Western India Shipyard Limited

Western India Shipyard Limited Date: 13 th January, 216 Stock Performance Details Shareholding Details September 215 Current Price : ` 4.12^ Face Value : ` 2 per share 52 wk High / Low : ` 4.78 / 1.6 Total Traded Volume : 12,96,992 shares^ Market Cap : ` 121.4 crore^ Sector : Marine Port & Services EPS (H1 FY16) : ` (.62) per share Equity Share Capital : ` 58.9 Crore P/E (TTM) :. (x)^ P/BV (TTM) : (2.28) (x)^ Financial Year End : 1 st April 31 st March BSE Scrip Name : WESTE BSE Scrip Code : 531217 ^ As on 12 th January, 216 Particulars Shareholding Nos. (%) Promoter & Promoter Group Holding 16,18,72,48 54.94 Total Institutional Holdings (FIIs & DIIs) 3,21,76,721 1.92 Public Holdings 1,5,94,961 34.14 Total 29,46,44,9 1. Background Western India Shipyard Ltd. (WISL) has a dedicated composite ship and rig repair yard at Mormugao Harbour at Goa under a 25 year license agreement with the Mormugao Port Trust with effect from 5 th April, 1993. It was taken over by ABG Shipyard Ltd., a shipbuilder with ship building yards based at Dahej and Surat, by the acquisition of equity stake of 6%. WISL is registered as a Ship Repair Unit (SRU) since 12th November, 1993 with Director General of Shipping, Ministry of Shipping and Surface Transport, Government of India by virtue of which it is entitled to the use of Duty Free imported and indigenous capital goods, material handling equipment, raw materials, spares and consumables for its project. WISL's state-of-the-art Floating Dry Dock "westerner" has a capacity to repair ships upto 6, dead weight tons (dwt) and to accommodate ships upto 225m. length and 32.5m. in breadth. The yard has been designed and established in collaboration with world leaders in Ship Repairs. WISL yard has ISO 91:28 Quality Certification for ship repairs issued by the Bureau Veritas. Ship repairs consists of replacement of ageing steel plate, pipes and valves, refurbishment of crew accommodation, repair/replacement/renovation of deck side equipment, crane and tank covers, navigational equipment like propeller and rudder repairs, hull and tank repairs, surface coatings and rust prevention, air conditioning and communication systems, etc. It caters to repair of passenger ship, tanker (ship), cargo ship, tranship, dredgers, fishing trawler, barge, Offshore support vessel, warships of Indian Navy and Coast Guard and oil rigs. The Company has repaired over 544 vessels and 13 Deepwater Jack Up Oil rigs at its shipyard since 1996. The Company has an international client base, and its domestic clients include Non-Merchant sector clients such as ONGC, DCI, Coast Guard, Indian Navy and Port Craft and Merchant clients such as SCI, Reliance Industries, Chowgule, Salgaoncar, Dempo, GESCO, Garware Shipping etc. The non-merchant sector account for 6% of the business of the Company. An Initiative of the BSE Investors Protection Fund1

Financial Snapshot Particulars Standalone(` Million) Income Statement H1FY16 H1FY15 Income from Operations 48.2 167.9 Y-o-Y Growth (%) (71.3) (4.4) EBITDA (8.3) (63.5) Y-o-Y Growth (%) (26.5) (259.1) EBITDA Margin (%) (166.6) (37.8) Net Profit (183.) (137.8) Y-o-Y Growth (%) (32.8) (119.8) NPM (%) (379.7) (82.1) Balance Sheet Fixed Assets 513.3 657.5 Cash and Bank Balances 14. 14.5 Inventories 4.9 31.7 Net Working Capital (483.9) (595.6) Net Worth (715.6) (271.4) Balance Sheet Ratios ROCE (%) (1.3).3 RONW (%) (25.6) (5.8) Source: Capitaline From the Research Desk of LKW s Gurukshetra During H1 FY16, the Standalone Income from Operations stood at Rs. 48.2 million which is a decrease from Rs. 167.9 million reported in H1 FY15. WISL has been facing severe recession as anumber of ship repair orders from Indian and foreign clients did not materialize as expected due to the global economic uncertainties in the shipping and ship repair markets where repairs have been postponed by the Ship Owners/Operators/Charterers. The Company s operations were also affected by the severe restrictions on mining in Goa by the Supreme Court and the Central/State Government which affected the Shipping and Ship repair Industry especially the bulk ore transhippers, cargo vessels and barges using the Mormugao Port. Though mining has been permitted subject to quantitative restrictions, the mining operations have not resumed due to delays in the environmental and other approvals from the Central/State Government. The mining Industry is expected to resume during FY 215-16. Material Cost stood at Rs. 3.4 million in H1 FY16 as compared to Rs. 6.9 million in H1 FY15. Employee Cost decreased from Rs. 57.2 million in H1 FY15 to Rs. 55.2 million in H1 FY16. Other Expenses decreased to Rs. 69.6 million in H1 FY16 from Rs. 167.3 million in H1 FY15. In line with the lower Topline, WISL reported an Operating Loss of Rs. 8.3 million in H1 FY16as compared to an Operating Loss of Rs. 63.5 million in H1 FY15. An Initiative of the BSE Investors Protection Fund2

Depreciation and Interest Cost stood at Rs. 61.3 million and Rs. 42.4 million respectively in H1 FY16. Other Income stood declined from Rs. 29.4 million in H1 FY15 to Rs..9 million in H1 FY16. Net Loss stood at Rs. 183 million in H1 FY6 as compared to a Net Loss of Rs. 137.8 million in H1 FY15. Inventories of the Company decreased to Rs. 4.9 million in H1FY16 from Rs. 31.7 million reported in H1FY15, whereas, Debtors increased to Rs. 1,124.2 million in H1 FY16 fromrs. 175.5 million in H1FY15. Performance on the Bourses % 27 24 21 18 15 12 9 6 3 Stock Performance Western India Shipyard as on 7th January, 216 BSE Small Cap Peer Comparison The Company has installed Shiprepair facilities comprising a Floating Dry Dock of 6, Deadweight tons (DWT), 4 Wet Repair Berths, Portal Rail Cranes of 35T, 5T & 7T Mobile Crane, Power Sub-station, Heavy Duty Workshops, Fabrication Centers, etc. WISL has repaired about 14 Oil Rigs and over 585 vessels of all types at its shipyard.the table mentioned below gives a snapshot of the Company s performance for H1 FY16 compared to those of its peers which operate in a similar business segment in the listed space. Particulars Western India Shipyard Bharati Defence and Infrastructure (` In millions) Pipavav Defence and Offshore Engineering Company Income from Operations 48.2 116.8 1,579.4 EBIDTA (8.3) (862.7) (27.4) Net Profit (183.) (2,898.9) (3,374.9) EBIDTA Margins (%) (166.6) (738.6) (13.1) PAT Margins (%) (379.7) (2,481.2) (213.7) Book Value Per Share (1.8) (212.9) 26.7 P/E (x).^.^.^ P/BV (x).^.^ 2.2^ RONW (%) (25.6) (21.3) (15.3) Source: Capitaline Financials on StandaloneBasis; ^ On a Standalone Basis as on September, 215 (TTM Basis) An Initiative of the BSE Investors Protection Fund3

About the Industry The Indian ports and shipping industry plays a vital role in sustaining growth in the country s trade and commerce. India is the sixteenth largest maritime country in the world, with a coastline of about 7,517 km with about 2 ports spread over the east and west coast of India. Cargo traffic, which recorded 1,52 million metric tonnes (MMT) in 215, is expected to touch 1,758 MMT by 217.The capacity of all the major ports was 871.5 MMTas on 31 st March, 215 compared to 581.5 MMT in cargo traffic handled through 214 15. Thus, the capacity utilisation through 214 15 was around 66%. Furthermore, as per internationally-accepted norms, the gap between traffic and capacity is usually around 3%. Additionally, the Government has taken several measures to improve operational efficiency through mechanisation, deepening the draft and speedy evacuations. According to the provisional data from Indian Ports Association, the publicly-owned major ports in India reported healthier levels of growth in container throughput in FY14 15 than in the previous year. Container-handling in FY15 expanded 6.7% year-on-year to 8 million twenty foot-equivalent units (TEUs) from 7.5 million TEUs in FY14. The data also showed that containerised cargo tonnage grew 4% to 119 million tons.in FY15, cargo volumes at the major ports expanded 4.7% year-over-year to 581.3 MMT. In FY15, coal cargo traffic grew by 13.4% to 118.1 MMT from 14.2 MMT in FY14. With regard to commodities, fertiliser handling rose 19% to 16.3 MMT in FY15. The Indian Government plays an important role in supporting the ports sector. It has allowed Foreign Direct Investment (FDI) of up to 1% under the automatic route for port and harbour construction and maintenance projects. It has also facilitated a 1 year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports. The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, reported that the Indian ports sector received FDI worth US$ 1,637.3 million between April 2 and September 215. Currently, there are about 44 ongoing projects undertaken at major ports in India, with total investment of over Rs. 25,87 crore (US$ 3.88 billion). Management Outlook The Global Shipbuilding and Ship repair Industry has been growing at a CAGR of 24% and is likely to reach Rs.14 lakh crore by 215 owing to rising global sea borne trade. Against this, the Indian Shipbuilding and Ship repair Industry has been growing at a CAGR of 8% and is likely to reach Rs. 9,2 crore from the current level of Rs. 7,31 crore. The Government of India plans to invest Rs. 7, crore (US$ 1.5 billion) in 12 major ports in the next five years under 'Sagarmala' initiative. The Government is planning to set up low-cost non-major ports along coastline under the Sagarmala project and has asked all the 12 major ports to accord priority berthing to such vessels and to encourage quicker movement of cargo. The Government plans to establish two new major ports, one at Sagar in West Bengal and the other at Dugarajapatnam in the Nellore district of Andhra Pradesh. The current Prime Minister has laid the foundation stone for the Fourth Container Terminal of Jawaharlal Nehru Port, Mumbai which is expected to increase the existing capacity of the container terminal by more than two times. WISL has submitted a proposal to Mormugao Port Trust (MPT) for the installation of a second Floating Dry Dock for the repair of smaller vessels at its existing facilities with a view to increase repair volumes, productivity and profitability. Due to recessionary conditions in the repair of cargo vessels, the Company has concentrated on repair of non-cargo vessels from the defense sector dominated by the Indian Navy and Coast Guard. The demand for petroleum and liquid fuel is expected to reach 95 million barrels per day (bpd) by 23 from the current level of 84 mn bpd. Due to increasing oil demand, the National Oil Companies have started developing offshore assets to meet the Oil and Gas demands. It is estimated that over 75% of the Oil Rigs are of 1985 vintage and will have to be repaired or replaced in the coming years. WISL has established itself as a reliable unit for composite repairs of Deep water Jack Up Oil rigs with access to large water front area and expects business from this sector to be highly profitable, assured and continuous. However, despite the growth drivers,certain challenges the Company may have to face include continuity of business if its proposal for extension of license agreement is rejected by the port or Central Government. Further, the shipping industry continued to face recessionary conditions during the year coupled with the mines in Goa being affected by the restrictions placed by the Central and State Government. An Initiative of the BSE Investors Protection Fund4

Financial Graphs Net Income from Operations ` in Million 18 16 14 12 1 8 6 4 2 167.9 48.2 H1 FY15 H1 FY16 EBIDTA & EBIDTA Margins ` in Million -2-4 -6-8 -37.8-63.5-8.3-166.6-3 -6-9 -12-15 % -1 H1 FY15 H1 FY16-18 EBIDTA EBIDTA Margins ` in Million -5-1 -15 PAT & PAT Margins -82.1-183. -137.8-379.7-1 -2-3 % -2 H1 FY15 H1 FY16-4 PAT PAT Margins An Initiative of the BSE Investors Protection Fund5

Disclaimer All information contained in the document has been obtained by LKW s Gurukshetra from sources believed to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and LKW s Gurukshetra in particular makes no representation or warranty express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements based on available data, and LKW s Gurukshetra shall not be liable for any losses incurred by users from any use of this document or its contents in any manner. Opinions expressed in this document are not the opinions of our company and should not be construed as any indication of our recommendation to buy, sell or invest in the company under coverage. Disclosure Each member of the team involved in the preparation of this report, hereby affirms that there exists no conflict of interest. The report has been sponsored and published as part of Initiative of BSE s Investors Protection Fund About Us LOTUS KNOWLWEALTH (LKW)commenced business in 1991 and is currently engaged in providing CAPITAL MARKET RESEARCH, INVESTMENT ADVISORY and STRATEGY services. GURUKSHETRA is the Research and Training arm of LKW. LKW Investment Advisers is the SEBI registered Investment Advisory arm of LKW. 5 Contact Us LOTUS KNOWLWEALTH Pvt. Ltd. Regd.Office:B Wing, 55-56, Fairlink Centre, Off Andheri Link Road, Andheri (W), Mumbai 4 53. Email:enquiry@lotusknowlwealth.com Tel: 22-41 5482 41 5483 Website:www.lkwindia.com An Initiative of the BSE Investors Protection Fund6