Q2 FY2026 Marine Sector Insights

Ship Building Sector: Comprehensive Industry Analysis

This report synthesizes extracted data from investor documents and concall transcripts of Knowledge Marine & Engineering Works Limited (KMEW) to provide a comprehensive analysis of the Ship Building sector, with a particular focus on the Indian maritime ecosystem. While the detailed financial and operational data pertains to KMEW, the broader strategic initiatives, government visions, and market trends discussed by the company offer significant insights into the overall industry landscape, growth drivers, and future outlook. KMEW, positioning itself as a flagship leader in India's maritime ecosystem, provides a lens through which to understand the dynamics of shipbuilding, dredging, chartering, and related marine services in India.

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A. INDUSTRY OVERVIEW & MARKET LANDSCAPE

The Indian Ship Building sector, encompassing a wide array of marine activities from vessel construction and repair to dredging and maritime services, is currently experiencing a transformative phase, largely driven by ambitious government initiatives and a strategic vision to bolster India's position as a global maritime powerhouse. The sector is characterized by its critical role in facilitating trade, enhancing coastal security, developing port infrastructure, and promoting maritime tourism.

**Total Addressable Market Size and Growth Rates:** The overarching framework for the sector's growth is articulated through **India's Maritime Amrit Kaal Vision 2047**. This vision aims to elevate India to a 'Viksit Bharat' by 2047, with a significant emphasis on maritime development. Under this vision, a substantial investment commitment of nearly **Rs. 80 lakh crore** has been earmarked for maritime growth. This colossal investment underscores the vast total addressable market and the government's intent to drive sustained, long-term expansion across various maritime segments.

A specific, high-growth segment within this market is the **Green Tug Transition Program (GTTP)**. This program alone projects an investment of **Rs. 12,000 crore** for the deployment of 100 Green Tugs by 2040. This segment represents a significant opportunity for shipbuilding companies capable of developing and deploying environmentally sustainable vessels.

**Market Structure and Segmentation:** The maritime sector is broadly segmented into several interconnected verticals, as exemplified by KMEW's "end-to-end maritime ecosystem." These segments include: * **Shipbuilding:** Design, construction, and repair of various types of vessels, ranging from tugs and workboats to dredgers and specialized crafts. This segment is experiencing a push towards indigenous manufacturing ("Atma Nirbhar Bharat") and green technologies. * **Dredging:** Maintenance and capital dredging for ports, harbors, rivers, and waterways to ensure navigational depth and facilitate trade. This is a critical infrastructure component, often involving specialized equipment and environmental considerations. * **Vessel Owning & Chartering:** Ownership and leasing of marine assets (tugs, dredgers, support vessels, patrol boats) to port authorities, government bodies, and other clients for operational needs. Long-term charter contracts provide stable revenue streams. * **Port Ancillary Services:** Provision of support services to ports, including pilotage, mooring, and security patrol. * **Commercial Cruise Services & Tourism:** Development and operation of cruise ships for tourism, particularly leveraging inland waterways. This is an emerging segment with significant growth potential, aligning with broader tourism promotion efforts.

**Key End Markets and Applications:** The primary end-markets for the shipbuilding and maritime services sector include: * **Port Authorities:** Major and minor ports across India require a continuous upgrade and maintenance of their fleet (tugs, patrol boats, pilot boats) and dredging services to manage increasing cargo traffic and larger vessels. * **Inland Waterways Authority of India (IWAI):** Focuses on developing and maintaining inland waterways for cargo and passenger transport, requiring specialized vessels like dredgers, workboats, and accommodation boats. * **Defense & Security Agencies:** Coastal security and patrol requirements drive demand for specialized patrol boats. * **Oil & Gas Sector:** Offshore exploration and production activities require support vessels and specialized marine engineering services (though not explicitly detailed in KMEW's data, it's a general industry application). * **Tourism Boards:** Collaboration for developing cruise services on rivers and coastal areas. * **International Clients:** Opportunities for dredging and other marine services in neighboring regions (e.g., KMEW's sand mining contracts in Bahrain).

**Geographic Distribution and Regional Dynamics:** The sector's activities are concentrated along India's extensive coastline and its inland waterways. Key regions include: * **Major Port Cities:** Mumbai, Visakhapatnam, V.O. Chidambaranar (VOC), Deendayal Port (Kandla), Paradip, New Mangalore, Kolkata, Pondicherry, etc., are hubs for port operations, shipbuilding, and dredging. * **Inland Waterways:** River Ganga (NW-1), Barak River (NW-16), and Narmada River are critical for inland navigation and tourism development. KMEW's expansion into Pondicherry and Madhya Pradesh (for Narmada Voyage) highlights regional growth opportunities. * **International Presence:** Indian companies are also expanding their footprint internationally, as evidenced by KMEW's sand mining contracts in Bahrain.

**Market Maturity and Lifecycle Stage:** The Indian maritime sector is in a growth phase, transitioning from traditional practices to more modern, efficient, and environmentally sustainable operations. While core activities like dredging and conventional shipbuilding are mature, segments like **Green Tug manufacturing** and **commercial cruise services on inland waterways** are nascent but rapidly developing, indicating a dynamic market lifecycle. The government's long-term vision (Amrit Kaal Vision 2047) suggests a sustained period of investment and expansion.

**Industry Value Chain and Ecosystem:** The value chain is integrated, often involving: * **Design & Engineering:** Conceptualization and detailed design of vessels. * **Material Sourcing & Manufacturing:** Procurement of steel, engines, navigation systems, and other components, followed by fabrication and assembly. KMEW's "in-house manufacturing" for green tugs indicates a move towards vertical integration. * **Shipbuilding/Construction:** Assembly of vessels in shipyards. * **Vessel Operations & Maintenance:** Manning, operating, and maintaining the fleet for chartering, dredging, or other services. * **Ancillary Services:** Port operations, logistics, and specialized marine engineering. * **Regulatory Bodies:** Directorate General of Shipping, IWAI, Port Authorities, and environmental agencies play a crucial role in setting standards and overseeing operations.

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B. FINANCIAL & ECONOMIC PROFILE

The financial profile of the Ship Building sector, as reflected through KMEW's performance, indicates a robust and growing industry with healthy profitability margins, albeit with significant capital intensity and working capital requirements.

**Industry Aggregate Revenue Scale and Growth Trajectory (based on KMEW's performance):** KMEW, a key player in the sector, has demonstrated strong revenue growth, indicating an expanding market. * **FY24 Revenue from operations:** 16,358.31 Lakhs (Rs. 163.58 Crores) * **FY25 Revenue from operations:** 20,070.67 Lakhs (Rs. 200.71 Crores) * This represents a year-over-year growth of **22.70%** from FY24 to FY25. * **H1 FY25 Revenue from operations:** 9,562.80 Lakhs (Rs. 95.63 Crores) * **H1 FY26 Revenue from operations:** 9,864.80 Lakhs (Rs. 98.65 Crores) * This shows a H1 year-over-year growth of **3.16%**. While H1 FY26 growth appears modest compared to the full-year FY25, it's important to note that maritime projects often have seasonal or staggered revenue recognition, and full-year performance may differ. The significant order book secured in H1 FY26 suggests future revenue acceleration.

**Profitability Levels Across Companies (KMEW's performance):** KMEW exhibits strong profitability across its operations, reflecting efficient cost management and potentially strong pricing power in specialized segments.

• **EBITDA Margin:**

• **EBIT Margin:**

• **Profit Before Tax (PBT) Margin:**

• **Profit After Tax (PAT) Margin:**

**Range of Margins with Median and Outliers (KMEW's historical range):** * **EBITDA Margin:** Range from **30.49% (FY24)** to **40.46% (H1 FY26)**. * **PAT Margin:** Range from **18.69% (FY24)** to **24.82% (FY25)**. These margins are indicative of a high-value, specialized service industry, where expertise, specialized fleet, and strong execution capabilities command premium pricing.

**Return Profiles (ROCE, ROE, ROIC) by company:** While specific ROCE/ROE/ROIC figures are not provided, we can infer some aspects from the balance sheet. * **Total Equity (as of 30.09.2025):** 24,260.92 Lakhs. * **Profit After Tax (H1 FY26):** 2,246.45 Lakhs. * **Profit After Tax (FY25):** 4,981.32 Lakhs. Given the strong PAT figures relative to equity, KMEW likely generates healthy returns on equity. The capital-intensive nature of the business (Property, Plant and Equipment: 18,971.33 Lakhs; Capital Work-in-progress: 2,703.21 Lakhs as of 30.09.2025) suggests that efficient asset utilization and strong project execution are crucial for maintaining high returns on capital employed.

**Working Capital Characteristics and Cash Conversion Cycles:** * **Current Assets (30.09.2025):** 14,339.02 Lakhs * **Trade Receivables, Current:** 7,678.52 Lakhs (significant component) * **Inventories:** 39.66 Lakhs (very low, indicating service-oriented business model) * **Current Liabilities (30.09.2025):** 9,117.55 Lakhs * **Trade Payable:** 1,738.82 Lakhs * **Cash Generated from Operations (H1 FY26):** -3,608.62 Lakhs * **Net Cash from Operating Activities (H1 FY26):** -3,775.49 Lakhs The negative cash flow from operations in H1 FY26 is a critical observation. This is primarily driven by "Changes in Working Capital" of -7,304.71 Lakhs. This suggests a significant increase in working capital requirements, likely due to growth in trade receivables (as new projects commence) and potentially inventory/advances for new shipbuilding orders. While revenue is recognized, cash collection might lag, indicating a longer cash conversion cycle, which is common in project-based industries with long contract durations. Managing trade receivables effectively will be key.

**Capital Intensity Requirements:** The sector is highly capital intensive, requiring significant investment in marine assets (dredgers, tugs, workboats) and shipyard infrastructure. * **Non-Current Assets (30.09.2025):** 28,884.43 Lakhs * **Property, Plant and Equipment:** 18,971.33 Lakhs * **Capital Work-in-progress:** 2,703.21 Lakhs KMEW's substantial investment in PPE and CWIP, alongside its "owned fleet of 40 Marine Assets," underscores the high capital requirements. The "in-house manufacturing" for Green Tugs, while offering "capex optimisation," still necessitates significant upfront investment in facilities and equipment. The recent preferential issue of Rs. 285 Crores and increased borrowings (Non-current borrowings: 8,740.69 Lakhs; Current borrowings: 5,827.74 Lakhs) highlight the need for external financing to fuel growth.

**Revenue Quality (recurring vs one-time, contract length):** The revenue streams appear to be a mix of long-term recurring contracts and project-based one-time revenues. * **Charter Hire Projects:** Many contracts are long-term, ranging from 3 to 15 years (e.g., Green Tug contracts for 15 years, various patrol boat and tug contracts for 5-7 years). These provide a strong base of recurring revenue. * **Dredging Projects:** While some are multi-year (e.g., Bahrain sand mining for 5 years, IWAI contracts for 3 years), others are shorter-term (e.g., Pondicherry Port for 3 months, Paradip Port for 4 months). These contribute to project-based revenue. * **Ship Building Projects:** These are typically one-time, high-value contracts with delivery timelines of 14-24 months (e.g., IWAI orders for 24 crafts). The significant portion of long-term charter hire contracts, especially the 15-year Green Tug contracts, enhances revenue visibility and quality, providing a stable foundation for future growth.

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C. COMPETITIVE STRUCTURE & DYNAMICS

The Indian Ship Building and maritime services sector, while benefiting from significant government support and investment, operates within a competitive landscape. KMEW's data provides insights into its positioning and the broader competitive dynamics.

**Number of Players and Market Concentration:** The sector likely has a mix of large public sector undertakings (PSUs), established private players, and smaller specialized firms. KMEW's self-description as a "Flagship leader in India's Maritime ecosystem" and "Among the few Indian companies qualified to bid & deploy GTTP-compliant electric tugs" suggests a market with a limited number of highly capable players, especially in specialized and technologically advanced segments like Green Tugs. The "Superior Order Win Ratio >50%" further implies that KMEW is a dominant player in the bids it participates in, suggesting a degree of market concentration where a few key players secure a majority of the contracts.

**Competitive Intensity Assessment (Porter's 5 Forces style):**

• **Threat of New Entrants (Moderate to Low in specialized segments, High in basic services):**

• **Bargaining Power of Buyers (Moderate to High):**

• **Bargaining Power of Suppliers (Moderate):**

• **Threat of Substitute Products or Services (Low in core segments):**

• **Rivalry Among Existing Competitors (High, especially in bidding):**

**Market Share Distribution:** Specific market share percentages are not provided. However, KMEW's significant order book (Total Balance Order Book: Rs. 1,749.89 Crores as of Sept 30, 2025) across dredging, charter hire, and shipbuilding, combined with its "flagship leader" claim, suggests a substantial market presence. The company's ability to secure "maiden and one of domestic highest-value contracts of Green Tug" further indicates a leading position in emerging high-value segments.

**Pricing Power Dynamics and Pricing Trends:** KMEW's consistently high and improving EBITDA margins (reaching 40.46% in H1 FY26) suggest strong pricing power, particularly in its specialized services. The management's target of "minimum 35% EBITDA margin" for new contracts reinforces this. This pricing power likely stems from: * **Specialized Expertise:** Extensive experience in complex projects like rock dredging. * **Advanced Fleet:** Ownership of a diverse and specialized fleet, including advanced dredgers and tugs. * **Technological Edge:** Ability to bid and deploy GTTP-compliant electric tugs. * **Integrated Services:** Offering an end-to-end maritime ecosystem. The long-term nature of charter contracts also provides pricing stability.

**Differentiation Strategies Employed (by KMEW):** KMEW employs several key differentiation strategies: 1. **End-to-End Maritime Ecosystem:** Shipbuilding + Owning + Chartering + Repair, offering a comprehensive solution to clients. 2. **Specialized Fleet & Expertise:** Strong owned fleet of 40 Marine Assets, including 26 dredger equipment, with extensive experience in rock dredging and proficiency in environmentally sensitive waterways. 3. **Technological Leadership:** Among few qualified for GTTP-compliant electric tugs, with in-house manufacturing capabilities for these advanced vessels. 4. **Operational Excellence:** Integration of advanced dredging methodologies, real-time monitoring systems, and optimized deployment planning. 5. **Quality & Safety Certifications:** ISO 45001, ISO 14001, ISO 9001 certifications demonstrate commitment to high standards. 6. **Strategic Alignment:** Positioning aligned with India's Blue Economy & Maritime Vision, enabling participation in key government-driven projects. 7. **Strong Execution Track Record:** Superior Order Win Ratio >50% and successful completion of major dredging projects.

**Consolidation Trends and M&A Activity:** No explicit M&A activity is mentioned in the provided data. However, the capital-intensive nature and the need for specialized expertise might lead to consolidation in the future, with larger players acquiring smaller, niche firms to expand capabilities or fleet. KMEW's preferential issue of Rs. 285 Crores suggests organic growth and capital expenditure as the primary focus for expansion.

**Competitive Advantages of KMEW:** * **Integrated Business Model:** End-to-end services provide cross-selling opportunities and client stickiness. * **Technological Prowess in Green Tugs:** Early mover advantage and qualification in the GTTP segment. * **Owned and Specialized Fleet:** Reduces reliance on external chartering and provides operational control. * **Proven Execution Capability:** High order win ratio and successful project delivery. * **Strategic Positioning:** Aligned with national maritime priorities and visions. * **Financial Strength:** Strong profitability and access to capital (preferential issue).

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D. OPERATIONAL CHARACTERISTICS

The operational characteristics of the Ship Building and maritime services sector are defined by the deployment of specialized marine assets, adherence to stringent safety and environmental standards, and efficient project management. KMEW's operations provide a detailed view of these aspects.

**Capacity and Utilization Trends Across Companies (KMEW's Fleet):** KMEW operates a substantial and diverse fleet, indicating significant operational capacity. * **Total Owned Fleet:** 40 Marine Assets. * **Dredger Fleet (26 units):** * **Trailing Suction Hopper Dredger (TSHD):** 3 units (Built/Rebuilt 2004-2019), Hopper Capacity 1500m³-1900m³. These are large-scale dredgers suitable for maintenance dredging in ports and channels. * **Cutter Suction Dredger (CSD):** 9 units (Built/Rebuilt 2023-2025), 4 Nos. CSD 500, 5 Nos. CSD 400. These are used for capital dredging, especially in hard material. The recent build/rebuild dates (2023-2025) indicate a modern and expanding CSD fleet. * **Backhoe/Grab Dredger:** 2 units (Built/Rebuilt 2010-2016). * **Hopper Barge:** 1 unit (Built 2016). * **Support Vessels:** 11 units (Built/Rebuilt 2017-2025), including 8 Multi-Cat Work Boats and 3 Survey Boats. * **Port Ancillary Equipment:** * **Tugs:** 4 units (Built 2023-2025), including 1x 60 Ton Bollard Pull ASTDS Tug (Under Construction). * **Mooring Boat:** 2 units (Built 2021). * **Speed Patrol Boat:** 7 units (Built 2021-2025), with 2 under construction. * **Pilot Boat:** 1 unit (Built 2019).

The continuous investment in new builds and rebuilds (e.g., CSDs, Tugs, Patrol Boats built/rebuilt between 2023-2025) suggests a strategy of fleet modernization and capacity expansion to meet growing demand and secure new contracts. The "Capital Work-in-progress" of 2,703.21 Lakhs as of 30.09.2025 further supports ongoing capacity enhancement. While specific utilization rates are not provided, the "Superior Order Win Ratio >50%" and the substantial balance order book imply high utilization of existing assets and planned utilization for new assets.

**Production Economics and Cost Structures (KMEW's perspective):** * **Cost of Material Consumed:** This is the largest cost component for KMEW, accounting for approximately **48.82%** of revenue in H1 FY26 (4,815.68 Lakhs / 9,864.80 Lakhs) and **47.38%** in FY25 (9,509.84 Lakhs / 20,070.67 Lakhs). This highlights the importance of efficient procurement and supply chain management. * **Employee Expenses:** A relatively smaller but growing component. It was 417.29 Lakhs in H1 FY26, representing **4.23%** of revenue, up from 306.90 Lakhs (3.21% of revenue) in H1 FY25. This increase could be due to expansion, hiring for new projects, or wage inflation. * **Other Expenses:** Includes operational overheads, administrative costs, etc. It was 640.37 Lakhs in H1 FY26, representing **6.49%** of revenue, down from 760.15 Lakhs (7.95% of revenue) in H1 FY25, indicating some efficiency gains or project-specific variations. * **Depreciation:** A significant non-cash expense due to the capital-intensive nature of the business. It increased from 528.17 Lakhs in H1 FY25 to 711.68 Lakhs in H1 FY26, reflecting the growing asset base. * **Finance Cost:** This has seen a substantial increase, from 384.54 Lakhs in H1 FY25 to 745.34 Lakhs in H1 FY26, indicating higher debt levels to fund capital expenditure and working capital.

The cost structure suggests that managing material costs and finance costs are critical for maintaining and improving profitability. The high EBITDA margins indicate that the company effectively manages its direct operational costs and commands a premium for its services.

**Supply Chain Structure and Dependencies:** The supply chain for shipbuilding and marine services involves: * **Raw Materials:** Steel, specialized alloys. * **Components:** Engines, propulsion systems (especially for Green Tugs), navigation equipment, electrical systems, dredging components. * **Subcontractors:** For specialized fabrication, installation, or repair services. KMEW's "in-house manufacturing" for Green Tugs suggests a degree of vertical integration, which can reduce reliance on external suppliers for certain critical components and improve cost control and quality. However, for highly specialized items, dependencies on global suppliers might exist.

**Technology Landscape and Innovation Pace:** The sector is undergoing a significant technological shift, particularly driven by environmental mandates. * **Green Tug Transition Program (GTTP):** This program is a major catalyst for innovation, pushing for electric and hybrid propulsion systems in tugs. KMEW's qualification and securing of Green Tug contracts demonstrate its embrace of this technology. * **Advanced Dredging Methodologies:** KMEW mentions "integration of advanced dredging methodologies, real-time monitoring systems, and optimized deployment planning," indicating continuous innovation in operational techniques. * **Eco-friendly Operations:** The Narmada Voyage cruise project features "Hybrid Propulsion & Zero-Discharge Systems," showcasing a commitment to sustainable technologies in tourism. The pace of innovation is accelerating, especially in propulsion systems and environmental compliance, driven by regulatory pressures and global sustainability goals.

**Operational Efficiency Benchmarks (KMEW's perspective):** * **EBITDA Margin:** The consistent improvement and high level of EBITDA margin (40.46% in H1 FY26) serve as a strong benchmark for operational efficiency. * **Order Win Ratio:** A "Superior Order Win Ratio >50%" indicates highly effective bidding, project estimation, and competitive positioning, which are key operational efficiency metrics in a tender-driven industry. * **Project Execution:** Successful completion of large-scale dredging projects (e.g., Sittwe Port, Kolkata Dock System) demonstrates strong project management and execution capabilities. * **Fleet Modernization:** The recent build/rebuild dates of its CSDs, Tugs, and Patrol Boats suggest a proactive approach to maintaining a modern and efficient fleet, which contributes to operational uptime and performance.

**Key Performance Indicators (company-specific and industry averages):** * **Revenue Growth:** KMEW's 22.70% YoY growth in FY25 is a key indicator. * **Profitability Margins:** EBITDA, EBIT, and PAT margins are crucial for assessing financial health. * **Order Book Value:** Total Balance Order Book of Rs. 1,749.89 Crores provides future revenue visibility. * **Order Win Ratio:** KMEW's >50% ratio is a strong indicator of competitive success. * **Fleet Size & Modernity:** Number of owned assets and their age/technology level. * **Project Completion Rates & Timelines:** Adherence to contractual obligations. * **Safety & Environmental Compliance:** Measured by certifications (ISO 45001, ISO 14001) and incident rates.

**Asset Efficiency Metrics:** * **Property, Plant and Equipment (PPE) to Revenue:** * FY25 Revenue: 20,070.67 Lakhs * PPE (as of 30.09.2025): 18,971.33 Lakhs * This ratio (approx. 0.95x) indicates that the company generates nearly one unit of revenue for every unit of PPE, which is reasonable for a capital-intensive asset-heavy business. * **Capital Work-in-progress (CWIP) to PPE:** CWIP of 2,703.21 Lakhs relative to PPE of 18,971.33 Lakhs indicates ongoing significant investment in new assets, suggesting future capacity expansion and revenue generation potential.

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E. GROWTH DYNAMICS & DRIVERS

The Ship Building sector in India is poised for significant growth, propelled by a confluence of government policy support, infrastructure development, and increasing demand for specialized marine services. KMEW's strategic initiatives and performance directly reflect these growth dynamics.

**Historical Growth Trajectory (KMEW's 3-5 year view):** * **Revenue from operations:** * FY24: 16,358.31 Lakhs * FY25: 20,070.67 Lakhs (22.70% YoY growth) * **Profit After Tax:** * FY24: 3,057.82 Lakhs * FY25: 4,981.32 Lakhs (62.90% YoY growth) KMEW has demonstrated a strong historical growth trajectory, with revenue growing at a healthy double-digit rate and PAT showing even more significant acceleration, driven by margin expansion.

**Current Growth Rates and Acceleration/Deceleration (KMEW's H1 FY26 vs H1 FY25):** * **Revenue from operations:** 3.16% (H1 FY26: 9,864.80 Lakhs vs H1 FY25: 9,562.80 Lakhs) * **Profit After Tax:** -1.75% (H1 FY26: 2,246.45 Lakhs vs H1 FY25: 2,286.43 Lakhs) While H1 FY26 shows a deceleration in revenue growth and a slight decline in PAT compared to the previous H1, this needs to be viewed in context. The company secured "7 Significant Order Wins totalling Rs. 968.69 Crores" in H1 FY26, including high-value, long-term Green Tug contracts. The negative cash flow from operations due to working capital changes also suggests significant project ramp-up. These new orders, particularly the 15-year Green Tug contracts, are expected to drive substantial revenue growth in future periods, indicating a potential acceleration post H1 FY26.

**Volume vs Price Contribution to Growth:** While specific breakdowns are not provided, KMEW's improving EBITDA margins (from 30.49% in FY24 to 40.46% in H1 FY26) suggest that price realization and/or a shift towards higher-value, higher-margin services (like Green Tugs and specialized dredging) are significant contributors to growth, in addition to volume expansion from new contracts.

**Organic vs Inorganic Growth Components:** KMEW's growth appears primarily organic, driven by: * **New Order Wins:** Securing significant contracts in dredging, chartering, and shipbuilding. * **Fleet Expansion & Modernization:** Investing in new dredgers, tugs, and support vessels. * **Geographic Expansion:** Entry into new regions like Pondicherry and Madhya Pradesh. * **Service Line Expansion:** Entry into Commercial Cruise Services. The Rs. 285 Crores raised through Preferential Issue is intended to fund this organic expansion. No inorganic growth (acquisitions) is mentioned.

**Geographic Expansion Opportunities and Progress:** KMEW has demonstrated active geographic expansion: * **Domestic:** Secured new projects in Pondicherry and Madhya Pradesh (for cruise services). Its existing operations span major ports and inland waterways across India. * **International:** Continued presence in international markets with "Sand Mining Contracts in Bahrain" (Balance Value: 33,977.11 Lakhs). This indicates potential for further international expansion.

**Product/Service Innovation Pipeline:** KMEW's innovation pipeline is robust, focusing on: * **Green Tugs:** Development and deployment of GTTP-compliant electric tugs, a significant technological leap. * **Luxury Cruise Ships:** Building and operating eco-friendly luxury cruise ships with hybrid propulsion and zero-discharge systems for the Narmada Voyage. * **Advanced Dredging:** Continuous integration of advanced methodologies and real-time monitoring systems. * **Ship Design & Construction:** Expanding capabilities in designing and constructing a variety of vessels (workboats, accommodation boats, CSDs) for IWAI.

**Adjacent Market Opportunities:** * **Commercial Cruise Services:** Entry into this sector in collaboration with the Madhya Pradesh Tourism Board represents a significant adjacent market opportunity, leveraging maritime expertise for tourism. * **Ship Design:** Backward integration into ship design and construction for IWAI orders opens up a new revenue stream within the shipbuilding value chain. * **Port Modernization & Automation:** As ports modernize, there will be demand for smart port solutions and automated marine equipment, which could be an adjacent opportunity.

**Customer Acquisition and Penetration Trends:** KMEW's success in securing contracts from major government entities like VOC Port Authority, Visakhapatnam Port Authority, IWAI, Dredging Corporation of India, and Deendayal Port Authority indicates strong customer acquisition and deep penetration within the public sector maritime market. The "Superior Order Win Ratio >50%" highlights its effectiveness in converting opportunities into contracts. The long-term nature of many contracts also signifies strong customer retention.

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F. RISK LANDSCAPE

While the Ship Building sector in India presents significant growth opportunities, it is also subject to various risks that can impact operational and financial performance. KMEW's disclosures, though not explicitly listing "risks," allow for inference of potential challenges.

**Industry-wide Systematic Risks:** * **Economic Cyclicality:** The maritime sector is closely tied to global trade and economic activity. Downturns in trade volumes, industrial output, or commodity prices can reduce demand for shipping, port services, and new vessel construction. * **Geopolitical Risks:** Regional conflicts, trade wars, or political instability can disrupt shipping routes, impact project timelines, and increase operational costs. KMEW's international contracts (e.g., Bahrain) expose it to such risks. * **Interest Rate Fluctuations:** Given the capital-intensive nature and reliance on borrowings, rising interest rates can significantly increase finance costs, impacting profitability. KMEW's finance costs nearly doubled in H1 FY26, highlighting this sensitivity.

**Cyclicality and Economic Sensitivity:** * **Dredging Demand:** While maintenance dredging is relatively stable, capital dredging projects are often tied to economic expansion and port development plans, making them somewhat cyclical. * **Shipbuilding Orders:** New vessel orders are highly sensitive to freight rates, fleet utilization, and economic outlook. * **Chartering Rates:** Can fluctuate based on demand and supply of vessels.

**Regulatory and Policy Risks by Geography:** * **Compliance with GTTP Standards:** The "Green Tug Transition Program" mandates specific standards (ASTDS-GTTP) for new tugs after 2033. Failure to comply or adapt to evolving standards could lead to competitive disadvantages or penalties. * **Environmental Compliance:** Dredging operations are subject to strict environmental regulations (GMB, MARPOL regulations, ESHS, HSMS policies). Non-compliance can result in fines, project delays, or reputational damage. The "environmentally sensitive and depth-restricted waterways" require specialized handling and strict adherence to norms. * **Changes in Government Policy:** While current policies (Maritime Amrit Kaal Vision, Atma Nirbhar Bharat) are supportive, any adverse changes in subsidies, import duties, or procurement policies could affect the industry. * **Permitting and Approvals:** Obtaining necessary permits for dredging, shipbuilding, and new project development can be time-consuming and subject to delays.

**Technology Disruption Threats:** * **Rapid Technological Advancements:** While KMEW is investing in Green Tugs, the pace of technological change in marine propulsion (e.g., hydrogen, ammonia fuels) could lead to rapid obsolescence of current technologies if not continuously monitored and adapted. * **Automation:** Increased automation in port operations and vessel control could alter demand for certain types of services or labor.

**ESG and Sustainability Challenges:** * **Environmental Impact:** Dredging activities can have environmental impacts (sediment disturbance, water quality). Companies must manage these impacts effectively to maintain social license to operate. * **Carbon Emissions:** The maritime industry is under pressure to reduce its carbon footprint. While GTTP addresses this for tugs, broader fleet emissions and operational practices need continuous improvement. * **Occupational Health & Safety:** Marine operations inherently carry safety risks. Maintaining high safety standards (ISO 45001) is crucial to prevent accidents, ensure employee well-being, and avoid regulatory scrutiny.

**Supply Chain Vulnerabilities:** * **Global Supply Chain Disruptions:** Reliance on global suppliers for specialized marine equipment and components can expose companies to risks from geopolitical events, natural disasters, or pandemics, leading to delays and cost increases. * **Material Price Volatility:** Fluctuations in raw material prices (e.g., steel) can impact project costs and profitability, especially for fixed-price contracts.

**Competitive Threats (new entrants, substitutes):** * **Intense Bidding Competition:** The competitive bidding environment for government contracts means that companies face constant pressure on pricing and need to continuously differentiate. KMEW's >50% win ratio is strong, but competition remains. * **Emergence of New Players:** While barriers to entry are high in specialized segments, new players with innovative technologies or strong financial backing could emerge, especially with government incentives.

**Customer Concentration Risks:** * KMEW's significant order book is primarily with government entities (IWAI, Port Authorities, DCI). While these are large and stable clients, a high concentration could pose a risk if any major client significantly reduces its spending or faces financial difficulties. However, the diversity across multiple port authorities and IWAI mitigates this to some extent.

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G. CAPITAL ALLOCATION & INVESTOR RETURNS

Capital allocation in the Ship Building sector is heavily geared towards maintaining and expanding a specialized asset base, funding long-term projects, and investing in new technologies. KMEW's financial data provides insights into its capital allocation strategy and its implications for investor returns.

**Capex Trends and Requirements (growth vs maintenance):** * **Depreciation:** Increased from 528.17 Lakhs in H1 FY25 to 711.68 Lakhs in H1 FY26, and from 826.13 Lakhs in FY24 to 1,143.17 Lakhs in FY25. This indicates ongoing maintenance capex to sustain the existing fleet. * **Capital Work-in-progress (CWIP):** A substantial 2,703.21 Lakhs as of 30.09.2025, representing significant growth capex for new shipbuilding projects and fleet expansion. This includes the construction of Green Tugs and IWAI vessels. * **Property, Plant and Equipment (PPE):** The large PPE base of 18,971.33 Lakhs (as of 30.09.2025) reflects the capital-intensive nature of owning and operating a diverse marine fleet. * **Cash Flow from Investing Activities:** Positive 217.19 Lakhs in H1 FY26. This might seem counter-intuitive given the capex, but it could be due to disposals of older assets or other investment income offsetting new capital expenditures within the period. However, the increase in PPE and CWIP on the balance sheet clearly indicates net investment.

The company's strategy involves continuous investment in fleet modernization and expansion to capitalize on growth opportunities like GTTP and inland waterways development. This necessitates significant capital expenditure, which is a characteristic of the sector.

**R&D Investment Levels as % of Revenue:** Specific R&D expenditure is not explicitly broken out. However, KMEW's ability to develop "in-house manufacturing" for Green Tugs and integrate "advanced dredging methodologies" implies significant investment in technology and engineering capabilities, which could be categorized under R&D or capitalized as part of project development costs. The focus on "Hybrid Propulsion & Zero-Discharge Systems" for the Narmada Voyage also points to technological development efforts.

**Dividend Policies and Payout Ratios:** Dividend policy and payout ratios are not provided in the extracted data. However, given the high growth phase and significant capital requirements for fleet expansion and new projects, it is common for companies in this sector to prioritize reinvestment of earnings over high dividend payouts.

**Share Buyback Programs:** No information on share buyback programs is provided.

**M&A Activity and Strategy:** No M&A activity is mentioned. KMEW's strategy appears to be focused on organic growth, leveraging its existing capabilities and expanding into new segments (Green Tugs, Cruise Services) and geographies.

**Cash Generation and Free Cash Flow Profiles:** * **Profit before Tax (H1 FY26):** 2,711.61 Lakhs * **Adjustments for Non-Operating Items (H1 FY26):** 984.48 Lakhs (includes depreciation, finance costs, etc.) * **Operating Profit before Working Capital Changes (H1 FY26):** 3,696.09 Lakhs * **Changes in Working Capital (H1 FY26):** -7,304.71 Lakhs * **Net Cash from Operating Activities (H1 FY26):** -3,775.49 Lakhs The negative net cash from operating activities in H1 FY26 is a key observation. This is primarily due to a substantial increase in working capital requirements, likely driven by growth in trade receivables as new, large projects (like the Green Tug contracts) commence. While the company is profitable, the cash conversion cycle can be long in project-based businesses. * **Cash Flow from Financing Activities (H1 FY26):** 4,058.20 Lakhs. This positive inflow is crucial for funding operations and investments, indicating reliance on external financing (debt and equity). The "Successfully Raised Rs. 285 Crores through Preferential Issue" is a part of this financing. * **Net increase in Cash & Cash equivalent (H1 FY26):** 499.89 Lakhs. Despite negative operating cash flow, the company managed to increase its cash balance due to strong financing activities. This highlights the importance of access to capital for growth in this sector.

**Capital Efficiency Improvements:** KMEW's improving EBITDA margins (from 30.49% in FY24 to 40.46% in H1 FY26) suggest improvements in operational efficiency and potentially better pricing for its services, which contributes to capital efficiency by generating more profit per unit of revenue. The "in-house manufacturing ensures capex optimisation & operational efficiency for Green Tugs" is a direct statement regarding capital efficiency. Efficient deployment and utilization of its specialized fleet are also critical for maximizing returns on its significant asset base.

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H. FUTURE OUTLOOK & PROJECTIONS

The future outlook for the Indian Ship Building and maritime services sector, as articulated through KMEW's strategic vision and government initiatives, is highly positive, driven by ambitious national goals and emerging technological trends.

**Industry Growth Projections (with timeframes):** * **Maritime Amrit Kaal Vision 2047:** Projects nearly **Rs. 80 lakh crore** investment for maritime growth by 2047, indicating a long-term, sustained growth trajectory for the entire sector. This vision aims to transform India into a 'Viksit Bharat' and a global maritime powerhouse. * **Green Tug Transition Program (GTTP):** Aims for **100% Green Tugs in all major ports by 2040**, with an interim target of **30% port vessel emission reduction by 2030**. This program alone represents an investment of **Rs. 12,000 crore** for 100 Green Tugs by 2040. This segment is expected to be a major growth driver for shipbuilding and chartering companies. * **Inland Waterways Expansion:** Continued expansion and development of inland waterways for efficient transport will drive demand for specialized vessels and dredging services. * **Growing Cruise & Maritime Tourism Sector:** The Narmada Voyage project is an example of an emerging segment with significant growth potential, supported by tourism boards.

**Management Guidance Across Companies (KMEW's guidance):** * **Billion-Dollar Enterprise:** KMEW's management has a clear goal to "scale to a billion-dollar enterprise and beyond." Given its current market capitalization of Rs. 3,000+ Crore (H1 FY25-26), this is an ambitious but achievable target, implying substantial future growth. * **Green Tug as Stand-alone Vertical:** The Green Tug segment is "expected to emerge as a stand-alone business vertical," indicating significant strategic focus and revenue potential from this new technology. * **Active Interest in Projects:** KMEW is actively interested in "projects worth approx. Rs. 2,000 plus Crores," signaling a strong pipeline of future opportunities beyond its current order book. * **Profitability Target:** Strategic focus on "contracts with minimum 35% EBITDA margin" suggests a commitment to maintaining and improving high profitability levels. * **Diversified Bidding:** Management is "participating in multiple bids across Dredging, Chartering & Shipbuilding," ensuring a diversified approach to securing future growth.

**Emerging Opportunities and Whitespace:** * **Electric/Hybrid Propulsion:** The GTTP creates a significant whitespace for companies capable of designing, building, and operating advanced green vessels. * **Inland Waterways Tourism:** The Narmada Voyage project highlights the untapped potential of luxury cruise services on India's vast inland waterways. * **Specialized Marine Infrastructure:** As ports expand and modernize, demand for specialized marine infrastructure development and maintenance will increase. * **Digitalization & IoT in Maritime:** Integration of real-time monitoring, predictive maintenance, and smart navigation systems offers opportunities for technological leaders.

**Transformation Themes and Inflection Points:** * **Decarbonization of Shipping:** The global push for decarbonization, exemplified by GTTP, is a major transformation theme. Companies that adapt early will gain a competitive edge. * **"Atma Nirbhar Bharat" in Shipbuilding:** The government's self-reliance initiative is an inflection point, shifting focus towards domestic manufacturing and reducing reliance on imports for vessels. * **Blue Economy Focus:** The emphasis on sustainable use of ocean resources (Blue Economy) will drive innovation in eco-friendly operations and technologies.

**Long-term Structural Trends (5-10 year view):** * **Increased Maritime Trade:** India's growing economy and strategic location will continue to drive demand for efficient port infrastructure and maritime logistics. * **Modernization of Indian Ports:** Continuous investment in upgrading port facilities, deepening channels, and acquiring modern fleets. * **Growth of Inland Waterways:** Development of a robust network of inland waterways for cargo and passenger movement. * **Sustainability Mandates:** Environmental regulations will become increasingly stringent, favoring companies with green technologies and sustainable practices. * **Technological Integration:** Greater adoption of automation, AI, and data analytics in marine operations and shipbuilding.

**Potential Disruptions on the Horizon:** * **Rapid Evolution of Green Technologies:** While an opportunity, it also poses a risk of existing green technologies becoming obsolete quickly if newer, more efficient solutions emerge. * **Global Economic Shocks:** Major global recessions or trade conflicts could significantly impact demand. * **Cybersecurity Threats:** Increased digitalization in maritime operations makes the sector vulnerable to cyberattacks.

**Expected Margin Evolution (KMEW's perspective):** KMEW's strategic focus on "contracts with minimum 35% EBITDA margin" suggests that management expects to maintain or even improve its already high EBITDA margins. The shift towards higher-value, specialized services like Green Tugs and complex dredging projects, combined with operational efficiencies from in-house manufacturing, supports this positive margin outlook. While finance costs may increase with growth, effective tax planning and strong operational profitability are expected to sustain healthy PAT margins.

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I. COMPANY-BY-COMPANY PROFILES

KNOWLEDGE MARINE & ENGINEERING WORKS LIMITED (KMEW)

**Company Name:** Knowledge Marine & Engineering Works Limited (KMEW) **General Information:** * CIN: L74120MH2015PLC269596 * Scrip Code: 543273, Symbol: KMEW * ISIN: INEOCJDO1011 * Website: www.kmew.in * Date of Presentation: November 22, 2025 (covering H1 FY25-26) * Celebrated 10-year milestone on October 26, 2025.

**Brief Description:** KMEW is a flagship leader in India's Maritime ecosystem, offering an end-to-end maritime solution encompassing Shipbuilding, Owning, Chartering, and Repair services. The company specializes in dredging, port ancillary services, and has recently diversified into commercial cruise services and the construction of Green Tugs. KMEW is strategically positioned to capitalize on India's Blue Economy and Maritime Vision, aiming to scale to a billion-dollar enterprise.

**Scale Metrics:** * **Market Capitalisation (H1 FY25-26):** Rs. 3,000+ Crore. * **Revenue from operations (FY25):** 20,070.67 Lakhs (Rs. 200.71 Crores). * **Total Owned Fleet:** 40 Marine Assets, including 26 dredger equipment. * **Order Book (as at Sept 30, 2025):** Total Balance Order Book of **174,988.61 Lakhs (Rs. 1,749.89 Crores)**. This is approximately 8.7x its FY25 revenue, providing strong revenue visibility for several years. * **Order Win Ratio:** Superior Order Win Ratio >50%.

**Financial Performance Summary (Consolidated, in Lakhs):**

| Metric | H1 FY26 (Un-Audited) | H1 FY25 (Un-Audited) | FY25 | FY24 | | :-------------------------- | :------------------- | :------------------- | :------------ | :------------ | | Revenue from operations | 9,864.80 | 9,562.80 | 20,070.67 | 16,358.31 | | **Growth (YoY)** | **3.16%** | - | **22.70%** | - | | EBITDA | 3,991.46 | 3,686.34 | 7,821.51 | 4,987.55 | | **EBITDA Margin** | **40.46%** | **38.55%** | **38.97%** | **30.49%** | | EBIT | 3,279.78 | 3,158.17 | 6,678.34 | 4,161.42 | | **EBIT Margin** | **33.25%** | **33.03%** | **33.27%** | **25.44%** | | Profit before Tax | 2,711.61 | 2,929.73 | 6,219.74 | 4,080.15 | | **PBT Margin** | **27.49%** | **30.64%** | **30.99%** | **24.94%** | | Profit After Tax | 2,246.45 | 2,286.43 | 4,981.32 | 3,057.82 | | **PAT Margin** | **22.77%** | **23.91%** | **24.82%** | **18.69%** | | EPS (As per Profit after Tax) | 20.8 | 21.17 | 46.12 | 28.31 |

**Key Financial Highlights:** * **Strong Revenue Growth:** 22.70% YoY in FY25, indicating robust market demand. * **Exceptional Profitability:** Consistently high EBITDA margins, improving from 30.49% in FY24 to 40.46% in H1 FY26, demonstrating strong operational efficiency and pricing power. * **PAT Margin Expansion:** PAT margins expanded significantly from 18.69% in FY24 to 24.82% in FY25. * **Increased Finance Costs:** A notable increase in finance costs in H1 FY26 (745.34 Lakhs vs 384.54 Lakhs in H1 FY25) impacted PBT and PAT margins in the short term, reflecting increased borrowings for growth. * **Negative Operating Cash Flow (H1 FY26):** -3,775.49 Lakhs, primarily due to significant working capital changes, indicating substantial project ramp-up and investment in receivables. This was offset by strong financing activities.

**Strategic Priorities and Focus Areas:** 1. **Green Tug Transition Program (GTTP):** Leading participation in GTTP, securing maiden and high-value contracts for 15-year tenure Green Tugs from VOC Port Authority and Visakhapatnam Port Authority (totaling Rs. 652.63 Crores). This is expected to become a stand-alone business vertical. 2. **Backward Integration into Shipbuilding:** Expanded into ship design, construction, and vessel building with confirmed work orders from IWAI (Rs. 195.50 Crores for 24 crafts). 3. **Forward Integration into Cruise & Tourism:** Entered the Commercial Cruise Services sector with the "Narmada Voyage" project in collaboration with the Madhya Pradesh Tourism Board, building and operating a luxury cruise ship. 4. **Fleet Modernization & Expansion:** Continuous investment in owned fleet, including new CSDs, Tugs, and Patrol Boats, with significant Capital Work-in-progress. 5. **Geographic Expansion:** Expanded operations into Pondicherry and Madhya Pradesh, alongside existing domestic and international (Bahrain) presence. 6. **Operational Excellence:** Focus on advanced dredging methodologies, real-time monitoring, and optimized deployment.

**Competitive Advantages and Positioning:** * **Integrated Maritime Ecosystem:** Unique end-to-end offering (Shipbuilding + Owning + Chartering + Repair). * **Pioneer in Green Tugs:** Among few Indian companies qualified for GTTP, with in-house manufacturing capabilities for capex optimization. * **Specialized & Modern Fleet:** Strong owned fleet of 40 marine assets, including 26 dredgers, with recent builds/rebuilds. * **Proven Execution & High Win Rate:** Superior Order Win Ratio >50% and extensive experience in complex projects like rock dredging. * **Strategic Alignment:** Positioned to benefit from India's Blue Economy & Maritime Vision 2047. * **Strong Management Team:** Experienced leadership with deep industry knowledge.

**Key Metrics and KPIs specific to KMEW:** * **Balance Order Book:** Rs. 1,749.89 Crores (as of Sept 30, 2025). * **EBITDA Margin:** Consistently above 30%, reaching 40.46%. * **Owned Fleet Size:** 40 Marine Assets. * **Green Tug Contracts:** Two 15-year contracts secured, total Rs. 652.63 Crores. * **IWAI Shipbuilding Orders:** Rs. 195.50 Crores for 24 crafts.

**Management Outlook and Guidance:** * Goal to scale to a billion-dollar enterprise and beyond. * Green Tug segment to emerge as a stand-alone business vertical. * Active interest in projects worth approx. Rs. 2,000 plus Crores. * Strategic focus on contracts with minimum 35% EBITDA margin. * Participating in multiple bids across Dredging, Chartering & Shipbuilding.

**Recent Developments and Initiatives (H1 FY25-26 Key Achievements):** * Finalized Strategic Roadmap for the Next Decade. * Successfully Raised Rs. 285 Crores through Preferential Issue. * Achieved 7 Significant Order Wins totalling Rs. 968.69 Crores. * Secured two consecutive maiden and one of domestic highest-value contracts of Green Tug (Rs. 652.63 Crores). * Entered the Commercial Cruise Services sector (Narmada Voyage). * Secured two major IWAI Shipbuilding Orders (Construction of 24 Crafts). * Geographic Expansion into Pondicherry & Madhya Pradesh.

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J. TABLES

Table 1: KNOWLEDGE MARINE & ENGINEERING WORKS LIMITED - Consolidated Financial Metrics (in Lakhs)

| Metric | H1 FY26 (Un-Audited) | H1 FY25 (Un-Audited) | FY25 | FY24 | | :-------------------------- | :------------------- | :------------------- | :------------ | :------------ | | Revenue from operations | 9,864.80 | 9,562.80 | 20,070.67 | 16,358.31 | | Cost of Material Consumed | 4,815.68 | 4,809.41 | 9,509.84 | 9,873.81 | | Employee Expenses | 417.29 | 306.90 | 696.33 | 453.65 | | Other Expenses | 640.37 | 760.15 | 2,042.99 | 1,043.30 | | EBITDA | 3,991.46 | 3,686.34 | 7,821.51 | 4,987.55 | | EBITDA Margin | 40.46% | 38.55% | 38.97% | 30.49% | | Depreciation | 711.68 | 528.17 | 1,143.17 | 826.13 | | EBIT | 3,279.78 | 3,158.17 | 6,678.34 | 4,161.42 | | EBIT Margin | 33.25% | 33.03% | 33.27% | 25.44% | | Finance Cost | 745.34 | 384.54 | 978.79 | 393.84 | | Other Income | 177.17 | 156.10 | 520.19 | 312.57 | | Exceptional Items | - | - | - | - | | Profit before Tax | 2,711.61 | 2,929.73 | 6,219.74 | 4,080.15 | | Profit before Tax (%) | 27.49% | 30.64% | 30.99% | 24.94% | | Tax | 413.62 | 582.47 | - | 1,259.60 | | OCI & Non-Controlling Interest | 51.54 | 60.83 | -21.18 | -5.30 | | Profit After Tax | 2,246.45 | 2,286.43 | 4,981.32 | 3,057.82 | | PAT Margin | 22.77% | 23.91% | 24.82% | 18.69% | | EPS (As per Profit after Tax) | 20.8 | 21.17 | 46.12 | 28.31 |

Table 2: KNOWLEDGE MARINE & ENGINEERING WORKS LIMITED - Consolidated Balance Sheet (Half-Year ended 30.09.2025 Un-Audited, in Lakhs)

| ASSETS | 30.09.2025 | | :-------------------------------------- | :--------- | | **Total Assets** | **43,223.45** | | **Non-Current Assets** | **28,884.43** | | Property, Plant and Equipment | 18,971.33 | | Capital Work-in-progress | 2,703.21 | | Goodwill | 56.00 | | Other Intangible Assets | 2.25 | | Non-Current Investments | 4,632.88 | | Trade Receivables, Non Current | 2,488.62 | | Other non-current financial assets | 30.14 | | **Current Assets** | **14,339.02** | | Inventories | 39.66 | | Trade Receivables, Current | 7,678.52 | | Cash & Cash Equivalents | 1,767.08 | | Bank Balance Other than Cash & Cash Equivalents | 3,241.79 | | Loans, Current | 617.77 | | Other Current Financial Assets | 994.20 | | **EQUITY AND LIABILITIES** | **43,223.45** | | **Total Equity** | **24,260.92** | | Equity Share Capital | 1,080.10 | | Other Equity | 22,898.82 | | Non-Controlling Interest | 282.00 | | **Total Liabilities** | **18,962.54** | | **Non-Current Liabilities** | **9,844.99** | | Borrowings, Non-current | 8,740.69 | | Provisions, Non-Current | 32.32 | | Deferred Tax Liabilities (Net) | 1,071.98 | | **Current Liabilities** | **9,117.55** | | Borrowings, Current | 5,827.74 | | Total Outstanding dues of Micro Enterprises and Small Enterprises | 114.55 | | Total Outstanding dues of other than Micro Enterprises and Small Enterprises | 1,624.27 | | Total Trade Payable | 1,738.82 | | Provisions, Current | 550.53 | | Current Tax Liabilities (Net) | 1,000.46 |

Table 3: KNOWLEDGE MARINE & ENGINEERING WORKS LIMITED - Consolidated Cash Flow Statement (Half-Year ended 30.09.2025 Un-Audited, in Lakhs)

| Cash Flow from Operating Activities | H1 FY26 (Un-Audited) | | :------------------------------------------ | :------------------- | | Profit before Tax | 2,711.61 | | Adjustments for Non-Operating Items | 984.48 | | Operating Profit before Working Capital Changes | 3,696.09 | | Changes in Working Capital | -7,304.71 | | Cash Generated from Operations | -3,608.62 | | Direct Taxes paid | -166.87 | | **Net Cash from Operating Activities** | **-3,775.49** | | **Cash Flow from Investing Activities** | **217.19** | | **Cash Flow from Financing Activities** | **4,058.20** | | Net increase/ (decrease) in Cash & Cash equivalent | 499.89 | | Cash and cash equivalents at the beginning of the year | 4,508.98 | | Cash and cash equivalents at the end of the year | 5,008.87 |

Table 4: KNOWLEDGE MARINE & ENGINEERING WORKS LIMITED - Balance Order Book (as at Sept 30, 2025, in Lakhs Excl. GST)

| Project Category & Client/Project Name | Awarded Value | Balance Value | Duration | End Date | | :------------------------------------- | :------------ | :------------ | :---------- | :--------- | | **Dredging Projects** | | | | | | RKEC Projects Limited (Veraval Fishery Harbor) | 3,985.00 | 3,985.00 | 2 Years | 31/10/27 | | Sand Mining Contracts in Bahrain | 48,978.00 | 33,977.11 | 5 years | 28/02/29 | | IWAI (Farakka - Kahalgaon, NW-1) | 8,310.05 | 6,458.05 | 3 years | 22/04/27 | | IWAI (Barh-Digha, NW-1) | 6,198.63 | 5,578.77 | 3 years | 14/10/27 | | Dredging Corporation of India (Deendayal Port) | 1,506.48 | 1,506.48 | 3 Years | 20/10/27 | | IWAI (Sultanganj-Mahendrapur, NW-1) | 12,494.50 | 11,245.05 | 3 Years | 01/02/28 | | Dredging Corporation of India (NER (NW-16)) | 3,350.00 | 3,015.00 | 3 Years | 31/12/28 | | Dredging Corporation of India (Kandla Creek) | 4,106.40 | 3,036.13 | 1 Year | 07/03/26 | | Dredging Corporation of India (Ponducherry Port) | 2,400.00 | 1,866.00 | 3 Months | 21/11/25 | | Dredging Corporation of India (Paradip Port) | 614.62 | 451.75 | 4 Months | 15/12/25 | | Deendayal Port Authority (Ghogha Ro-Ro Terminal) | 4,033.40 | 3,845.90 | 1 Year | 09/09/26 | | Deendayal Port Authority (Bunder Basin) | 77.84 | 77.84 | 4 Months | 28/02/26 | | **Total Dredging Projects** | **96,054.92** | **75,043.07** | | | | **Charter Hire Projects** | | | | | | Vishakhapatnam Port Authority (20 Knots Speed Patrol Boat) | 500.94 | 122.10 | 5 Years | 04/02/27 | | Deendayal Port Authority (2 Mooring Launches) | 912.46 | 195.49 | 5 years | 13/12/26 | | Vishakhapatnam Port Authority (15 Knots Speed Patrol Boat) | 186.42 | 7.83 | 3 years | 02/01/26 | | Deendayal Port Authority (Service Boat) | 959.13 | 471.94 | 5 years | 03/05/28 | | Mumbai Port Authority (Two Dock Tugs) | 3,449.20 | 3,017.21 | 7 Years | 31/12/31 | | Paradip Port Authority (20 Knots Speed Patrol Boat) | 500.94 | 396.36 | 5 Years | 31/10/29 | | Vishakhapatnam Port Authority (Pilot Launch) | 344.93 | 148.30 | 3 years | 24/03/27 | | V.O.Chidambaranar Port Authority (20 Knots High Speed Patrol Boat) | 496.65 | 409.34 | 5 Years | 31/12/29 | | New Manglore Port Authority (25 Knots Security Patrol Boat) | 969.51 | 869.70 | 5 Years | N/A | | Mumbai Port Authority (Two Patrol Boats) | 1,633.13 | 1,516.80 | 7 Years | 17/05/32 | | V.O.Chidambaranar Port Authority (60T Bollard Pull ASD Tug) | 8,156.29 | 8,156.29 | 7 Years | 06/06/33 | | Dredging Corporation of India (Survey Boat) | 912.75 | 845.50 | 3 Years | 25/05/28 | | V.O.Chidambaranar Port Authority (60T Bollard Pull Green Tug) | 32,692.92 | 32,692.92 | 15 Years | 25/10/42 | | Vishakhapatnam Port Authority (60T Bollard Pull Green Tug) | 32,570.90 | 32,570.90 | 15 Years | 25/10/42 | | **Total Charter Hire Projects** | **84,286.37** | **81,420.87** | | | | **Ship Building Projects** | | | | | | IWAI (Dredger Ancillary Units) | 6,838.44 | 5,812.67 | 20 Months | 06/04/27 | | IWAI (4 CSD & Ancillary Units) | 12,712.00 | 12,712.00 | 2 Years | 09/10/27 | | **Total Ship Building Projects** | **19,550.44** | **18,524.67** | | | | **Total Balance Order Book** | | **174,988.61**| | |