Garden Reach Sh. Management Discussions


1.1 Global Scenario Shipbuilding

Geopolitical scenario brought about by the Russia-Ukraine conflict with the consequent impact on Global Supply chains and the waning of the COVID-19 epidemic, were key developments of the year 2022. The inevitable transition to Green Energy and the potential disruptive changes driven by emerging digital technologies have presented themselves as opportunities for the industry. The shipyard is well poised to capitalize on these opportunities to develop green and state-of the art digital ships for Defense and Commercial applications. As per a recent study by a consultancy group, Global shipbuilding market is valued at more than $200 Bn comprising Naval ships, Commercial ships and recreational vessels. The Military ship market is poised to be a $907 Bn worth cumulative industry by 2027 with demand driven primarily by Asia Pacific, eastern Europe and sub-Saharan African countries. The global naval shipbuilding market is being driven by international events and developments such as growing tensions in the Asia-Pacific region that have already resulted in an increased emphasis on naval modernization programs and a resurgence of submarine inventory proliferation by countries in the region as well as NATO and the United States. Market growth is expected, also given the need to replace older vessels in the naval fleet of major economies and the increase in the level of sophistication in combat technology. The global naval shipbuilding market would peak during the first half of this decade, driven by demand for both surface combatants and submarines. Globally, the average age of warships is as high as twenty-five (25) years and around 180 procurement programs are under execution in various countries.

hip Repair

Ship repair market across defence & commercial customers which together presents an opportunity worth Rs.15,000 to Rs.16,000 crore globally in the next 6 years. Global ship repair market is currently dominated by shipyards in China, Singapore and Middle East largely due to the availability of a skilled workforce and latest technology. Though Indias share in global ship repair is less than 1%, the countrys location is favourable with 7% to 9% of the global trade passing within 300 NM of the coastline. Ship repair industry being labour intensive, India has the advantage of having a strong work force to cater for the requirement. However, the untapped potential in the Indian ship repair market can be attributed to the presence of competing international ship repair yards on major trade routes and a capability gap of Indian yards in repairing certain kinds of vessels.

1.2 The Indian Scenario Shipbuilding

Indian defence shipbuilding presents a large opportunity worth more than Rs.1.5 – Rs.2 lakh crore over the next 12-15 years. Additionally, commercial shipbuilding also presents an opportunity worth Rs.12000 – Rs.15000 crore/year with coastal shipping, dredgers, ferries & cruises and gas carriers emerging as the biggest segments. Further, the Maritime India Vison 2030 (MIV 2030) targets major increase in the utilization of National Waterways and coastal routes for increased movement of cargo and passengers. With the number of operational waterways targeted to increase from 16 to 23 by 2030, the annual cargo movement on these waterways is expected to grow from 73 MT per Annum to over 200 MT per Annum. Annual passenger movement by ferry operations is also projected to increase from 14 crore to 70 crore by 2030. These opportunities, along with the National thrust to transition to Green Shipping also presents a new opportunity for shipbuilders in the country. Defence shipbuilding in India continues to remain an area of focus of both the public and private sector shipyards. While the five public sector shipyards including your Company are the frontrunners in the defence shipbuilding space, private shipyards are also undertaking specific measures to enhance competence and modify their existing shipbuilding infrastructure to suit the needs of the Indian Armed Forces. Among the private shipyards, L&T Shipbuilding and Shoft Shipyard, which entered the shipbuilding market as commercial shipbuilders, have been repositioning themselves as capable warship builders. The Indian shipbuilding industrys order book is expected to receive a boost on account of the Indian Navy and Indian Coast Guards ambitious ship acquisition plans as these forces plan to have a fleet of 200 ships each. Their combined shipbuilding programme spanning over next 14-15 years, indicates that they would place orders for more than 150 warships in the coming years. The shipbuilding policy announced by the Government of India granting financial assistance to the shipbuilding industry (for non-defence ships) aims to help Indian Shipbuilders to be more cost competitive at a global level. Our government has recognised the need for further developing transportation network of the rivers and various initiatives including those under the new ‘National Logistics Policy is expected to provide a thrust to Inland Water Transport (IWT) and create demands for Indian built ships.

Ship Repair

Substantial market opportunities are also anticipated in the coming decade in the area of maintenance, repairs, refits and upgrades of Indian Navy and Indian Coast Guard warships. To capitalize on the same, GRSE intends to increase focus on repair and refitting of Indian Navy and Indian Coast Guard vessels. The untapped potential in the Indian commercial ship repair market can be attributed to the presence of competing international ship repair yards on major trade routes and a capability gap of Indian yards in repairing certain kind of vessels. Other reasons of cost disadvantages include high cost of financing, lack of supply of ship spares in India and technology related issues increasing ship repair execution cycle time. However, the present global economic scenario provides a window of opportunity to Indian ship repairers. Under ‘MIV 2030, the government is giving a strong push with initiatives such as channelizing the domestic demand leveraging Atmanirbhar Policy, increase and improve infrastructure through better access to financial instruments, ease of doing business and improve efficiencies by creating free trade depots, maritime clusters etc.


Being a Defence PSU, GRSE is primarily engaged in construction of warships for Indian Navy and Indian Coast Guard. Over the last 63 years, GRSE has built around 790 platforms which include 108 warships to Indian Navy, Indian Coast Guard, Govt. of Mauritius & Govt. of Seychelles which is the highest number of warships built & delivered by any shipyard in the country. From building of 05-ton boats to 24600-ton Fleet Tanker, GRSE has proved its mettle as the premier warship builder of the nation. Over the years, GRSE has established well proven capabilities for in-house ship design & ship building and has made significant contribution to the success of indigenous warship construction program by successfully designing and building a multitude of complex warships such as Frigates, Anti-Submarine Warfare Corvettes, Missile Corvettes, Fleet Tanker, Landing Ship Tank (Large), Landing Craft Utility (LCU), Offshore Patrol Vessel, Fast Patrol Vessels, Inshore Patrol vessel, Water Jet Fast Attack Crafts, etc. The shipyard has also embarked on a mission to develop the capability to design and construct zero emission vessels and one such vessel is currently under construction with delivery scheduled by the third quarter of 2023-24. Unmanned Surface Vessels, Autonomous Underwater Vehicles and Ship Based Drones are some of the other focus areas for the shipyard. GRSE has created its Ship Repair Division focusing on ship repair business both in commercial and defence segments. Towards augmentation of infrastructure for undertaking ship repair and refits on a large scale, GRSE had signed a Concession Agreement with Syama Prasad Mookerjee Port, Kolkata (SMPK) on 07 Oct 2021 towards development & utilisation of three existing dry docks of Khidderpore Dry Dock (KPDD) complex of SMPK located at Khidderpore, Kolkata. Apart from shipbuilding & ship repairs, GRSE has diversified into Engineering Business. The engineering product profile includes pre-fabricated steel bridges of various ranges & types, various deck machinery items such as Anchor Capstans, Boat Davits, Pumps etc. The Engine Division of the company is involved in Assembly/ Testing/ Overhauling of MTU Diesel Engines and manufacture of Diesel Alternators.


Considering the dynamic nature of the environment, a SWOT Analysis of GRSE was carried out and the following are identified: Strengths

(a) World class infrastructure for shipbuilding enabling simultaneous construction and fitting out of 20 small, medium and large ships.

(b) Proven capability to produce wide spectrum of ships ranging from 5 Ton Boats to 24,600 Ton fleet tanker.

(c) Dedicated stand-alone facility (Raja Bagan Dockyard) with an area of 33 Acres and 550 M water front for concurrent construction/ fitting out of five small ships.

(d) Dedicated Fitting out Jetty Unit to concurrently undertake post-launch outfitting of four large ships.

(e) Proven in-house capability for ship design in terms of good infrastructure with seamless IT Network including cutting edge Design Software and a team of over a 100 Design Engineers.

(f) Dedicated Virtual Reality (VR) Lab for detailed design and evaluation.

(g) Well established Project Management System with latest Project Management software.

(h) ISO 9001:2015, ISO 45001:2018, ISO 14001:2015 & ISO 50001:2018 certification.

(i) A robust ERP system encompassing all areas of business operations.

(j) Competent and highly skilled human resource at all levels.

(k) In-house skill development Centre.

(l) Efficient Supply Chain Management system leveraging AI based Procurement Accelerator.

(m) Financially strong Company with a good order book visibility.

(n) A Profit making, Dividend paying and Zero Debt Company.

(o) Long standing relationships with main customers like Indian Navy and Indian Coast Guard.

(p) MoUs with Global OEMs for localization & co-production of Marine Diesel Engines and Waterjets.

(q) Dedicated R&D team working on new technology areas including Green Tech, Autonomous Vessels and AI.


(a) Constraints of a riverine shipyard due to limitations in the depth and width of navigable channel with effects of silting in river.

(b) Location of the Company in thickly populated residential areas having narrow roads.

(c) Weak shipbuilding eco-system in eastern part of India.


(a) Acquisition plan of Indian Navy and Indian Coast Guard aimed at significant Expansion of fleet size.

(b) Acquisition plan of MHA & IWAI.

(c) Export potential especially for small and medium size warships and patrol vessels to South East Asia, West Asia,

African countries and Latin America.

(d) Government policy on thrust for exports including extension of Line of Credit (LoC).

(e) Repair and Refit of Ships for Indian Navy and Indian Coast Guard

(f) Capacity and Capability enhancement through collaboration with competent private shipyards

(g) Acquisition of/Collaboration with suitable shipbuilding or repair yards in India and abroad.

(h) ScopeforincreasingbusinessvolumesinBridges,Engineering Products and Engines through aggressive marketing, capacity augmentation and product diversification.

(i) New technology Products like Drones, Unmanned Surface Vessels (USVs) and Autonomous Underwater Vessels (AUVs)

(j) Green Energy Platforms


(a) Competition from Private and Public Shipyards.

(b) Geographical location and environment.

(c) Competition for Engineering Products from small players.

(d) Inadequate local Vendors for major shipbuilding activities.

(e) Inordinate delay in supply of certain critical equipment by customer nominated firms leading to time overrun of projects.

From the above SWOT analysis, it emerges that the Company needs to leverage its strengths through Technology driven processes to create a competitive advantage for maximizing available opportunities, while continuously improving internal efficiencies and modern HR practices towards becoming a well-diversified, globally competitive and growth focused shipyard. There are good opportunities available to the Company to build Defence, Commercial, Coastal Security and Inland Water Vessels and also in the field of ship repairs. New opportunities are emerging in the export market for Defence as well as Commercial shipbuilding which needs to be leveraged through a competitive approach. Accordingly, the Companys efforts are being focused in exploiting such opportunities based on the Companys strength and on minimizing the adverse effect of its weaknesses. The strengths of infrastructure and production facilities are channelized to develop reliable vendors who can continuously support shipbuilding in order to address the emerging opportunities and reducing the impact of prevailing threats.


We intend to pursue the following principle strategies to exploit our competitive strengths and grow our business:

(a) Thrust towards cost reduction and improvement of internal efficiency leading to enhanced productivity.

(b) Leverage New age technology in operations.

(c) Adopt Industry 4.0 suitably in business operations of the Shipyard.

(d) Focus on enhancement of Customer satisfaction through "On-time" deliveries and exceed Quality expectations.

(e) Maximise indigenous content in warship construction.

(f) Optimise utilization of space and integrated construction facility to bring down Build Period.

(g) Business Development through concerted marketing effort, focusing on Exports.

(h) Developing allied engineering Businesses with focused approach.

(i) Enhance Human Resource Development through identification of competency gaps and imparting suitable training to employees keeping overall business strategy on a focal point.

(j) Facilitate development of vibrant eco system for Shipbuilding activities in Eastern region.

(k) Product Diversification with focus of New technology products including Green Energy Platforms and Autonomous Vehicles.


The Ministry of Corporate Affairs vide Notification dated 23 Feb 2018 granted exemption to the companies engaged in defence production to the extent of application of relevant Accounting Standard on segment reporting. Hence, the segment-wise / product-wise performance is not appended to this Report.


While the overall Indian Shipbuilding industry has witnessed healthy growth in the recent past, Defense Shipbuilding segment looks promising on account of the ship acquisition plans of the Indian Navy and the Coast Guard.

Your Company is predominantly in the defence shipbuilding segment and has gained sufficient expertise in large, medium and small size ships required by Indian Navy and Indian Coast Guard, in particular, and generally enjoys excellent reputation for ships that it has built. Your Company has delivered its 108th warship (a Fast Patrol Vessel to Indian Coast Guard) on 31 Dec 2022 thereby achieving the distinction of being the only Shipyard in the country which has achieved the feat of crossing the coveted 100 mark.

GRSE is operating in a highly competitive environment across all its product segments. The private shipbuilding players are competitors for orders from Defence sectors where the Company has predominant business. Despite competition from International and Indian Shipyards in Public and Private sector, your Company continues to make efforts to secure shipbuilding orders at domestic and international level and is maintaining the growth momentum. In order to move forward the ship repair activity, a Memorandum of Understanding (MoU) followed by a concession agreement have been signed between GRSE & SMP (KoPT) to develop and utilize 03 existing dry docks of SMP which are strategically located. The close proximity of this facility provides a boost to the Ship repair efforts of GRSE. Docking and repair /refit of a number of commercial as well as Indian Coast Guard Ships were successfully done in this newly acquired facility during FY 2022-23. Under the said agreement, both GRSE & SMPK, Kolkata look forward to developing a dynamic partnership in exploring new business opportunities in Ship repair & refit of defence & commercial segments, leading to revenue generation and contributing to skill development, infrastructural up-gradation and employment generation in Kolkata. This collaboration will also contribute to the future strategy of GRSE to take on additional shipbuilding activities including repair & refit of ships. The Company is also giving additional thrust to its ship repair activities by strengthening the teams.


The following are the major initiatives taken to ensure sustained performance and growth:

a) Develop Design Department into a Centre of Excellence.

b) Revamping of Material Management / Supply Chain Management.

c) Vendor development & building long term Partnerships.

d) Improve Project Management System for shipbuilding projects.

e) Upgrade shipbuilding technology / processes.

f) Identify and implement new measures to improve productivity at GRSE

g) Upgrade products of Bridges Unit, Deck Machinery Unit and Diesel Engine Plant

h) Business Development through concerted marketing effort for Exports.

i) Developing Businesses other than shipbuilding as separate profit centres

j) Creating Strategic Partnership for Export / Special Projects

k) Measures for increasing VoP from Ship Repair (SR) Business

l) Measures for increasing VoP of Portable Bridges, Deck

Machinery, marine pump and Diesel Engine Businesses

m) Achieve 100% compliance for working on PLM software

n) Reduction in Revenue Expenditures

o) Improvement of Ease of Doing Business (EoDB)

p) Efficient Risk Analysis and Mitigation Plans

q) Leverage new age Technology (ICT) for better management of operations

r) Shipyard Capacity Enhancement

s) Creation of a "Innovation & New Technology" department

t) Leverage Indian Startup eco system to facilitate new technology adaptation


The Company has an adequate system of internal control implemented towards achieving effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations which is appropriate to the nature and size of the business. The system comprises well defined organisation structure and procedures issued by management covering all vital and important areas of activities. The internal control system ensures that the resources of the company are optimally used for business purpose and safeguard from loss, misuse and physical impairment. Process owners are responsible to ensure compliance with these policies & procedures. An independent Internal Audit mechanism is in place for conducting audit of various operational and financial matters and for monitoring compliances of companys procedures and policies with well-defined annual audit programme. Based on the report of Internal Auditors, process owners undertake corrective action(s) in their respective area(s). Significant audit observations and corrective action (s) thereon are reported to the Audit Committee of the Board of Directors. The Company is also subject to Audit by Comptroller & Auditor General of India. The Audit Committee reviews adequacy and effectiveness of your Companys internal control environment and monitors the implementation of audit recommendations.


The Company has a Board approved Risk Management Policy and comprehensive Enterprise Risk Management framework in place for identification, assessment, treatment and reporting of the risk. The Companys Enterprise Risk Management (‘ERM) process is based on ISO 31000 standards. Risk Management Committee (‘RMC) of the Board provides oversight and sets the tone for implementing the ERM framework across the organisation. It reviews the status of key risks, progress of ERM implementation across locations, as well as risk governance. The key risks faced by the company are analysed by the Risk Management Steering Committee (RMSC), which is responsible for adopting & implementing the risk management framework and leading the risk management initiative across the company. The Chief Risk Officer (CRO) is the convener of RMC & RMSC. Risk management committees at unit level analyse risks associated with their respective areas, prepare mitigation plans, ensure implementation and also inform the top management. The Committee updates the Board from time to time on risk management and mitigation to ensure that executive management controls risk by means of a properly designed framework. The major risks and concerns of the Company are:

Delay in the deliveries may materially and adversely affect our reputation, operations and financial conditions.

Unsatisfactory quality of work performed by subcontractors could result in a negative impact on our business, reputation and financial conditions.

Non-availability of critical imported raw material in the international market coupled with exchange rate fluctuation and volatile prices adversely affects the financials and the competitive edge of the Company.

The Company is operating its business on fixed price contract and competitive bidding basis. Since, many of the projects are long construction period, the Company will not able to pass on the increase in price of the raw material and equipment to its customer.

Changing laws, rules and regulations and legal uncertainties, may adversely affect our business and future earnings.

The waterfront of our Company is prone to siltation and involves constant maintenance of dredging to maintain the water depth.

Dependence on limited customers for new contracts and quantum of allocation of Defence budget.

Risk of natural disasters and pandemic.


The Performance Highlights of the Company during the year ended 31 Mar 2023 are as follows:

Particulars As on 31 Mar 2023 As on 31 Mar 2022
Gross Income 2,762.98 1,915.77
Revenue from Operations 2,561.15 1,754.45
Value of Production 2,547.84 1,745.28
Gross Profit 350.86 294.38
Profit Before Exceptional Items & Tax 305.22 264.93
Exceptional Item - -7.69
Profit Before Tax 305.22 257.24
Tax Expense 77.09 67.71
Profit After Tax 228.12 189.53
Net Worth 1,413.82 1,257.89
Book Value per Share (in Rs.) 123.42 109.81
Earnings Per Share (in Rs.) 19.91 16.55
Dividend Per Share (in Rs.) 6.20 5.80

Ratios Analysis:

Ratios As at 31 March, 2023 As at 31 March, 2022 % of Variance
Debtors Turnover 25.33 10.65 138%
Inventory Turnover 1.20 1.68 -29%
Interest Coverage Ratio 48.10 181.04 -73%
Current Ratio 1.07 0.93 15%
Debt Equity Ratio 0.007 0.008 -13%
Gross Profit Margin (%) 12.70 15.36 -17%
Net Profit Margin (%) 8.26 9.89 -17%
Return on Net Worth (%) 16.14 15.07 7%


Import and Export As on 31 Mar 2023 As on 31 Mar 2022
Imports made during the year 461.24 194.88
Exports made during the year 59.78 60.94

Debtor Turnover: Debtors turnover ratio in FY 22-23 has been improved to 25.33 as compared to 10.65 in FY 21-22. Trade Receivables have reduced during the year on realization of outstanding receivables from various customers.

Inventory Turnover Ratio: Around 15 ships under various projects are under concurrent construction at GRSE and business partners premises. Hence, inventory has increased almost by 143%.

Interest Coverage Ratio: Interest charge on Bank Overdraft and Finance Cost Increased by Rs. 504 lakh during the year.

Gross Revenue registered a rise of 44.60% from Rs. 1,915.77 crore in 2021-22 to Rs. 2,762.98 crore in 2022-23.

Value of Production has increased from Rs. 1,745.28 crore in 2021-22 to Rs. 2,547.84 crore in 2022-23.

Net Profit (PBT) registered a rise of 18.65%, increased from Rs. 257.24 crore in 2021-22 to Rs. 305.22 crore in 2022-23.

Value Addition per Employee has increased from Rs. 45.30 lakh in 2021-22 to Rs. 54.60 lakh in 2022-23.

Book Value per share has increased from Rs. 109.81 in 2021-22 to Rs. 123.42 in 2022-23.


The details regarding Human Resource Development and Industrial Relations are more specifically covered in the Directors report.


The employee strength of your Company was 1747 persons as on 31 Mar 2023.

Total Employees as on 31 Mar 2023 Officers Supervisors Office Workmen
Assistants Direct Indirect Total
1,747 491 181 56 811 208 1,019


Your Company contributes in all aspects for clean and green environment by systematically integrating best practices to bring in cleaner technologies and greening the environment through recycle, reuse and reduce approach. Effluent and Sewage Treatment Plant are being operated. Various environmental protection activities such as water conservation, tree plantation, disposal of hazardous waste and metal scrap, e-waste management and use of solar energy have been carried out.


Relevant information in this regard is disclosed in the ‘Directors Report.


Relevant information in this regard is disclosed in the section ‘Annual Report on CSR Activities provided at Appendix – "E" of the Directors Report.

Cautionary Statement- Certain statements made in the Management Discussion and Analysis Report related to the Companys objectives, projections, outlook, expectations, estimates and other may constitute ‘forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections and so on whether expressed or implied. Several factors could make significant difference to the Companys operations. These include climatic conditions and economic conditions affecting demand and supply, government regulations and taxation, natural calamities and so on over which the Company does not have any direct/indirect control.