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Sudarshan    


Mumbai, India

Read Business Not Stock Prices Co-Founder of a financial platform focused on equity research which has overall network of 50k investors. Have exposed multiple corporate governance issues in financial market encompassing from smallcaps to largecaps. Everything about some stocks, something about every stock

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KMEW

Comments: 0 | Likes: 0 | Current Price: ₹ 1350


Knowledge Marine Works - Big Opportunities Ahead

KMEW, or Kolkata Marine Engineering Works, is a leading player in the maritime industry, offering a comprehensive range of services including dredging, owning and operating marine crafts, shipbuilding, and marine craft repair. With its strategic positioning and a strong track record of success, KMEW has established itself as a trusted partner for major ports and maritime authorities, both domestically and internationally.


Introduction: KMEW, or Kolkata Marine Engineering Works, is a leading player in the maritime industry, offering a comprehensive range of services including dredging, owning and operating marine crafts, shipbuilding, and marine craft repair. With its strategic positioning and a strong track record of success, KMEW has established itself as a trusted partner for major ports and maritime authorities, both domestically and internationally.

Key Rating Drivers:

Strengths:

  1. Diverse Service Offerings: KMEW provides a wide array of services including dredging, owning and operating marine crafts, shipbuilding, and repair, catering to the diverse needs of the maritime industry.
  2. Strong Customer Base: The company serves major customers including port authorities such as Deendayal Port Authority, Haldia Port Authority, Kolkata Port Authority, Paradip Port Authority, Vizag Port Authority, and Mumbai Port Authority, among others.
  3. Operational Excellence: With in-house capabilities for designing and building fleets, KMEW maintains lower capital expenditure and sustains EBITDA margins of 34%+, ensuring profitability and efficiency in operations.

Dredging Industry Dynamics and Opportunities for KMEW:

Policy Support:

  • Sagarmala Project: Initiated by the Government of India in 2015, aims to develop mega ports, modernize existing ports, and establish Coastal Economic Zones, providing a significant boost to the maritime infrastructure sector.
  • Shipbuilding Financial Assistance Policy: Provides financial grants to Indian shipyards for shipbuilding contracts, promoting indigenous shipbuilding capabilities.
  • Draft Inland Vessels Bill, 2020: Addresses safety and environmental regulations, ensuring compliance with international standards and technological advancements.
  • Make in India Initiative: Provides purchase preference to domestic suppliers and contractors, fostering growth of the domestic maritime industry.
  • First Right of Refusal: Companies owning Indian flag dredgers have the first right of refusal if the rate is within 10% of the lowest valid offer, promoting indigenous dredging capabilities.

Growth Strategies - New Segments for KMEW:

  1. Cutter Suction Dredgers (CSDs): Hydraulic dredgers with the ability to dredge various soil types, KMEW plans to engage in dam desiltation projects across multiple rivers, expanding its capabilities and market reach.
  2. Suction Hopper Dredgers: As rivers carry sediment downstream, including valuable resources like sand, KMEW sees opportunities in dredging for construction, manufacturing, and infrastructure development projects, tapping into new market segments and revenue streams.

By diversifying into new segments such as cutter suction dredgers and suction hopper dredgers, KMEW aims to capitalize on emerging opportunities and strengthen its position as a leading player in the maritime industry.

Dredging Industry Dynamics and Opportunities for KMEW:

Policy Support:

  • Sagarmala Project: Initiated by the Government of India in 2015, aims to develop mega ports, modernize existing ports, and establish Coastal Economic Zones, providing a significant boost to the maritime infrastructure sector.
  • Shipbuilding Financial Assistance Policy: Provides financial grants to Indian shipyards for shipbuilding contracts, promoting indigenous shipbuilding capabilities.
  • Draft Inland Vessels Bill, 2020: Addresses safety and environmental regulations, ensuring compliance with international standards and technological advancements.
  • Make in India Initiative: Provides purchase preference to domestic suppliers and contractors, fostering growth of the domestic maritime industry.
  • First Right of Refusal: Companies owning Indian flag dredgers have the first right of refusal if the rate is within 10% of the lowest valid offer, promoting indigenous dredging capabilities.

Growth Opportunities for KMEW:

  1. Order Book Visibility: With an expressed interest in projects worth Rs 1,100 crore, KMEW demonstrates a steady stream of revenue-generating projects, enhancing its growth prospects.
  2. Participation in National Waterway Projects: Actively bidding for National Waterway projects, KMEW aims to contribute to the development of inland water transport infrastructure in India.
  3. Collaborations with Private Organizations: Strategic partnerships with ITD Cementation and L&T for dredging works enhance project execution capabilities.
  4. Diversification into New Markets: Exploring opportunities in dam desiltation markets, KMEW aims to diversify revenue streams and capitalize on emerging demand.

By focusing on expanding its order book, collaborating with key industry players, and diversifying into new markets, KMEW is poised to capitalize on growth opportunities and strengthen its position in the maritime industry.

Order Book Visibility: KMEW's growth prospects are bolstered by its robust order book visibility, indicating a steady stream of revenue-generating projects. With an expressed interest in projects worth Rs 1,100 crore, the company demonstrates its commitment to expanding its portfolio and capturing market opportunities.

Other Initiatives:

  1. Participation in National Waterway Projects: KMEW has actively participated in bidding for several National Waterway projects, aiming to contribute to the development of inland water transport infrastructure in India.
  2. Collaborations with Private Organizations: The company plans to forge strategic partnerships with private organizations such as ITD Cementation and L&T for dredging works, leveraging their expertise and resources to enhance project execution capabilities.
  3. Diversification into New Markets: KMEW is exploring opportunities in markets related to dam desiltation, aiming to diversify its revenue streams and capitalize on emerging demand in sectors beyond traditional dredging.

By focusing on expanding its order book, collaborating with key industry players, and diversifying into new markets, KMEW is poised to capitalize on growth opportunities and strengthen its position in the maritime industry.

 

Dredging Services at KMEW: Dredging is the process of removing sediments and debris from the bottom of oceans and harbors to create navigable waterways for shipping traffic at ports. It involves underwater excavation to mine minerals, sand, gravel, and gold, and reclaiming dredged material to create new land. Environmental dredging is also undertaken to remove pollutants from water bodies. The dredging process includes excavation of material from the sea/riverbed, transportation of the loosened material using a dredger, and deposition of dredged material to a spoil area.

Types of Dredging:

  • Capital Dredging: Removal of sediments which have not been previously dredged, including virgin sediments and channel creation for larger vessels.
  • Maintenance Dredging: Removal of sediments accumulated in the channel since the previous dredging project, ensuring navigable waterways for shipping traffic.

KMEW Projects:

  • Sittwe Port, Myanmar
  • Mangrol Fishing Harbour
  • Veraval Fishing Harbour
  • Kolkata Port
  • Haldia Port
  • Yangon Port, Myanmar



Management Team at KMEW

SAURABH DASWANI Managing Director

  • Responsible for the overall management of the organization, bringing over 7 years of experience to the role.
  • Areas of expertise include procurement, new building, vendor management, and budgeting.
  • Completed PGDA with specialization in Finance from Symbiosis.

KANAK KEWALRAMANI Whole Time Director and CFO

  • Brings over 14 years of experience in compliance, law, finance, and taxation to the table.
  • Qualified Company Secretary from the Institute of Company Secretaries of India.
  • Completed LLB and PGDA with specialization in finance from Symbiosis.

SUJAY KEWALRAMANI Chief Executive Officer

  • With over 17 years of experience in the marine, dredging, and shipping industry, Sujay brings a wealth of knowledge to the company.
  • Additional experience in ship designing, building, and repairing.
  • Holds a degree of M.Sc in Naval Architect & Marine Engineering from the University of New Orleans.
  • Awarded "CEO of The Year" by the Indian Achievers’ Award 2022-23 & 2023-24.

JAGAT JIBAN BISWAS Non-Executive Director

  • Brings a rich experience of more than 43 years in the Marine, dredging, and Engineering field, with a previous role as the Ex HoD of Kolkata Port.
  • Graduated from T.S. Rajendra, Mumbai in 1978, and cleared Competency Examinations on Nautical Sciences from DG (Shipping), India.

With a skilled and experienced management team at the helm, KMEW is well-positioned to navigate challenges and capitalize on opportunities in the maritime industry.

H1FY24 Highlights for KMEW

Consolidated Financial Highlights:

  • Revenue from Operations: Rs. 1,069 million
  • Gross Profit Growth: Rs. 410 million, up by 3.5%
  • EBITDA Margin: 34%
  • Net Profit: Rs. 244 million
  • EBITDA: Rs. 361 million
  • PAT Margin: 23%
  • Operational Highlight:
    • Dredging Revenue: Rs. 1,034.6 million, representing a growth of 97%
    • Other Revenue: Rs. 34.2 million

Operational Highlight:

  • Vessel Utilization: 100%

With strong financial performance and impressive operational highlights, KMEW continues to demonstrate its resilience and growth potential in the maritime industry.

Industry Opportunities and Outlook

The Indian shipping industry has witnessed significant growth in recent years, showcasing the country's commitment to bolstering its maritime presence. With the fleet of ships under the Indian flag increasing from 1,205 in 2014 to 1,526 in 2023, India is poised to become a formidable player in the global maritime arena.

Cargo Handling Milestone: India's major ports achieved a remarkable milestone by handling a record-breaking cargo volume of 795 million tonnes in fiscal year 2022-23, marking a notable 10% increase compared to the previous year. Ports such as Syama Prasad Mookerjee Port (Kolkata), Deendayal (Kandla), Jawaharlal Nehru Port, and Paradip Port have played pivotal roles in this achievement. This success reflects the growing importance and potential of the maritime sector in India.

Infrastructure Development: Domestic ports are gearing up to handle larger cargo volumes by accommodating bigger ships and aiming to meet global standards in port infrastructure. Efforts are underway to enhance basic infrastructure, including deepening channels, introducing mechanization, and building more berths. This push for better infrastructure is expected to drive higher demand for the dredging industry, which plays a crucial role in these improvement projects.

Growth of the Dredging Industry: The Indian dredging industry, currently valued at around USD 1.5 billion, is expected to witness substantial growth in the future. With approximately 121 million cubic meters dedicated to dredging activities, particularly in major ports, the industry presents lucrative opportunities for growth and investment.

Key Government Initiatives: The Central Government's Sagarmala project aims to enhance ports and waterways infrastructure, with projects worth Rs. 2.12 trillion expected to be completed by 2024. Efforts are also focused on reducing turnaround times at major ports, with current turnaround times already reduced to 26.58 hours. Additionally, the government is investing in enhancing the efficiency of inland waterways, with initiatives such as Jal Marg Vikas, Arth Ganga & Arth Brahmaputra, and the Inland Vessels Bill.

Conclusion: India's maritime sector is poised for significant expansion and development, driven by robust growth in cargo handling, infrastructure enhancement initiatives, and government support for the shipping and dredging industries. As the industry continues to evolve and innovate, it presents ample opportunities for stakeholders to capitalize on India's growing maritime potential.

Conclusion: KMEW's strong market position, diverse service offerings, and strategic initiatives position it as a key player in the maritime industry. With a focus on operational excellence, customer satisfaction, and prudent financial management, KMEW is poised to continue its trajectory of success and deliver value to its stakeholders in the years to come.

 

Disclosure:

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure:

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.

Disclosure legality:

I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.

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