggling that we do that we -- so that problem would be addressed once for all. Second is the capacity to build huge commercial ships. The war ships, we are not much worried because we intend limiting our -- because I think this question was asked sometime before, whether we would like to go for submarines or no. We are not planning to because that requires around 20 years of expertise we built up.
So our vision with respect to warship building would be to destroy our level and with commercial ship build commercial ships to super carriers or Panamax vessels, so that is. So for that, 2 requirements: one, the dry dock has to be adequately big; and second, the depth should be adequate, at least 16 to 20 meters of depth.
So I have 2 questions. First, can you talk more about the probable time line of the 3 projects, Corvettes, frigates and destroyers on the basis of RFP, the actual order signing of the contract and order booking? And the second one is without considering the new projects, when will be the current order book exhausted by?
Okay. I'll answer the first question. considering the current -- without considering these 3 projects or the export platforms that we are very confident of getting, keeping that aside, the current order book will expire by 2029. Coming to the first question, I'll take it in 3 parts. The next-generation core beds, the bid likely to be opened conservative within 3 months, that is April, I think. And from the time the bid has opened, the price bid is open, technical bids already opened and we are cleared, all 4 of us are cleared. So it will take -- knowing the systemic efficiency or inefficiency, it will take around 6 months for the contract to be -- and the revenue recognition from that will commence from 2027. That is ideal for us because that is when our dip will start.
That is when the covet will pad up -- should pan up. P17 Rao by end of the calendar year, that means 2025 end the RFP could come out. From RFP to L1 determination, it could take -- having seen the experience of NGC, it could take around 7 months for the -- from the RFP to price bid opening. And from there, 1 year for contract -- 6 months for contract signing and 2 years for revenue recognition, which means if P-17 Rao comes through, the revenue recognition will start from 2029. NGD, the next-generation destroyer is still in liquid form. I would not like to comment on that because it is still under discussion. They have not even taken an AUM for that.
Thank you for very detailed and candid answers to all the questions. I had a question around your investments in technology, automation and people. So if you could give us some thought process on the efforts you are making in terms of benchmarking GRSE with not just the other options in India, but even with some international peers, et cetera, and some investments that you may be considering in either technology, automation, people, et cetera, to build capabilities of the organization?
Thank you. Technology augmentation, our upgradation is a focus area for us on 2 calls. One is for creation of new products. I'll come to that. And second one is -- second aspect is for improving our own efficiency. Just to give an example, when we got this multipurpose vessel contract from the German client, we had been put through a ringer. 2 classification societies came, assessed our capacity capability, our processes and then only claim, they gave suggestions, something which we did not have a certain painting process, which is normally used in commercial shipbuilding.
We did not have the facility. So they said this has to be created, and we have done that. So technology adaptation towards process improvement is a focus area for us. We already have a robotic building machine doing work for us and so on. Now this is one part. Second is for new product. We -- I mean, many of you may not know, we have our product range have also got autonomous vessels, fully green vessels. See, initially, we did a project for -- it is actually the country's largest ferry, fully electric ferry, fastest ferry.
But revenue-wise, there is peanuts. But we still went in for that. Why? Because we wanted to first establish our capability and then make an inroad. Because we took that -- we subsidized it under R&D fund. Because we did that, we got qualified for the next World Bank funded project. So we are fully focused on these 2 aspects. That means technology for one new product creation, technology for process improvement. I feel we are on the right path, a lot of room for improvement, but we are on the right path.
Got it. And sir, on the people side, have you also been making efforts in terms of training, et cetera, just to improve efficiencies there also? But on the people side, training of manpower, et cetera. I know you mentioned contract and labor, et cetera, but just some...
Okay. See, our people, I'll just split it into 3 parts. People as in my core -- I would not say core, my permanent manpower it's very, very limited. It's just about 2,000 people. And of these 2,000 people personnel, around 520 are officers, which means we are a very top heavy organization and deliberately so. These officers, most of them are from the top education institutions of the country. Most of the -- many of them from the IITs and NITs. So the technological knowledge-wise, we are good. We have some of the best facilities in India with us. We have a virtual reality lab, a top end virtual reality lab, which we just took 6 years before. But we realized that, that 6 years before is no obsolete. So we are upgrading that.
So that is the kind of focus we have on people and technology. Coming to the -- what I mentioned was since we have taken our strategy, we adopted a strategy of outsourcing of noncore jobs like simple welding, plumbing, cabling, -- that pool of manpower is inadequate for a nation. Right now, we are good to go. We have around 6,000 people working in our premises on an average per day. But maybe in a year or so, year or 2, when the bigger projects come, we'll find it difficult, and we are prepared for that. We have found out methods where we have worked out strategies to improve the numbers of qualified people in our premises.
Got it. And sir, my final question was on risk management. In terms of when you bid for projects, estimation because these are very large value projects and you obviously need to make a lot of assumptions on raw materials, et cetera. So just some thoughts on how strong is the organization on whether it's bid, evaluation, bidding, price quotations and risk management because that also means supply chain and procurement?
Absolutely right. Actually, we have learned the hard way. But luckily, the impact was on minor projects. We have a robust risk management system, a Board-level risk management committee, which assesses the various risks starting from environmental to financial risk. Every bid that is submitted is with my CFO's concurrence and cleared by me. Every bid, be it small or big, we have -- so it is with that kind of prudence that we do. And any decision, sometimes we take a project deliberately at a marginal cost that is for our existence or for getting an entry. But that is a decision, not an error. So that's what I...
Sir, so I had a question. So I just wanted a percentage number like on an average, if we are building a ship, then how much percentage of that ship is being imported?
Okay. Thank you, ma'am. Indigenization has been a focus area of the government. What about Terminal Jajmat, arbara. And there are so many initiatives taken by the government to improve or increase the indigenous content. The last 3 projects that we have completed, that is the -- including the Survey Vessel Large, I considered completed because the equipment ordering, everything is over. Survey Vessel Large project, the landing craft utility and the anti-submarine Cort.
All 3 projects, we have 85% plus indigenization. Coming to weapon-intensive platforms. Now indigenization as a service, as a -- if you're looking at warship building, 100% of the hull is indigenous. Around 70% of the auxiliary machinery is indigenous. Around 50% of the weapons are indigenous. All put together, the figure I mentioned, around 85% plus is indigenous content.
Okay. And my second question was with regards to the budget. So we did see that this time, the Ministry of Defense had to give back somewhere around INR 13,000 crores back to the Ministry of Finance. So I just wanted to know like why is there so much delay in the process? Why are we not being able to spend? And we also know that we somewhere need to expedite the process now because there is also a dire need for a lot of replacements and for a lot of new things to be bought. So what is causing all this delay? Why are we not being able to spend?
My appreciation, it is my appreciation because it is actually for the ministry to answer, but I'll give -- since you asked the question, I'll give an appreciation. Now suppose if the NGC contract had been signed during the last financial year, a certain amount of payment goes as a first stage payment. They would have perhaps -- I'm just giving an example.
So it is not -- the fund expenditure is not because of the delays in execution of the project. It is perhaps in the delays in the process itself. That is the point I would like to convey. And again, it is a [ cinosoidal ] pattern. It is not that every time the funds are surrendered. There will be occasions in the last financial year, I understand around INR 13,000 crores was surrendered by the Ministry of Defense. Maybe in the next year, they'll make up for it. That's all I can say at this moment to answer your question.
I had a question. So you mentioned about subcontracting. So what part of our revenue as, let's say, percentage of revenue in value terms and in volume terms will be subcontracted outside the entity?
Can you -- sorry, could you -- what percentage of the revenue?
We'll be subcontracting. So that will be -- that will be made outside the entity outside our shipyard.
Okay. I'll put it this way. If you take a project cost, in the project cost, around 65% come from the equipment and sensors that we procure and around 20% comes from the labor. That is the resources -- human resources that go into that 20% of that 20%, around 70% to 75% is outsourced. We retain the core strength. Core strength means, let us say, the shafting work, which drives the ship. We retain the competency. The complex block fabrication, we retain the competency.
The design, 100% design is done in-house because that is the most important factor. We retain that. If you put it in percentage, if you are purely looking at percentage, it may not give you a correct picture because the design -- if you are able to give value also to that. So if you look at value come cost in that case, around 40% to 50% would be outsourced of the labor part and the balance is done in-house.
Sir, I have a question. So as per the budget, there is a lot of advantage for ship breaking. You did mention a little bit about it, but can you give us more clarity as to how do we plan to take it forward and use the benefits of it? Do we plan to have a separate section? Or how are we planning to utilize that?
Okay, ma'am. The intent of the government is actually to C the shipbuilders to build ships in India. The target globally, I think our share is single-digit figures, low single-digit figures of the global commercial fleet. The stated target of the government is to increase this to 20% by 2047. It's a long drawn process. For that, you need the shipowners. You can't impose something on the shipowners without giving them a carrot. The carrot that has been given is that if you break a ship within India, like if I am a shipowner, and next time when I construct a ship within India, I can use that credit. 40% of the scrap value of the ship broken would be credited into my shipbuilding. I'll get that kind of financial assistance. So it's a very smart way to get the shipowners to build ships in India.
As far as GRSE is concerned, see, the fact is we are shipbuilders. We are core shipbuilders. We are not looking at this moment for marrying shipbuilding with ship breaking. But then as an ambitious -- really ambitious shipyard, we are open to such options in the future. But at this moment, see, all these things are budget promulgated. They have not been translated into policies yet. It might take a couple of months. We'll see. If anything attractive comes out of that, we are open for that. But at this moment, it is still a stated or statement in the budget.
Sir, my question is, since we are a government PSU and last from 1 year, we as a common layman gets the feeling that government is something slowing decision-making. in every aspect as far as defense is concerned, which was there in last 3, 4, 5 years back. So since you are close to the government, what is your personal honest opinion, whether slowdown has happened at the government level because they are concentrating more on a social part of it rather than -- so I think defense is -- we feel that it has taken a bit. So what is your personal?
Sir, we are not totally owned by government, we are owned by you also way that government -- Sir, but I would not like to consider that any decision is slow because if you see -- you watch 2025 or '26 rather the calendar year onwards, multiple projects, RFPs are going to come out. Only when you see the RFPs coming in, you will see some momentum. Coast Guard, at least 3 RFPs have been converted to orders in the last financial year. 3 RFPs, they have converted into orders. Navy, NGC, whatever I mentioned, they are all at least 6, 7 of them RFPs are going to come out in the next 1 year.
So I don't think any decision-making delays are there. Second is all these schemes which they are coming up, be it from the Ministry of Shipping or made it from the Ministry of Defense, both are coming from the same government of India. So initiatives-wise and decision-wise, in my appreciation, as a PSU or CMD, I don't think there is any delay.
Sir, but reason is too weak as far as vision is concerned, but ground level reality, I think there is -- looks like there is some slowdown? I don't.
Sir, I would like to put it this way. Vision, it's like very interesting talks have gone about quantity of work, 90 hours per week, 75 hours per week. But I have a very -- I mean, I'll come back to your point. I just want to lay the foundation for that. And subsequent to that, another business head tell that it is a quality that matters. It is not quantity. So there, I have a point. Quality comes only with tons and tons of quantity. And that quantity comes from, time. Oise, quantity cannot come. And if quantity is not there, quality cannot come.
Similarly, vision, yes, to get the vision, like I was just addressing one of the queries. The vision is to obtain 20% share in the global commercial shipbuilding fleet by 2047. That itself is -- so that itself is a very ambitious vision from 2% or 3% to get to 20%. But for that 20%, the initiatives what they have listed, shipbuilding, Maritime, Corpus Maritime Development Fund, they are all actual initiatives that are being taken. Similarly, in warship building, both the Navy and the Coast Guard have stated. I mean they are not excise. -- their prospective plans indicate ships, Navy wants to go threefold in the next 7 to 10 years, maybe too ambitious.
Coast Guard wants to double their fleet by 2030. But for that to happen, the RFPs have to come out. The ships have to be built. The process has started in my appreciation as the CPSC head is that the process has started, the foundation laying, the concrete laying will take a finite amount of time. But once it is laid, it will move fast. This is my appreciation.
So just on similar lines and just to add to the question which was there. Sir, historically, have we seen any point of time that -- hence, as investors, we just want to make sure.
I'll tell you, sir. The bids were opened in August '24. The techno commercial bids were opened in August '24. The technical clearance have been accorded to all the naturally because if they are short list, we qualify for that. By November or December, I don't remember. Yes, there is a marginal delay. I'm giving a conservative time line of it slipping over to next year.
But you see, sir, because these are high-value orders. So when a high-value order is there, naturally, the government would not like to shortcut the process. It takes time from our perspective, I want the order yesterday. I want the price to be opened yesterday. But having been on the other side, I also understand there are compulsions. Yes, there are delays, but the delays are not unseemingly....
Pocket on a shelf, not those types. So history has also never -- we have never seen such a case happen historically for any of the defense orders where RFQs were there, tenders were invited from participants and...
I'm not able to recollect maybe yes, sir, but I'm not able to recollect any of the RFQs getting -- not getting converted into a -- there could be delays. Not canceled. Perfect, sir. That -- but it always happens. It always happens.
Yes. So patience is the name of the game. So we are there, but just to make sure.
Absolutely.
Thank you, sir. With this, we conclude the Q&A session.
I think somebody has already raised hand. I think we should give a fair chance.
So what's your cash...
I hope your question is not a tricky question. It's like I just want to put my foot in my own mouth. -- ask a general question, how are you doing and all this.
Just 2 questions. What's your cash and bank balance as on December?
Cash and a simple question, a straightforward question. I'll let [ DF ] answer this question.
This is as on 31st March -- 31st December 2024, INR 3,214 crores. Out of that, our own fund is INR 577 crores.
Okay. And sir, second question is on your provision. So next year, as you will be completing P17 Alpha for next 2 years, you will be taking a provision for that, mainly for liquidated damages and for other onerous contracts, which is a general norm. Now how much as a percentage of your sales would that be because that will impact specifically on your margins. These are your high-value contracts. So if you can share some numbers.
Yes. Provision liquidated damages, we are making provision as per Ind AS 115. And the provision is made only when we'll exceed the delivery schedule. As on date, whatever already CMD has told that the project what we are executing -- the delivery schedule has not exceeded. Major project is P17 Alpha, First delivery is August 2025. And we are hopeful that we'll deliver prior to that.
Sir, I just mentioned earlier when my introductory talked that the first activity when we are confident of delivery of first ship is the harbor trials. We have completed the harbor trials, and we intend sending the ship for the first contractor trials during this month. We are confident of delivering the ship the first ship well beyond -- well ahead of -- not beyond, well ahead of the contracted delivery issue. So we are not unduly concerned about unless some force majeure condition happens, we are not unduly concerned.
Thank you, sir. Thank you, everyone. With this, we conclude the Q&A session. I would request Commodore P. Hari sir to give his closing remarks. And thereafter, we can join us for the high tea. Thank you. Sir, over to you.
Thank you, ladies and gentlemen. As I mentioned, it's always a pleasure because I'm not well today because I've been traveling for the last 4 days in and out of Kolkata. I mean, Kolkata to Bangalore, Bangalore to Kolkata back today to Bombay, next week, Delhi. So I'm a bit down. But after intra, I'm back to normal. So thank you.
Thank you. Thank you, sir.