The Great Eastern Shipping Company Limited — Q4 FY26

Great Eastern Shipping Company Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=tBja0odg-B4 Published: 1d ago

0:00 Ladies and gentlemen, good day and thank you for standing by. Welcome to the Great Eastern Shipping Company Limited earnings call on declaration of its 0:08 8 seconds financial results for the quarter ended 31st March 2026. 0:13 13 seconds At this moment all participants are in listenonly mode. Later we will conduct a question and answer session. I now hand 0:20 20 seconds the conference over to Mr. Shiva Kumar, executive director and CFO. Thank you and over to you sir. 0:27 27 seconds Thank you Yashas Shri. Uh good afternoon everyone and welcome to the conference call for the results of Q4 and full year FI26. 0:39 39 seconds Uh we'll quickly run through the presentation uh so that and try to leave as much time as possible for the uh Q&A. 0:50 50 seconds Uh sorry customary uh disclaimers apply. 0:53 53 seconds We don't focus the market. We have a lot of our capacity on the spot market. So we don't give uh earnings outlook. Uh we 1:03 1 minute, 3 seconds are discussing what we are seeing in the market and uh uh so please take it as such. 1:11 1 minute, 11 seconds Uh the highlights of course is that this is our uh best ever quarter in terms of profits. It is also the best ever year 1:20 1 minute, 20 seconds in consolidated profits. uh for the first time we crossed a,000 crores in consolidated net profit for a year. some 1:29 1 minute, 29 seconds of it uh as a result of the exchange rate movement during the quarter. 1:34 1 minute, 34 seconds Uh our NAV continues to move higher moving by about 200 rupees between uh 1:42 1 minute, 42 seconds end of December and end of March and we've also declared our highest ever quarterly dividend of 11 rupees 70 per 1:49 1 minute, 49 seconds share taking the total dividend for the year to 35 rupees 10 pesa per share. 1:56 1 minute, 56 seconds uh you've seen the results. I won't go too much into the results. Uh later on we can if you have any specific questions we can go uh to them. 2:05 2 minutes, 5 seconds Um yes sir. 2:10 2 minutes, 10 seconds Yeah going to uh uh I already mentioned the uh net asset value. So you can see on a standalone basis we were at uh 2:19 2 minutes, 19 seconds about just over 1,100 rupees a share in March last year and now we're at 1422. 2:26 2 minutes, 26 seconds That's a 300 rupee improvement. So we've had significant movement in asset prices and of course we have a lot of cash 2:33 2 minutes, 33 seconds acrals in the group. Uh similarly for the consolidated NAV as well. 2:41 2 minutes, 41 seconds uh looking at what's happened with the business uh the event the big event of course which told the headlines was the 2:49 2 minutes, 49 seconds the straight of hormers issue uh we'll not spend too much time on this suffice to say that because of the 2:58 2 minutes, 58 seconds disruption uh trade patterns uh went uh were all over the place literally and 3:05 3 minutes, 5 seconds which resulted in a tightness in the tanker markets uh which and therefore We saw a spike in rates in March and April 3:14 3 minutes, 14 seconds for crude and product tankers and also for LPG ships. 3:20 3 minutes, 20 seconds Uh however markets were tight even before that. Uh tanker markets uh for the crude tankers were uh were pretty 3:28 3 minutes, 28 seconds strong from all the way from December to February even before uh this issue happened. 3:35 3 minutes, 35 seconds So because of the scramble to source cargos uh oil cargos from wherever they were available, we saw a lot of longhaul 3:44 3 minutes, 44 seconds trades replacing the Middle East to Asia trades. So we had sourcing from the Atlantic basin which is the swing 3:52 3 minutes, 52 seconds provider of uh of barrels and uh which had to then come longhaul all the way to 3:59 3 minutes, 59 seconds Asia and that resulted in a big spike in demand for ships. Therefore, a big spike in the uh freight rates. 4:07 4 minutes, 7 seconds As a result, asset prices also went up. 4:10 4 minutes, 10 seconds We're looking at about 10 to 20% uh increase during the quarter. 4:16 4 minutes, 16 seconds Uh the order book continues to be uh at around 20%, we've seen the crude tanker order book build up a lot in the last 3 to 6 months. 4:27 4 minutes, 27 seconds Um Drybulk was while not seeing the excitement of the uh tanker space in 4:36 4 minutes, 36 seconds March uh was steady and had an unusually uh strong quarter if only in the context 4:45 4 minutes, 45 seconds of Q1 of the calendar year being uh seasonally traditionally very weak. So 4:52 4 minutes, 52 seconds the rates were uh quite uh quite remunerative during the quarter uh 4:59 4 minutes, 59 seconds across the board especially for cape sizes. 5:04 5 minutes, 4 seconds Uh going to LPG again LPG rates have been pretty strong and they got stronger towards the end of the quarter. Uh again 5:13 5 minutes, 13 seconds the marginal provider of LPG barrels is the United States and so uh a lot more 5:21 5 minutes, 21 seconds demand for LPG to move long haul from US to Asia. 5:28 5 minutes, 28 seconds Uh I already mentioned what happened to asset prices during the quarter and you can see that in the charts. Uh the order book I already mentioned. 5:37 5 minutes, 37 seconds Uh so we are at around 20% for crude tankers and product tankers plus minus a couple of percent. Uh LPG continues to be high at 27%. 5:46 5 minutes, 46 seconds And uh dry bulk is at 13%. 5:50 5 minutes, 50 seconds Uh this is uh just a comparison of the order book to uh the scrapping potential which is how many vessels have become 6:00 6 minutes overage. And you can see that it's for the tankers it's pretty close uh tankers and dry bulk. It's only the LPG where 6:09 6 minutes, 9 seconds the order book is very heavy as compared to the old ships. 6:14 6 minutes, 14 seconds Uh this is just a year-wise depiction of this. So the supply is actually kicking in for crude tankers and product uh for crude tankers in cal 27 and cal 28. 6:27 6 minutes, 27 seconds Uh now scrapping again uh as one would understand this is uh nobody's scrapping ships really because markets are so strong. 6:36 6 minutes, 36 seconds Coming to the drilling business this is the data on jackup utilization. Uh the March 26 data includes data of all the 6:44 6 minutes, 44 seconds rigs which are on contract in the Middle East where rigs were put on standby. 6:49 6 minutes, 49 seconds They've been taken as continuing on contract. uh also this is uh what is called uh you this is the simple 6:56 6 minutes, 56 seconds utilization. We have another measure called marketed utilization which is rigs which are being marketed actively 7:05 7 minutes, 5 seconds for contracts. That utilization continues to be somewhere around the 84 to 85% uh mark. 7:18 7 minutes, 18 seconds Um this is the uh usual uh sheet that we show. There is uh very little new 7:24 7 minutes, 24 seconds building uh activity in the rig uh space uh and therefore there's a very large uh 7:32 7 minutes, 32 seconds old fleet uh which is an overhang for the markets. 7:38 7 minutes, 38 seconds Uh this is the shareholding pattern. I won't go into it too much. the also the fleet data and the TCYS 7:47 7 minutes, 47 seconds uh return on equity continues to be strong uh return on capital employed continues to be strong you can see what's happened with the EPS for the 7:56 7 minutes, 56 seconds last four years so in excess of 150 rupees per share and of course uh cash generation has always been strong uh in 8:04 8 minutes, 4 seconds our business even when the markets are very weak it's a cash flow generating business 8:11 8 minutes, 11 seconds uh the chart on the bottom left hand uh corner shows the movement in net asset value over the last five years just to 8:20 8 minutes, 20 seconds depict how much of a contribution has come from cash flows and how much actually from feed change and uh we keep 8:30 8 minutes, 30 seconds emphasizing this because when uh when we say NAV the first thought is this is um 8:39 8 minutes, 39 seconds uh this is because of the hot market where it's a marktomarket gain And if the market goes down again, all of this can uh can again be lost. 8:49 8 minutes, 49 seconds However, uh this is to emphasize that a lot of the NAV change has come from cash 8:56 8 minutes, 56 seconds profits from cash flows from the ships and not much of it is actually from the fleet value change. This is on a five-year basis. 9:07 9 minutes, 7 seconds against share prices uh to net asset value we were at 08 or so on a consolidated basis. 9:15 9 minutes, 15 seconds Uh we continue to pay dividends even in the weak markets we were paying some dividends uh but we have of course upped 9:22 9 minutes, 22 seconds the dividends significantly in the last four years. 9:26 9 minutes, 26 seconds Uh we continue to be heavily net cash uh $500 million standalone uh on net cash 9:33 9 minutes, 33 seconds basis. We are doing our switch transactions and you would have seen that in the S&P transactions we are selling some of our older ships and 9:41 9 minutes, 41 seconds replacing them with similar ships of a more uh newer similar ships. Those are what we call the switch transactions. 9:51 9 minutes, 51 seconds We have we still have some debt uh because we can't repay it but these are the repayment schedules for our debt. As 9:58 9 minutes, 58 seconds of March 31st, we had 157 million of debt in the group and that will be out within the next 2 years or so. 10:08 10 minutes, 8 seconds The repricing of offshore assets and the orange bars are what interests a lot of you. These are our rigs which have to 10:17 10 minutes, 17 seconds come up for repricing. We have three rigs coming up for repricing in this financial year. uh one of which uh is 10:25 10 minutes, 25 seconds already has already completed her contract. It was a short-term contract and uh she is awaiting her next 10:32 10 minutes, 32 seconds business. Uh we have two which will come off in the second half of the financial year. Uh so we will have to look for business for those rigs. 10:43 10 minutes, 43 seconds Uh on the vessels front uh most of our capacity is locked in for uh for this year. We have I think 80% of our days 10:50 10 minutes, 50 seconds for this year have already been locked in on the vessel side. 10:55 10 minutes, 55 seconds Uh the rest is uh data for you to look at uh at your leisure. This is not specifically related to this quarter. 11:04 11 minutes, 4 seconds I'm happy to take uh questions. I have Rahul Shet with me and we are happy to take any questions that you may have. 11:12 11 minutes, 12 seconds Thank you. 11:13 11 minutes, 13 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may click on the raise hand option available on 11:21 11 minutes, 21 seconds the toolbar. You may also post your text questions. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 11:34 11 minutes, 34 seconds First question is from VBO Batya from Honesty and Integrity Investment. Please go ahead. 11:43 11 minutes, 43 seconds Yeah. Uh hi. Uh can you hear me sir? Yes. Yes, please go ahead. 11:48 11 minutes, 48 seconds Yeah, thanks. Thanks a lot for providing the opportunity. Uh so uh firstly you know address the important uh things 11:55 11 minutes, 55 seconds that are geopolitically. So uh uh I know you know the outcome of whatever is happening nobody can but uh in both the 12:04 12 minutes, 4 seconds situations uh like unrobable outcome where everything normalizes whenever it happens. Do you think uh u the markets 12:14 12 minutes, 14 seconds will are likely to pan out in terms of uh in uh whether these inefficiencies 12:20 12 minutes, 20 seconds might continue for some time or or do you think uh uh do you think the you know uh the situation can normalize 12:28 12 minutes, 28 seconds pretty quickly and in the other scenario where things don't normalize how do you think uh the markets will behave will 12:37 12 minutes, 37 seconds the because ultimately you know slowly uh uh uh the inefficiencies will come out in the sense that there will be tank cars who will find ways to come out of 12:46 12 minutes, 46 seconds state of be available on the other routes slowly and steadily. So do you think the rates will uh might behave 12:54 12 minutes, 54 seconds after some time if the situation continues on the other rates might go down. So what's your assessment in both the scenarios? Uh whatever way it happens. 13:04 13 minutes, 4 seconds Okay. So if I can just recap your question so that we've got it correct because you're not very clear at the start. You want to know what can happen 13:11 13 minutes, 11 seconds under different scenarios of a reopening of the straight of horse, right? 13:16 13 minutes, 16 seconds Yeah. And if it doesn't open, if it doesn't open also, what's what's the outlook? What how do you chase the 13:23 13 minutes, 23 seconds outlook? What's how it's going to pan out? 13:27 13 minutes, 27 seconds So, uh you know to provide an outlook on exactly how the markets will behave in either situation is very complicated. As 13:36 13 minutes, 36 seconds you can imagine, uh we are also witnessing this probably for the first time, you know, since maybe the 1980s. 13:44 13 minutes, 44 seconds Uh you know, to just give you a bit of a perspective, the closing of the street where a large percentage of especially the oil trade 13:52 13 minutes, 52 seconds and the LPG trade comes from has resulted in in a lot of disruption in the market because countries that relied 14:00 14 minutes on the cargos coming from that region have to now source cargos from other regions. to just to give you a simple example if India was procuring LPG or 14:10 14 minutes, 10 seconds oil from the Middle East. Now if they have to procure it from either US or Latin America or some other region the 14:17 14 minutes, 17 seconds distances go up significantly which is what led to a tightening of the market after the straight had uh shut and even 14:26 14 minutes, 26 seconds if you look at it if even if you take a scenario where the straight opens up then you will have a flurry of Middle Eastern cargos lot of the ships are not 14:35 14 minutes, 35 seconds in the Middle East anymore because they've moved out to get caros from elsewhere so generally the rates will have to strengthen to pull ships back 14:43 14 minutes, 43 seconds into that region. Now all of this is uh difficult to really forecast because as you can imagine there are many many 14:51 14 minutes, 51 seconds factors to consider to give such a scenario and therefore we believe that giving this you know exact scenario analysis and saying if it remains shut 14:59 14 minutes, 59 seconds this will happen if it opens up this will happen is honestly a very difficult game to predict. So I think we will uh 15:07 15 minutes, 7 seconds not be able to provide such a you know maybe the kind of accurate answer or the kind of you know outlook that you wish to see. 15:14 15 minutes, 14 seconds Yeah. It's in the nature of guesswork really. Yes. And anybody's guess. So you mentioned inefficiencies when you asked your question. Yes. This is going to be 15:24 15 minutes, 24 seconds very inefficient. Now how that plays out in terms of rates? It's tough to say. 15:29 15 minutes, 29 seconds You know I can just give you one more perspective. After sourcing a lot of LPG cargos from the US, there are so many LPG vessels and not just for India, for 15:38 15 minutes, 38 seconds many other countries, there were so many LPG vessels and other category of vessels that were trying to pass through the Panama Canal that the congestion in 15:46 15 minutes, 46 seconds the Panama Canal has gone up because now everyone needs to pass through it to get American cargos to come to the east because you know it's a shorter route to 15:54 15 minutes, 54 seconds to go through the canal. Now all these factors to forecast you know which one will play out to what level of strength or negative is very difficult to you 16:03 16 minutes, 3 seconds know actually put down and give you okay this is exactly what may happen eventually like how sh mentioned this is in the area of just guesswork and you 16:11 16 minutes, 11 seconds know our guess will probably as be as good or bad as yours and the way we approach it while you have not asked a question the way we approach it in such 16:19 16 minutes, 19 seconds a volatile situation is we are prepared for whichever scenario happens we have a very large proportion of our fleet in 16:27 16 minutes, 27 seconds the spot market as always. So we are in a position to take advantage if there is market strength and as we have collected 16:35 16 minutes, 35 seconds so much cash and we are uh waiting to invest if the markets go the other way we are there to invest as well as an opportunity. 16:46 16 minutes, 46 seconds Got uh so connected to this let me ask you one more specific question. So in terms of the capacity of uh you know 16:55 16 minutes, 55 seconds crude and product tankers that are stuck in in hormones and not able to sell 17:02 17 minutes, 2 seconds uh uh versus the uh barrel that has been cut out from the market because of the supply going off. 17:12 17 minutes, 12 seconds I mean do they match or there are larger I mean the uh the cargo that the vessels 17:19 17 minutes, 19 seconds can carry that are stuck is much larger than the var that are that so the capacity of food bankers which is 17:27 17 minutes, 27 seconds stuck inside is about 5%. the capacity of product tankers stuck inside maybe 2% and similar for LPG 17:35 17 minutes, 35 seconds the proportion of cargos which are stuck because of this closure is much higher 17:42 17 minutes, 42 seconds than this so while it reduces the impact slightly uh it is not similar in numbers 17:51 17 minutes, 51 seconds okay got okay that's it for me just remember one thing you know it's not just on supply demand you have to also look at tmile impact 17:59 17 minutes, 59 seconds which is what I was alluding to earlier because now ships are sailing much longer distances to get the cargos from further away and remember because of the 18:08 18 minutes, 8 seconds changing trading trading patterns at least up until now we've seen a lot of inefficiencies in that which is what had supported the market 18:17 18 minutes, 17 seconds thank you'll take the next question from the line of Duv Jen from Ambit Capital please go ahead 18:25 18 minutes, 25 seconds thanks a lot team for the opportunity I had uh you know two questions The first question you know with respect to shipyard capacity. So uh if I'm not 18:34 18 minutes, 34 seconds wrong there was news flow around you know at the start of the war with respect to shipyard delaying the uh 18:41 18 minutes, 41 seconds delivery of ships which could obviously you know help on the supply side. So uh a you know uh is that true and b uh you 18:49 18 minutes, 49 seconds know how should we look at the shipyard capacity now versus what it was earlier. 18:53 18 minutes, 53 seconds So what this order book uh you know could could look very high but uh uh to think about the slippages that could happen would be very good to uh hear your perspectives. 19:04 19 minutes, 4 seconds At least as of now we have not seen any uh significant data on the slippages. So you know meaning y have taken a lot of orders and it and you know they're still 19:12 19 minutes, 12 seconds to be delivered and it is possible slippages do happen but at least as of now we don't envisage such big slippages 19:20 19 minutes, 20 seconds that it may change the dynamic of the market. Was there a further question to this or when you were talking? 19:25 19 minutes, 25 seconds No, that was so that was Yeah. And the second question that I had was uh with respect to you know the uh oil demand stock that's there with various 19:34 19 minutes, 34 seconds countries. So you know given the fact that uh we've seen you know so much cargo actually being stuck in state of Hormus. 19:42 19 minutes, 42 seconds So even whenever it opens right is it safe to say that uh because most of the countries are at the lower end of their 19:49 19 minutes, 49 seconds inventory of crude uh we will see a continued demand through the year. Uh so whichever scenario it's only going to stock. 19:58 19 minutes, 58 seconds Yes. 20:00 20 minutes So uh you know again we can just guess that countries may want to replenish their stocks. Uh having said that you know the US SPR which has been talked 20:09 20 minutes, 9 seconds about a lot it used to be at the 700 million mark it had come down to maybe four five 44 450 million just before the 20:16 20 minutes, 16 seconds this current war uh now they're drawing down on it you know but they never took the 400 back to 700 but counter to that 20:24 20 minutes, 24 seconds countries like China had built up stock so you know one would have logically expected US to go back up and China not to build more because they already had a 20:32 20 minutes, 32 seconds lot of stock but US didn't go back up But China built a lot more stock. So, you know, just to take it at, you know, 20:39 20 minutes, 39 seconds just to use common sense, I would assume that countries will go back to stock building, but we'll have to see how uh they play it. 20:47 20 minutes, 47 seconds Got it. Yeah. Yes. Please. 20:54 20 minutes, 54 seconds Yeah. You know when the container squeeze happened in 21 just after COVID uh people were saying that uh uh that 21:03 21 minutes, 3 seconds consumer consuming countries will move from just in time to just in case. So trying to build resilience. Uh maybe 21:11 21 minutes, 11 seconds that's something that commodity consuming uh areas will want to do as well. 21:20 21 minutes, 20 seconds Got it. No thanks a lot for this and all the best. Thank you. 21:26 21 minutes, 26 seconds Thank you. Next question is from Amit Ketan from Labernam Capital. Please go ahead. 21:34 21 minutes, 34 seconds Uh hi, thank you for taking my question. 21:37 21 minutes, 37 seconds So if I look at your slide 25, right, where you have the revenue days uh that looks about five 5 to 6% lower than what 21:46 21 minutes, 46 seconds it should have been. I'm guessing we've lost some revenue days on account of our ship being stuck in the state of Hormuz. 21:53 21 minutes, 53 seconds Uh is that correct? And what is the situation correct currently? Sorry, one moment. 22:02 22 minutes, 2 seconds Yeah. So uh we had revenue days also as a function little bit of a dry dog. We 22:09 22 minutes, 9 seconds have uh we have a similar revenue days. Are you looking at this data? 22:14 22 minutes, 14 seconds Is this a slight Yeah. Yeah. I'm I'm I'm talking about this data the the own tonnage number. 22:21 22 minutes, 21 seconds Yeah. Um I think this is just fleet changes during the period because the fleet is might have changed a little bit 22:29 22 minutes, 29 seconds during the period. Uh also you could just have timing differences in dry docks. If you had a couple of extra dry docks this year versus last year that 22:37 22 minutes, 37 seconds could I mean one extra dry dock can easily account for this 20 days because we haven't really grown in capacity right 22:45 22 minutes, 45 seconds so to that extent you'll find some changes you'll find these uh movements on a quarteronquarter basis. 22:53 22 minutes, 53 seconds Got it. And currently do we have any ships stuck in the Gulf? 22:59 22 minutes, 59 seconds We yeah we do have uh two ships that are waiting to come out. One is an owned ship and one is an unchartered ship that are waiting to come out. 23:07 23 minutes, 7 seconds Okay. And I'm would these be earning revenue or not? 23:12 23 minutes, 12 seconds Uh we don't want to one of them is on void charter one is on time charter. uh some of these are uh uh some of these 23:20 23 minutes, 20 seconds are sensitive so we won't go into that but typically time charterships will continue to earn revenue because it 23:27 23 minutes, 27 seconds depends on the time avoid chartership the time is on our count okay okay fair enough uh secondly uh 23:36 23 minutes, 36 seconds given the rates that we've seen especially on the product tanker side in in April uh have we done any sort of 23:45 23 minutes, 45 seconds period fixing or or the time charter hasn't moved as much as the spot rate. 23:51 23 minutes, 51 seconds The time charter rates did move but uh we have not done any period fixing because the time charter rates were very different from the from the spot rates. 24:01 24 minutes, 1 second So while we've not done it in the month of March and April, our product fleet does have a certain amount of coverage on them. Okay. 24:10 24 minutes, 10 seconds Okay. Okay. Got it. And lastly, we have you know three rig pricings uh uh coming up this year. Uh given the the situation 24:18 24 minutes, 18 seconds in the oil market where prices have gone up substantially. 24:22 24 minutes, 22 seconds What is the current day rates on in the market looking like uh uh any recent fixings in the market? What day rates have they come at? 24:33 24 minutes, 33 seconds So we haven't had any recent fixings happening here in our market. uh the not in since the oil price went up obviously 24:42 24 minutes, 42 seconds because these are long lead tenders the fixings that we have seen recently in Nigeria seems to indicate that pricing 24:49 24 minutes, 49 seconds remains firm we saw a recent contract of one of the international rele companies there so it's the rates remain firm but 24:58 24 minutes, 58 seconds again each market is to be seen by itself so we'll just have to see what happens in the next 10 25:07 25 minutes, 7 seconds Got it got it got Lastly just uh just one question on on on the LNG segment. 25:13 25 minutes, 13 seconds Now we've not operated historically in this segment. Uh but given the destruction in LG infrastructure that 25:20 25 minutes, 20 seconds has been seen in Qatar and there could be a potential over supply of ships when the market sort of normalizes. Uh is 25:28 25 minutes, 28 seconds this a segment that we could be looking at? 25:33 25 minutes, 33 seconds um meaning honestly I don't think we will look at this segment. 25:38 25 minutes, 38 seconds Uh is that got to do with the the large sort of capital allocation needed to operate in this segment? 25:44 25 minutes, 44 seconds Yes, generally you know the ticket size is quite large. Uh and you know when you get into this business you'll do a few ships. I think it'll take too much capital from us. I think we've got for 25:53 25 minutes, 53 seconds at least for the sectors we are looking at I think we'll be better placed. And also you know these projects are generally you know backed with long-term 26:00 26 minutes charter. So the uh so the returns on these kind of projects tend to become more like project financing 26:08 26 minutes, 8 seconds and it's sort of the other end of the spectrum from what we do in shipping which is we like to run in the spot market highly liquid assets operating in 26:15 26 minutes, 15 seconds the spot market uh rather than you know long uh you know pipeline type assets 26:22 26 minutes, 22 seconds which are long-term contracts cost of debt based projects. 26:28 26 minutes, 28 seconds Got it. Got it. And all our LPG tankers are currently on uh fixed on time chatter, right? Yes, that's right. 26:36 26 minutes, 36 seconds Okay, got it. Thank you so much. Thank you. 26:39 26 minutes, 39 seconds Thank you. We'll take our next question from Vikram Suryawani from Philip Capital. Please go ahead. 26:49 26 minutes, 49 seconds Vikram, your line is unmuted. Please go ahead with your question. 26:56 26 minutes, 56 seconds Since there is no response, we'll move on to the next question from Siddhart Johan from 361 Capital. 27:04 27 minutes, 4 seconds Siddhhat, please go ahead with your question. Hi Shv, hope I'm audible. Yeah, we can hear you loud and clear. 27:12 27 minutes, 12 seconds Perfect. First, first of all, congratulations on good set of numbers. 27:15 27 minutes, 15 seconds Now, two questions I have. Firstly, how are the day rates shipping up currently versus the previous quarter both in the shipping and rival segment? 27:26 27 minutes, 26 seconds So the driver segment remains uh very strong on LPG also remains extremely 27:33 27 minutes, 33 seconds strong. Uh the crude even if you look at the crude segments while they've come off a bit you know as an absolute level they are still at a very strong level. 27:45 27 minutes, 45 seconds Products have come off a bit more. Uh but you know again you know the thing is in products it's very volatile. So you know I think it would be too much to 27:53 27 minutes, 53 seconds just draw a conclusion from just looking at today's rate. 27:57 27 minutes, 57 seconds But again everything while it's come off from very high numbers. So there's a a very big spike in March April and uh I 28:06 28 minutes, 6 seconds think it's settled down from that spike but still at very high numbers. 28:10 28 minutes, 10 seconds Yeah. Historically all of these are very very high. 28:16 28 minutes, 16 seconds and any sense particularly in dry because I uh it seems that they have firmed up in the last few weeks. 28:24 28 minutes, 24 seconds Uh yeah, you know now there are multitude of factors. If you just certain buy there's been you know more coal trade because certain countries in 28:33 28 minutes, 33 seconds Southeast Asia have been trying to buy more coal because the straight is shut and there's less LNG there's less oil. 28:40 28 minutes, 40 seconds Uh iron or has also been decently strong. grains has been very very strong because China has been continuing to buy 28:48 28 minutes, 48 seconds uh yeah you know boxite I think all the commodities across the board have just been tightening up and the street has not really affected the dry ball trade 28:56 28 minutes, 56 seconds much it's a very small percentage of the overall trade we're seeing certain delays also at ports so congestion has also been built up a bit 29:05 29 minutes, 5 seconds understood thanks and secondly on the offshore segment what's your sense on the overall tender cancellation situ 29:12 29 minutes, 12 seconds situation uh because we were also reading reports that ADAS shell drilling is evaluating whether they want to keep their assets in India or you know take 29:21 29 minutes, 21 seconds it back someplace else. What's exactly happening as per you on shelf? That's a different thing you know because shelf has now merged with 29:30 29 minutes, 30 seconds Addis. So they've now become a very large company of Jackab rigs and so you know and they also do run a fair bit of old rigs. So they you know they're 29:38 29 minutes, 38 seconds probably looking at it at a corporate level. I wouldn't read into them removing the rigs from India to what OGC is doing. I can't comment on their 29:47 29 minutes, 47 seconds corporate strategy though but in OGC they have not processed a few tenders but we have seen the number of rigs that they have currently employing come down 29:56 29 minutes, 56 seconds to one of the lowest levels they've ever had. So we would assume that now at certain point they will now process all these tenders. We currently have an 30:03 30 minutes, 3 seconds active tender going on and given everything else is world right now, you know, oil is uh to secure your 30:11 30 minutes, 11 seconds own supplies is quite in the focus right now of everyone's radar. 30:18 30 minutes, 18 seconds Understood. No, thanks a lot. Thanks a lot. This was very helpful. Sure. Thank you. Thank you. 30:24 30 minutes, 24 seconds Thank you. Next question is from Himmanshu Upaday from Steadfort. Please go ahead. 30:33 30 minutes, 33 seconds Hi, am I audible? Yeah. Yes. Am I sure? Hi. 30:37 30 minutes, 37 seconds Yeah. So, we have this two inch chartered ships if I remember correctly. Both are Sismax. And what is the time? 30:45 30 minutes, 45 seconds One is a Swiss Max and sorry Himanchu just to correct you. One is a Swax, one is an MR tanker. 30:52 30 minutes, 52 seconds Okay. And when does the period end? 30:55 30 minutes, 55 seconds We've still got some time between a one and three years depending on which chapter. 31:01 31 minutes, 1 second And uh is the lease rates also increased quite dramatically means because at one 31:08 31 minutes, 8 seconds point of time the thought was okay we will like to have more least hold tankers where the fleet is pretty low. 31:16 31 minutes, 16 seconds How is the one and three year lease rates have moved in last 3 months or two months? 31:24 31 minutes, 24 seconds Yeah. So it hasn't moved anywhere near as dramatically for these kind of vessels. It hasn't moved anywhere near as dramatically as the spot rates did. 31:33 31 minutes, 33 seconds So maybe a few thousand dollars a day while the spot rates probably moved uh 30 $40,000 a day. So it hasn't really moved that much at all. 31:44 31 minutes, 44 seconds Uh maybe in the so maxes a little bit more for some time uh but in the MRS certainly not it hasn't moved much at all. 31:55 31 minutes, 55 seconds And one more thing on the LPG where generally we have been on the period charters uh with spot rates improving 32:02 32 minutes, 2 seconds would we like to at some means whatever repricing or renewals are to happen in this year would we like to be on spot or 32:10 32 minutes, 10 seconds we like to maintain our LPG focus on period only yeah we would like to run more on spot 32:17 32 minutes, 17 seconds uh we have made a small step in that direction with a floating with an uh floating rate part floating rate charter 32:27 32 minutes, 27 seconds uh on one of our vessels that will start this month sometime. 32:33 32 minutes, 33 seconds Okay. And one more thing on the offshore space uh means logistic space. I think we have around eight ships getting uh 32:41 32 minutes, 41 seconds repriced this year. How is that repricing on the offshore support vessels moved or is the strength 32:49 32 minutes, 49 seconds continuing uh in that market or some thoughts on that because that space has done pretty well for us in last two years? 32:56 32 minutes, 56 seconds Yeah, as of now all the offshore rates are broadly very strong. I think for FI27 we still have about 80 85% of the 33:04 33 minutes, 4 seconds days covered. So some of those repricings will be more closer to the end of the year. So what's also happened and you're right that the space has been 33:12 33 minutes, 12 seconds pretty strong because that business uh has uh shown its best profit since FY 33:19 33 minutes, 19 seconds 2016. So and that's mostly contributed by the offshore vessels business really 33:28 33 minutes, 28 seconds and one thing on the Jacobs okay see one of the liking or uh preference for us 33:36 33 minutes, 36 seconds for Indian market was that we get a period charters okay and two year threeear type of contracts okay but see 33:45 33 minutes, 45 seconds on the order cancellations what has stated that the price has moved quite high and hence uh we are cancelling the 33:54 33 minutes, 54 seconds orders. Okay. So the thought process still remains with that that uh and last two years we have seen continuous 34:01 34 minutes, 1 second cancellations 2 three years four cancellations have happened. Okay. So is it really making sense to be in this market only or you would like now to 34:10 34 minutes, 10 seconds move outside of India also because uh so in bad in good times we don't have the 34:17 34 minutes, 17 seconds rates orc does not give long-term rates and in the spot we are already losing 34:24 34 minutes, 24 seconds out so how does it look or how are you thinking about that segment now now see as of now out of our four rigs 34:32 34 minutes, 32 seconds we have not really idled any of the rigs you know sometimes between contracts We actually had two out of the four rigs with parties other than OMGC. So we 34:41 34 minutes, 41 seconds still see that the market is going to or at least as of now remain strong and uh there is a focus on it. So I think it is 34:48 34 minutes, 48 seconds worth holding on to our expectations. So we are you're right that uh you know OMGC cancelling etc is causing a little 34:58 34 minutes, 58 seconds bit so of requires a little bit of change in our strategy of just focusing on getting those three-year contracts 35:06 35 minutes, 6 seconds and that's why last year we consciously took two short-term contracts for two of our rigs uh to and these were in India 35:15 35 minutes, 15 seconds itself and we have done very well on those contracts also. So again these are new relationships that we are building 35:22 35 minutes, 22 seconds and if these customers have more work we are sure that they will come to us uh because of our track record with them 35:30 35 minutes, 30 seconds and one more thing the private contractors or private companies which are giving shorter term contracts on the 35:37 35 minutes, 37 seconds jackup bricks are those pricing near to international spot rates or they remain depressed in India market the spot rates 35:45 35 minutes, 45 seconds no no I think they are uh reasonably Good. Uh the international spot rates is difficult to assess because each region 35:54 35 minutes, 54 seconds is uh you know has its own cost structure and very different cost structures. These are just not 36:01 36 minutes, 1 second comparable at all. At least for say a three-year contract, you can assess the cost structure and you can make those 36:08 36 minutes, 8 seconds adjustments. On shortterm contracts, it is very difficult to do that comparison. 36:14 36 minutes, 14 seconds So we won't even try. All we'll say is that these are decent rates and they are quite remunerate not high but they are reasonably 36:22 36 minutes, 22 seconds remunerated the means would they be nearer to the 36:29 36 minutes, 29 seconds global rates or something like that or yeah sorry that's a point I'm making that we can't that there is no global 36:37 36 minutes, 37 seconds rate uh so for say first of all the liquidity in these short-term contracts is not very high uh of you know number 36:46 36 minutes, 46 seconds of fixings sometimes they don't get reported so our contract itself may not have been reported elsewhere so and the 36:53 36 minutes, 53 seconds second thing is even if you get a rate reported it's very difficult to know what is the cost structure in that 36:59 36 minutes, 59 seconds contract on the mob and de mo etc you know sometimes in those local markets you have to share some of the 37:07 37 minutes, 7 seconds topline rate with local partners uh sometimes there is you know you have to prep when you get onto these contracts globally or even in India there are 37:16 37 minutes, 16 seconds certain specific requirements by the charters. So you have to spend some money up front to get those rigs ready for those contracts. So every time you 37:23 37 minutes, 23 seconds get into that you have to look at that entire process to really understand what does that headline rate lead to uh a comparable rate for India? 37:34 37 minutes, 34 seconds And one small question are all the logistics ship on the offshore side in India only or they are few outside India also currently how are they positioned? 37:44 37 minutes, 44 seconds Uh there there are a few ships outside India and a few and but most of them are in India. 37:49 37 minutes, 49 seconds So we have four we had five we now have four vessels operating outside India and this is all across the world. 37:58 37 minutes, 58 seconds Okay. Okay. Thank you. Thank you very much. 38:02 38 minutes, 2 seconds Thank you. Next question is from Vikram Suryawani from Philip Capital. Please go ahead. 38:09 38 minutes, 9 seconds Uh hope I'm audible now. Yes. Yes. Please go ahead. 38:13 38 minutes, 13 seconds Okay. Great. Yeah, thanks sir. Uh sir, what we are seeing is that uh the order book has now started building up. Uh so 38:20 38 minutes, 20 seconds uh how is that uh uh capac shipyard capacities available for further ordering and probably are we seeing that 38:28 38 minutes, 28 seconds uh cycle of order book increasing going again because the way the kind of money shipping companies have made uh in last 38:35 38 minutes, 35 seconds three to four years and probably uh uh the situation what we are looking in terms of continuous demand disruption. 38:42 38 minutes, 42 seconds So if you comment on I think that in terms of order book and shing capacity would be helpful. 38:48 38 minutes, 48 seconds Yeah. So the order book is building up especially for crew tankers in the last and that too especially for VCC's in the 38:56 38 minutes, 56 seconds last few months. Uh the yard capacity is not grown that much. It's just that the slots are getting filled up. you know 39:04 39 minutes, 4 seconds the they the slots were not available for building these ships in this period for I think three to four years because 39:11 39 minutes, 11 seconds all the slots were or the large slots were getting taken up by the big container ships and by LG ships. Uh now 39:20 39 minutes, 20 seconds that that ordering is not as extreme these slots are becoming available. So it's not a huge increase in shipyard 39:27 39 minutes, 27 seconds capacity is just a movement that more of it is available for these large crew tankers. 39:33 39 minutes, 33 seconds It's yes it is building up. There is as we showed there is still a significant part of the fleet which is old. So 39:40 39 minutes, 40 seconds that's something to consider. But yes having more of an order book versus 6 months ago makes you uh maybe a little more 39:49 39 minutes, 49 seconds concerned about what can happen to the market balance. But this is again 27 28 39:56 39 minutes, 56 seconds kind of deliveries. And now if you probably need in 20 you'll get a ship in 29 40:04 40 minutes, 4 seconds right and in off said uh are we seeing like some cold stacking fleet is coming back? 40:12 40 minutes, 12 seconds Not really. Not cold stack. No, not really. We've not seen any movement on that. 40:20 40 minutes, 20 seconds Okay. And just a last on clarification on one of your comment because I think our preference is always to keep uh uh 40:27 40 minutes, 27 seconds capacity more on spot but however if you are we open to short the market at some point in the time or our preference will 40:35 40 minutes, 35 seconds always be to play through the cycle in which always remains Sorry. 40:42 40 minutes, 42 seconds Yes sir. You please continue because I think probably the way we are seeing the uh ship super ship cycle 40:50 40 minutes, 50 seconds probably asset play could come with a much longer lag. So that was that's why the reason I was asking 40:57 40 minutes, 57 seconds so we predominantly remain spot. Of course opportunistically we do take time charters but from what we have seen that 41:04 41 minutes, 4 seconds even when the markets are very high uh generally when you go for a time charter rate contract they're in backwardation. 41:10 41 minutes, 10 seconds So which means that just as a example if the spot market is earning 100 and you want a time charter say for one or two years the longer you go the lower the 41:19 41 minutes, 19 seconds rate becomes you may get it for 80 or 70 or some lower number. So up front you're giving up something uh to take that 41:26 41 minutes, 26 seconds cover. So we generally don't prefer to take that and as we have mentioned you know on these calls the markets especially in shipping are so volatile 41:35 41 minutes, 35 seconds that very often you know you can believe you can you know that maybe 100 will average 60 and so you should take the cover at 70 and eventually the market 41:43 41 minutes, 43 seconds ends up at 120. So you know when when the markets are this volatile I think sometimes shorting it uh can maybe do uh 41:52 41 minutes, 52 seconds more harm than good and that's sir. Thank you. 41:58 41 minutes, 58 seconds Thank you. We have a text question from Di Agraal from FCOM family office. The 42:05 42 minutes, 5 seconds first question is could you help us understand the reason behind it and also what is the fleet exposure between spot market and time charter contracts? 42:15 42 minutes, 15 seconds Second question is should we expect the benefit of higher freight rates to be reflected more meaningfully from Q1 FY27 onwards? 42:25 42 minutes, 25 seconds Uh so we are generally you know we our time charting activity will be below 20% like I just mentioned we always prefer 42:31 42 minutes, 31 seconds to remain spot and uh you know still a long quarter to go. We're not going to forecast uh the Q1 uh numbers. 42:42 42 minutes, 42 seconds Thank you. Next question is from Hersh C an individual investor. What parameters does management take into account while 42:51 42 minutes, 51 seconds doing the switch transactions? The vessel value seems to have increased when compared to last year despite that company acquired higher amount of ships. 43:00 43 minutes How much impairment would have to be recognized on new vessels as market corrects? 43:08 43 minutes, 8 seconds So uh we we look at uh the timing of the switches is dictated by the ships that 43:15 43 minutes, 15 seconds need to be sold. When the ship needs to be sold that is we cannot use it to service our customers in the 43:23 43 minutes, 23 seconds international market we look to sell the ship. If we are looking to sell a ship we will also look to replace the ship 43:30 43 minutes, 30 seconds with a more modern vessel which can be used to trade in the international market uh with our customers. So the 43:40 43 minutes, 40 seconds timing is more decided by the uh the ship that needs to be sold. the price uh 43:47 43 minutes, 47 seconds is actually just a function of how many transactions we did last year. And if uh if you're looking at how much we spent 43:56 43 minutes, 56 seconds in FI25 versus FI26, it's because two bulk carriers which we sold last year, we did not replace in FI25. We actually replaced them in FI26. 44:08 44 minutes, 8 seconds Uh because it was just a question of timing the purchase of those ships and getting some good ships to buy. So 44:15 44 minutes, 15 seconds that's one factor which can happen which is just a timing mismatch between two years. Uh as to the impairment uh we 44:23 44 minutes, 23 seconds don't know uh whether we will have to recognize any impairment at all because this is a function of what happens to 44:30 44 minutes, 30 seconds the market price of the ship. It is also measured by the earning capacity of the ships. So there are a lot of factors 44:38 44 minutes, 38 seconds which get into the impairment uh into the impairment calculation and uh so it's difficult to comment on whether we 44:46 44 minutes, 46 seconds will have at all and how much if we do how much will have to be uh recognized. 44:53 44 minutes, 53 seconds Thank you. We'll take our next live question from Raj Shen an individual investor. Please go ahead. 45:01 45 minutes, 1 second Hi sir. Uh thanks for the opportunity. 45:04 45 minutes, 4 seconds Uh uh uh so I I just joined late so if the question is already answered you can let me know. Uh I mean I can go through the recording again but I just uh wanted 45:12 45 minutes, 12 seconds to know that uh when the ships got stuck in the state of Hormuz. Okay. So uh did G ship lose any revenue for the stuck 45:20 45 minutes, 20 seconds days or or was the trip on a per day basis and it continued to earn for the stuck days? 45:27 45 minutes, 27 seconds Okay, we have one ship which is not on a per day basis and which where the time is on our account. So the lost days are 45:35 45 minutes, 35 seconds on our account. So we lose revenue on that ship. 45:40 45 minutes, 40 seconds Okay. So So that is on one ship. But uh I believe there were a few other ships which were stuck for a few days. 45:46 45 minutes, 46 seconds Yeah. All other ships are on time charter. So they continue to earn uh in that time. 45:53 45 minutes, 53 seconds Okay. Uh uh so they would have continued to earn on per day basis even for the stuck days for the time. 45:57 45 minutes, 57 seconds That's right. So then yeah that's correct. Okay. And so I have a strategy question. 46:04 46 minutes, 4 seconds So uh if the company wants to be in spot market which is your your preferred mode right uh to take and and that would be 46:12 46 minutes, 12 seconds to to take advantage of uh the disruptions or volatility right so 46:18 46 minutes, 18 seconds shouldn't you be more uh positioned on the longer whole routes uh instead of the regional roots because I think the 46:26 46 minutes, 26 seconds longer roots give more volatility and more upside and are more prone to disruption right no there's no pattern between the short 46:34 46 minutes, 34 seconds and long haul rules. It all depends on how the trade is evolving and then based on how the trade is evolving, we evolve our trading patterns accordingly. 46:42 46 minutes, 42 seconds And also it is not that we trade only on short hall routes. We do long haul uh trades as well. 46:48 46 minutes, 48 seconds Yeah, we we are agnostic to which route we take. We change it based on our view on what which routes would be better to uh trade in. 46:56 46 minutes, 56 seconds Yeah. But I was looking at your fleet composition. So for example, you own let's say maybe two cap size but you own 47:02 47 minutes, 2 seconds a number of kamsar max or you know the the the shorter distance type of vehicles right so you you are positioned 47:10 47 minutes, 10 seconds more on the shorter routes by looking at your fleet profile I got that impression basically no it's you know you are seeing the size 47:18 47 minutes, 18 seconds of the ships right because there's one camax 80,000 and capes are 180,000 but that doesn't mean that they do shorter routes camaxes for example do routes 47:26 47 minutes, 26 seconds from China to Latin America and back that can be a 100 days. Cape sizes can al can do those routes for different 47:34 47 minutes, 34 seconds cargos but they can also do Australia, China which is about uh 30 40 days. So you know even capes can do shorter routes. 47:43 47 minutes, 43 seconds So there is no linkage between the size of the ship and the route size. If you take on the sewaxes which are large crew tankers, they can do routes from Middle 47:52 47 minutes, 52 seconds East to Jamnagar. Those round voyages are 20 days. 47:57 47 minutes, 57 seconds Okay. Right. So there's no linkage between the size of the ship and the length of the route. 48:03 48 minutes, 3 seconds Okay. And so uh in this I mean post Iran war the tanker rates attractive enough 48:10 48 minutes, 10 seconds to uh to promp the uh clean to dirty switch over did it actually happen and if yes did G ship actually do the switch 48:17 48 minutes, 17 seconds over from clean to dirty was it a profitable proposition? 48:24 48 minutes, 24 seconds So we have we have seen ships trade uh many ship owners have converted a lot of the LR2s into Afroaxes. Generally the 48:32 48 minutes, 32 seconds switching only really happens on this sector where the LR2s and Afroaxes are switch between clean and dirty. And we also have switched a couple of vessels to dirty. 48:43 48 minutes, 43 seconds Okay. And I believe uh the time when you want to switch back from dirty to to clean there is some cost of that right. 48:51 48 minutes, 51 seconds uh I mean so overall uh it is uh uh a very profitable even after accounting for the cost of switching back right 48:58 48 minutes, 58 seconds yes that's right okay uh fine sir and uh just one more 49:07 49 minutes, 7 seconds question so now your console NB is close to 1,800 and uh do you feel it is sustainable for the next few quarters so 49:15 49 minutes, 15 seconds so even if the fleet value drops okay but your earnings will keep propping up the the NAB Right. So, so, so at a very 49:24 49 minutes, 24 seconds high level the NAB should not drop significantly even if it doesn't increase. Right? I mean the chances are more of increasing the NAV but but even 49:31 49 minutes, 31 seconds if the cycle turns or these disruptions go away uh still uh the NAV would more or less sustain at least the current 49:39 49 minutes, 39 seconds levels right so uh let's look at this uh it depends on how uh a drop in value of ships 49:48 49 minutes, 48 seconds whether it happens in a short period or a long period what you're describing is when the drop let's just say a drop of 49:56 49 minutes, 56 seconds $200 million happens in the fleet value. Now you know what our earnings were in the last year. 50:03 50 minutes, 3 seconds Our cash earnings were more than $300 million. 50:06 50 minutes, 6 seconds Okay? And therefore it can absorb this drop of $200 million in a year. This we're talking about a year. Now if the same 200 million drop happens in one 50:15 50 minutes, 15 seconds quarter then you cannot absorb that if your run rate is $75 million a quarter. 50:22 50 minutes, 22 seconds But yes, the advantage in our business is this NAV and the point you've identified is correct. the NAV con keeps 50:30 50 minutes, 30 seconds converting into cash because a ship earns cash and therefore a significant 50:37 50 minutes, 37 seconds portion of the uh ship price or the NAV will keep coming in as cash flows which 50:44 50 minutes, 44 seconds is a point we made in the presentation that large part of it is NAV improvement is actual cash earnings itself. 50:53 50 minutes, 53 seconds Okay, fine. My last question. So I I was going through the con calls of some US listed shipping companies uh Scorpio tankers and there are quite a few more. 51:02 51 minutes, 2 seconds Okay, they they're also trading at a similar price to NAB. Okay, maybe 1 1.1 or a similar range. But but they have 51:10 51 minutes, 10 seconds announced very large buybacks. Okay, so I think you know the last quarter they did buy back of $100 million and I think this quarter they have announced $500 51:16 51 minutes, 16 seconds million, right? If I'm not wrong. So uh when they see value uh in announcing buybacks at a similar price to an AV uh 51:25 51 minutes, 25 seconds why does D ship not uh see value in announcing buybacks at at a similar uh point? Yeah, this is my last question. 51:33 51 minutes, 33 seconds So I I won't comment on because different companies have different approaches. Uh our approach is of a value buyer. There are al also 51:40 51 minutes, 40 seconds companies. So first is I don't know who has done this and $500 million buyback. 51:46 51 minutes, 46 seconds I haven't really seen but different companies have different approaches to investment. Our approach is a fairly conservative investor where we buy at 51:54 51 minutes, 54 seconds certain levels. This goes for whatever it is whatever capital allocation we make we buy only at certain prices even 52:02 52 minutes, 2 seconds in ships different companies just some companies just will just keep buying irrespective of the market buying ships 52:10 52 minutes, 10 seconds I'm talking about. So everybody has different investment philosophy uh and we really wouldn't like to get into whether ours is better or theirs. This 52:19 52 minutes, 19 seconds is something which has served us well over many decades and so we stick with this. 52:26 52 minutes, 26 seconds Okay. Uh can I squeeze in one more question or uh should I quick one? Yeah. So, so compared to 52:34 52 minutes, 34 seconds compared to March ending rates, I mean we have been hearing in or or reading in the industry that uh tanker rates subsequently shot up significantly in in 52:43 52 minutes, 43 seconds April and May and even the dry bulk the entire spectrum of ships across the dry bulk they have also you know started 52:51 52 minutes, 51 seconds participating in this uh in this you know fright movement. Uh so uh so so your comment on that and whether gas 53:00 53 minutes based ships okay they are the only ones which are not participated in this flight increase and have all other sectors uh seen significant increase compared to the March rates? 53:12 53 minutes, 12 seconds No in fact actually LPG has done one of the best. The rates are still extremely high. LPG has done uh yeah close to alltime highs. 53:21 53 minutes, 21 seconds Close to alltime highs. No probably alltime highs. 53:25 53 minutes, 25 seconds Oh, that's great. Okay. A and the tanker and the dry bulk, they are also at a higher levels compared to Marsh and and 53:33 53 minutes, 33 seconds significantly higher levels. U can I say that? 53:36 53 minutes, 36 seconds Uh dry bulk is uh crude and products are not as high as the peak we saw in March and April, but they're still very very strong. 53:45 53 minutes, 45 seconds Okay. 53:47 53 minutes, 47 seconds All right, sir. Okay. Yeah, that's very helpful. Thank you. Thank you. 53:51 53 minutes, 51 seconds Thank you. Next question is from Anoj Sharma from Steford Investment Managers. Please go ahead. 54:01 54 minutes, 1 second Anoj, your line is unmuted. Please go ahead with your question. Yeah. Yeah. Hi. Am I audible now? Yes. 54:08 54 minutes, 8 seconds Yes. Yeah. So, so my question is on the on the offshore rig. Uh is there a possibility that OGC comes out with a 54:18 54 minutes, 18 seconds tender but due to our short-term engagement our rigs are not available for those auctions? 54:24 54 minutes, 24 seconds Yeah, it's certainly a possibility. It is not. So currently we have a rig available and generally OMGC gives a 180 54:33 54 minutes, 33 seconds day period for uh delivery of the rig into the contract. So that's not something which is likely to arise. I 54:41 54 minutes, 41 seconds mean, it could happen, but because it's a short-term contract, by definition, it'll hopefully get over in 180 days. 54:50 54 minutes, 50 seconds And my next question is on the on the jackup rates. So, the order book continues to be low. Is it due to uncertainty in 54:58 54 minutes, 58 seconds demand or the or the shipyards are not ready with capacities to deliver? What's what's more of the probability? 55:07 55 minutes, 7 seconds Maybe a bit of both. Yeah, a bit of both. a yard capacity has got completely uh uh curtailed. Yeah. 55:14 55 minutes, 14 seconds Yeah. You know, because since 2014, we've not really seen any real orders for the jackup, you know, but having said that, we've always seen in our business that if there was sufficient 55:22 55 minutes, 22 seconds demand for those jackup, someone will come to build it. There could be yards which we've not heard of, but you know, China does have lot of other capacity 55:30 55 minutes, 30 seconds and I'm sure someone would build it. But at least as of today, we've not seen a lot of interest in trying to even go and 55:38 55 minutes, 38 seconds ask those yards uh to build. I think the rates would be substantially higher before that level of optimism comes to go and build more rigs. 55:49 55 minutes, 49 seconds All right. And just on OGC auctions, any timelines, any new timelines for the auctions or nothing? 55:55 55 minutes, 55 seconds No, they've not given we have an ongoing tender, but how long it takes to be processed? Uh we are not sure. Okay, thank you so much. Thank you. 56:05 56 minutes, 5 seconds Thank you. 56:07 56 minutes, 7 seconds Thank you. We have a text question from Nirshade from MK Global. What is a better option? First, running ships on 56:16 56 minutes, 16 seconds long-term time charter with debt or second running ships on spot without debt over the long term. What gives better ROE? 56:26 56 minutes, 26 seconds This is a good question. We have actually you know studied history and tried to see that which model would work better. We've always found the latter to be better. Um and it's not without debt. 56:38 56 minutes, 38 seconds It's with less debt. So it just depends on you know your level level of debt. We have shipping companies you know if you look at global shipping companies they 56:47 56 minutes, 47 seconds you know a lot of companies run largely spot but the amount of debt they take varies and one can always you know debate what that level of debt should 56:55 56 minutes, 55 seconds be. If you want to compare that to the first model, uh you know what we have seen and what I mentioned earlier on this call that uh we have seen spot 57:05 57 minutes, 5 seconds rates tend to outperform the time charter rates uh for a variety of reasons and so then to compensate for that you would have to take a lot more 57:12 57 minutes, 12 seconds debt. We find that a riskier strategy and I think we're just better at playing the second option. 57:20 57 minutes, 20 seconds Thank you. 57:22 57 minutes, 22 seconds Next question is from Meit Parik from Mihir Asia and company. Previously management had guided that the buyback was not tenable due to adverse taxation. 57:33 57 minutes, 33 seconds Now that the tax norms have changed, why not consider a buyback? 57:39 57 minutes, 39 seconds It's a function of the price really. Uh and as with everything the uh in this 57:46 57 minutes, 46 seconds capital allocation as well uh it's a function of the price. So you're right that one of the biggest impediments has 57:54 57 minutes, 54 seconds been removed but uh again everything is at a price uh and when appropriate. 58:02 58 minutes, 2 seconds Thank you. 58:05 58 minutes, 5 seconds Next question is from Alokiad. He's not mentioned his company name. Can the management confirm the outstanding loan from GECO 58:14 58 minutes, 14 seconds to GIL for March 26? As for financials, there was loan provided from 425 cr and 58:22 58 minutes, 22 seconds repayment of 125 cr but the outstanding loan seems to be more than 425 cr which was the original loan. What's the 58:31 58 minutes, 31 seconds timeline by when g plans to become debtree? 58:35 58 minutes, 35 seconds There were two loans uh one was 65 crores and one was 425 crores. As of 31st March the loan outstanding was 392 58:44 58 minutes, 44 seconds crores. There were also uh an old preference share which was uh subscribed 58:50 58 minutes, 50 seconds by the parent uh which is 272 crores as of March 2026. 59:00 59 minutes Thank you. 59:02 59 minutes, 2 seconds We'll take our next question from Rajes Yen, an individual investor. Please go ahead. 59:08 59 minutes, 8 seconds Yes sir. Uh thanks for the followup. So um uh any particular reason you have never bought in the last few years since I started tracking your company you have 59:16 59 minutes, 16 seconds never purchased a VLCC because we keep hearing in the news uh a very sharp spike in WCC sometimes u they are 59:25 59 minutes, 25 seconds probably the the major beneficiary of of some rate increases compared to the other vessels but you have never owned a 59:32 59 minutes, 32 seconds WCC till now so can you we have owned a WCC in the past and there is no uh particular reason that we 59:40 59 minutes, 40 seconds have chosen to stay out of that segment and I'm sure that in the future we will be in that segment. Uh but if you see you know from 2022 when the Russian war 59:49 59 minutes, 49 seconds took place and the market significantly tightened that was a Swiss Max and Afroax story. So for the first few years 59:55 59 minutes, 55 seconds you know from 22 till maybe 25 end the Swiss Maxes and Aphroaxes have 1:00:02 1 hour, 2 seconds outperformed the VCC's considerably. uh the VCC's really came into their own maybe in the last six to nine months. 1:00:10 1 hour, 10 seconds Yeah, something like that. And since then those rates have gone up a lot. But if you take over this four-year period, it has been better served to be in these the other two segments. 1:00:20 1 hour, 20 seconds But again, this is not to say that we don't want to own VCC. 1:00:24 1 hour, 24 seconds Yeah, I'm sure in the future we'll get into it. But again, it depends on, you know, getting the liquidity of the ship and what you're buying. If you, you know, get better deals on the Smaxes, we may buy more S maxes. 1:00:35 1 hour, 35 seconds Okay. But but by not u by not owning a WCC, don't you lose out on I mean I just wanted to correct my understanding. So 1:00:43 1 hour, 43 seconds uh are there certain routes on which VCC are more suitable and you lose out on or you don't participate in those uh trips 1:00:50 1 hour, 50 seconds because you don't own a VCC and and no other you know ship type can can fulfill that trip basically. Is it like that or not? Uh no not exactly like so say for 1:01:00 1 hour, 1 minute example VLCC's do a large amount of trade from the Middle East but it's but the Swiss Maxes also do trade on the Middle East. So if you're taking caros 1:01:08 1 hour, 1 minute, 8 seconds from the Middle East to India or you know somewhere else the SE maxes also maybe the VCC's do more of that trade than the S maxes but you know what 1:01:17 1 hour, 1 minute, 17 seconds you've seen over a long period of time you have to look at the price at which you've entered each one of those sectors that is more relevant than saying okay I need to be participating in one 1:01:25 1 hour, 1 minute, 25 seconds particular trade over the other and what also happens in the cases of ELCC's is that they hit the headlines more often 1:01:33 1 hour, 1 minute, 33 seconds but soles also tend to move in tandem with VCC's because typically a VCC 1:01:41 1 hour, 1 minute, 41 seconds carries 2 million barrels of crude oil while a max carries a million barrels. 1:01:46 1 hour, 1 minute, 46 seconds If there is too much of a differential between the two uh customers will tend to will try to 1:01:53 1 hour, 1 minute, 53 seconds split the cargo between from one VCC to two Swiss Maxes. So then the price will become more or less 1:02:02 1 hour, 2 minutes, 2 seconds will become closer then. So it can't be too dislocated uh for too long. 1:02:10 1 hour, 2 minutes, 10 seconds Okay. So two more short questions. So when are the gas carriers coming up for reprising? I believe all your gas carriers are on time charter, right? 1:02:20 1 hour, 2 minutes, 20 seconds That's right. 1:02:22 1 hour, 2 minutes, 22 seconds Yeah. So one one mentioned earlier on this call we have fixed and she'll be delivered shortly. Uh the other one is in the next few months. So we'll we have some time to decide. 1:02:33 1 hour, 2 minutes, 33 seconds Okay. And is it safe to say that they will be repriced at least you know maybe I mean assuming current rates they will be repriced at least 50% higher than the uh than the earlier time rates. 1:02:44 1 hour, 2 minutes, 44 seconds Uh we can't comment on uh what rates you will get once she's okay. So so in other words are the 1:02:50 1 hour, 2 minutes, 50 seconds current time rates uh today uh 50% higher than the time rates they were contracted for earlier? 1:02:57 1 hour, 2 minutes, 57 seconds Uh no no okay they're lesser than 50%. Okay. Yeah. Yeah. 1:03:05 1 hour, 3 minutes, 5 seconds They were contacted at very very very high rates. Yeah. Oh, okay. Nice. Okay. That's great. 1:03:11 1 hour, 3 minutes, 11 seconds Okay. So, uh any detail you can give on your inch chartered ships because we see that line item but but that's a black box. You know, what are the ships you 1:03:19 1 hour, 3 minutes, 19 seconds you uh you have inchartered? Okay. What are the categories and what are the tonnages? I mean any details on the uncharted ships and do you plan to grow this uh yeah this segment? 1:03:31 1 hour, 3 minutes, 31 seconds So we have two ships on inch charter. 1:03:33 1 hour, 3 minutes, 33 seconds Both are tankers. One is an MR product tanker. One is a SOS max crude tanker. 1:03:38 1 hour, 3 minutes, 38 seconds There are only two vessels on inch charter. Uh it was done to because there was a certain opportunity 1:03:46 1 hour, 3 minutes, 46 seconds as part of a switching strategy. Instead of buying a ship, we incharter. Uh and yes, we could look at it. We used to 1:03:54 1 hour, 3 minutes, 54 seconds have a significant inchartering operation 15 plus years ago. uh and uh if the opportunity arises certainly 1:04:02 1 hour, 4 minutes, 2 seconds we'll look at doing more everything is subject to price of course. 1:04:08 1 hour, 4 minutes, 8 seconds So your operating margins on owned ships versus incharted ships obviously they will be quite different but can you give 1:04:15 1 hour, 4 minutes, 15 seconds some idea what is the operating margin on inchartered ships? 1:04:19 1 hour, 4 minutes, 19 seconds There is no number here. So let's say you you encharter a ship at $30,000 a day. Now the ship could earn 25 or it 1:04:26 1 hour, 4 minutes, 26 seconds could earn 35 or it could earn $50,000 a day. So because we don't have a fixed it's not that we have 1:04:34 1 hour, 4 minutes, 34 seconds I'll rephrase uh I I'll rephrase my question. Sorry to interrupt you. I'll rephrase my question. So so I was asking about the actual operating margins let's 1:04:41 1 hour, 4 minutes, 41 seconds say for the March quarter. I mean it'll be much much lower for an incher ship because in the operating margin of 1:04:49 1 hour, 4 minutes, 49 seconds an owned vessel basically you only deduct the operating expenses. Correct. Correct. 1:04:55 1 hour, 4 minutes, 55 seconds When you're looking at the operating margin, when you're looking at an unchartered ship, you have to deduct not just the operating expenses of the 1:05:02 1 hour, 5 minutes, 2 seconds owner, but also his capital recovery, his interest, his depreciation, maybe his loan repayment cost as well. And 1:05:09 1 hour, 5 minutes, 9 seconds therefore, the cost base itself becomes much higher. So the quick answer is the operating margin profile of an 1:05:17 1 hour, 5 minutes, 17 seconds unchartered ship is very different. the operating margins will be much lower than for an owned vessel because by 1:05:25 1 hour, 5 minutes, 25 seconds definition they would not be chartering to us at operating at opex. 1:05:30 1 hour, 5 minutes, 30 seconds Correct. So for example your uh operating margin for the owned vessels was let's say 58 or 60% something like 1:05:37 1 hour, 5 minutes, 37 seconds that. So for incharterships would it be like 15 20%. 1:05:42 1 hour, 5 minutes, 42 seconds Again it depends on the rate. If you inched it in one quarter it could be incharted at 30,000 one quarter it could earn 25,000 in the next quarter it could 1:05:50 1 hour, 5 minutes, 50 seconds earn 40,000. So there is no so it is very difficult to put a number to answer your question. 1:05:59 1 hour, 5 minutes, 59 seconds So so I'm asking only about the actual numbers of the March quarter not a a projection or positive. So one minute so they are 1:06:06 1 hour, 6 minutes, 6 seconds positive. Let's say that you have a so max in our own so maxes. So let's say we have two SU we have an uncharted SOS max 1:06:14 1 hour, 6 minutes, 14 seconds we have a an owned SOS max. The owned SUS max operating expenses could be maybe between $6 and $8,000 a day. The 1:06:23 1 hour, 6 minutes, 23 seconds inch charter rate is not $6 to $8,000 a day. They would earn very similar rates. 1:06:31 1 hour, 6 minutes, 31 seconds It's not very different. One is an eco ship. So there may be a marginal difference in their earnings. Let's say both of them earn $60,000 a day. In the 1:06:40 1 hour, 6 minutes, 40 seconds case of the owned vessel, the operating margin is $60,000 minus $8,000 a day. In the case of the uncharted vessel, and I 1:06:47 1 hour, 6 minutes, 47 seconds cannot mention the actual rate at which we have incharted the ship, but let's call it $30,000 a day. So, your margin 1:06:55 1 hour, 6 minutes, 55 seconds is only $30,000 a day on the uncharted vessel. So, that's the difference between the two because the cost base of 1:07:02 1 hour, 7 minutes, 2 seconds an uncharted vessel by definition is higher than the cost base of an owned vessel. 1:07:08 1 hour, 7 minutes, 8 seconds Yeah. 1:07:12 1 hour, 7 minutes, 12 seconds Sir, I was going through uh the the crash the cash break even uh level uh of some of the US companies, US listed 1:07:21 1 hour, 7 minutes, 21 seconds shipping companies. They disclose it was close to $11,000 uh dollar per day for their entire fleet. So, so can you disclose your cash break even levels for 1:07:30 1 hour, 7 minutes, 30 seconds your entire fleet? Uh today our our book break even levels are probably around $12,000 a day. between 11 and 1:07:37 1 hour, 7 minutes, 37 seconds $12,000 a day. Our cash break even is probably in the9.5,000 a day. Something like that. 1:07:47 1 hour, 7 minutes, 47 seconds Okay. 1:07:48 1 hour, 7 minutes, 48 seconds Maybe $9,000 a day because we also have a lot of other income uh from the treasury. Yeah. 1:07:53 1 hour, 7 minutes, 53 seconds So, anything beyond that 10,000 11,000 $12,000 rate uh I mean primarily it flows to the bottom line, right? I mean 1:08:02 1 hour, 8 minutes, 2 seconds yes. Um this is yeah this is cash break even uh it'll flow to cash flows but yeah a book 1:08:09 1 hour, 8 minutes, 9 seconds break even will be maybe $12,000 a day for the fleet across the fleet. 1:08:15 1 hour, 8 minutes, 15 seconds Okay so beyond 12,000 uh the entire number flows to the bottom line that is correct. 1:08:22 1 hour, 8 minutes, 22 seconds Okay sir. Okay. And that is across the entire fleet right? 1:08:25 1 hour, 8 minutes, 25 seconds That is a blended rate for the entire fleet. Yes. Yes. Okay. Okay. Thanks a lot. Thank you so much. Thank you. 1:08:33 1 hour, 8 minutes, 33 seconds Thank you. Next question is from Karan Batalia from Miq Capital. Please go ahead. 1:08:42 1 hour, 8 minutes, 42 seconds Yeah, I saw congratulations for great set of results. 1:08:46 1 hour, 8 minutes, 46 seconds So uh you have reached a significant cache position this quarter but we are also seeing you know the freight rate 1:08:54 1 hour, 8 minutes, 54 seconds staying at multi-year high rise and which in turn has also increased the vessel prices. Now given the parts of the fleet are aging, I'm just trying to 1:09:03 1 hour, 9 minutes, 3 seconds understand your philosophy as to whether you are comfortable to buying tonnage at these levels to capture the current 1:09:09 1 hour, 9 minutes, 9 seconds yields or do you feel the IR is too thin or if you decide to wait for a correction maybe what is a plan for the excess cash which you have generated. 1:09:20 1 hour, 9 minutes, 20 seconds buying. So uh see if it is a question of switching where if we have to sell a ship and replace it then we will do it 1:09:29 1 hour, 9 minutes, 29 seconds because we have a certain market presence which we have to maintain. So that is something that we will continue 1:09:36 1 hour, 9 minutes, 36 seconds to do. Your question I take it is on buying an incremental ship that is for growth. Is that right? Switching we will 1:09:45 1 hour, 9 minutes, 45 seconds do because we have decided not to go below a certain level. Okay. 1:09:51 1 hour, 9 minutes, 51 seconds Either way, sad either increasing or maybe replacing it. I mean, we have been replacing a lot. At least we will continue to do. 1:10:00 1 hour, 10 minutes Yeah. 1:10:01 1 hour, 10 minutes, 1 second Increasing we will not go for current yield. Yeah. 1:10:06 1 hour, 10 minutes, 6 seconds Because you know when you're doing a switch, it's a very different thing from doing incremental. When you're switching, you're buying at a high level, but you're also selling at a high 1:10:14 1 hour, 10 minutes, 14 seconds level. When you're buying incremental, you're just buying at a high level. So you have to look at them very very differently. 1:10:20 1 hour, 10 minutes, 20 seconds Correct. But sir, don't you think we also have the opportunity to capture the current yields. 1:10:26 1 hour, 10 minutes, 26 seconds Uh yes, but you know current yields can change. You have to look at the business from a more longer term point of view. 1:10:33 1 hour, 10 minutes, 33 seconds Typically current yield is a bit of a trap. Yeah. And we've seen cycles. Yeah. 1:10:38 1 hour, 10 minutes, 38 seconds So you have to see what best serves you more in the long term. 1:10:40 1 hour, 10 minutes, 40 seconds We've bought uh I think we've done best on the projects where we've bought when current yield was close to zero. 1:10:48 1 hour, 10 minutes, 48 seconds Got it. Got it. Thank you all the Thank you. 1:10:52 1 hour, 10 minutes, 52 seconds Thank you. We'll take one text question from me Parik from Mihir Asia and company. At what level of discount to 1:11:00 1 hour, 11 minutes NAV would the company consider the value of buyback to be attractive? Also, would a lower fleet age lead to better TCYs? 1:11:11 1 hour, 11 minutes, 11 seconds uh we can't comment on the uh first part of this question and the second one would a lower fleet age lead to better 1:11:18 1 hour, 11 minutes, 18 seconds TCI no not really there is something on the fuel economics but uh I think uh the price at which you 1:11:28 1 hour, 11 minutes, 28 seconds enter and the segments at which you which you enter I think that's the most important 1:11:34 1 hour, 11 minutes, 34 seconds thank you we have me on the line meet has your question been answered Yeah, my question has been answered. 1:11:43 1 hour, 11 minutes, 43 seconds Thank you so much. Thank you. Thank you. 1:11:47 1 hour, 11 minutes, 47 seconds There's one more text question from Hersh C. An individual investor would like to understand the management's thought on reasons because of which the 1:11:56 1 hour, 11 minutes, 56 seconds spot market outperforms time market over longer period. Is spot market better suited to be the vessel to marginal 1:12:04 1 hour, 12 minutes, 4 seconds commodities traded which usually balances demand and supply and hence have better pricing power. 1:12:12 1 hour, 12 minutes, 12 seconds Um it's a bit of a difficult question to know why it outperforms. It's just that you know in the spot market because our business is driven by a multitude of 1:12:20 1 hour, 12 minutes, 20 seconds events and sometimes those events can take up the market up significantly. So as you can see you know when the Russian 1:12:28 1 hour, 12 minutes, 28 seconds war took place uh you know the freight rates changed 2 3x. So when you can have that kind of change in the underlying 1:12:35 1 hour, 12 minutes, 35 seconds market then you know when you're generally taking a time charter activity they will be within a narrow band. And if the market moves that dramatically 1:12:45 1 hour, 12 minutes, 45 seconds then you'll be caught short. And so you know of course like we can't say that every time that happens but if you look at a longer period of time when it does 1:12:53 1 hour, 12 minutes, 53 seconds happen because the markets move up that significantly then over a longer period of time you see the spot outperform the time chattering market. 1:13:02 1 hour, 13 minutes, 2 seconds So on a slightly more philosophical note maybe because the person uh uh who's 1:13:09 1 hour, 13 minutes, 9 seconds fixing out on time charter is taking less is uh the charter is helping him to 1:13:16 1 hour, 13 minutes, 16 seconds reduce his risk maybe then that leads to slightly lower returns overall. 1:13:23 1 hour, 13 minutes, 23 seconds So we see that in very long-term charters. or whether it's true for one-year charters is a different matter, but the spot market operator typically tends to be taking more risk. 1:13:35 1 hour, 13 minutes, 35 seconds Thank you. 1:13:38 1 hour, 13 minutes, 38 seconds As there are no further questions, I now hand the conference over to Miss Anjali Kumar for closing comments. Over to you. 1:13:46 1 hour, 13 minutes, 46 seconds Uh thank you everybody for joining in and for those very insightful questions and answers. Um, as usual, the 1:13:53 1 hour, 13 minutes, 53 seconds transcript of the both the audio and the text transcript will be there on our website very shortly. Thank you so much 1:14:01 1 hour, 14 minutes, 1 second for joining us and for any future questions, please feel free to email to us and we'll be happy to answer them. Thank you. 1:14:09 1 hour, 14 minutes, 9 seconds Thank you. On behalf of the Great Eastern Shipping Company, that concludes this conference. Thank you for joining us and you may now exit the