Sadhav Shipping Ltd Management Discussions

Sadhav Shipping Limited (SSL), with a diversified fleet of 20+ specialized vessels and nearly three decades of experience, is a leading maritime solutions provider in India. The Company owns and operates modern marine assets to service offshore logistics, port operations, and oil spill response. With an average fleet age of 9-10 years, SSL ensures efficient, reliable, and compliant operations aligned with global best practices.

Core Business Verticals:

SSL is a trusted partner of ONGC, Indias largest Oil & Gas company, through long-term charter contracts. Empanelment with ONGC validates SSLs operational excellence and positions it for future growth in the offshore segment.

With expansion plans in Joint Venture with United Petro Group, Sadhav Shipping is poised to enter in the markets of Shipbuilding, Port Infra and Ship Owning & Leasing.

GLOBAL OUTLOOK

Offshore Logistics:

The offshore logistics sector supports the energy industry by transporting crew, equipment, and materials to offshore exploration and production sites. The sector is also expanding with the rise of offshore wind energy.

Demand Drivers:

- Crude Oil Prices - the single largest determinant of OSV demand.

- Geopolitical Events - conflicts have tightened supply chains, supporting higher oil prices.

- Energy Transition - shift away from fossil fuels is gradual; demand remains robust.

- Renewables - offshore wind installations are creating parallel demand.

Supply Gaps:

- OSV supply remains constrained; cold-stacked units are unviable.

- Newbuild orders are limited due to high costs and financing challenges.

- Clarksons Research projects OSV utilisation at 78% by end-2025, with supply growth <1%. Implication for SSL: Tight supply and rising utilisation globally are favourable, supporting higher day rates and long-term contracts.

INDIAN OUTLOOK - OFFSHORE ENERGY

India imports over 80% of crude oil demand. ONGC, with over 40 offshore rigs, is the largest demand driver.

- Production Targets: ONGC is targeting a 20% cumulative increase in oil and gas production over the next three years (by FY27)

- Industrial Expansion: Rapid growth in diesel, jet fuel, and LPG demand.

- Challenges: Shortage of drilling rigs and marine assets delaying exploration.

Implication for SSL: ONGC being a premier customer in the Oil & Gas market has started introducing fuel clauses in the contract which in effect gives ships with better fuel efficiency an edge to win the contracts at higher prices.

Sadhav Shipping Ltd. has drawn plans to invest in new tonnages via capital purchase and other models so as to be competitive in the fuel criteria of the customer.

Oil Spill Response (OSR)

The global oil spill management market was valued at USD 125.6 billion in 2022, projected to grow at 3.5% CAGR till 2030.

Drivers:

- Rising oil transport by sea/pipelines.

- Stricter safety regulations.

Investments in preventive measures.

In India, the Coast Guard is the nodal authority under NOS-DCP. SSL was the first mover in port- based OSR, with presence at Mumbai Port, JNPA, and all Major Ports.

Sadhav has strategically partnered with DESMI Ro Clean AS, a Demark based Oil Spill equipment manufacturer to support with OSR systems in India. Under the new partnership DESMI and Sadhav are working together to garner work in OSR for Supply and Services in this sector.

Future Strategy: Expansion of services and supply in Indian Coast Guard and Non-Major Ports. Sadhav is well poised to capitalise on the partnership with DESMI Ro Clean as it can borrow the experience of the global OSR Major to bid for contracts in India and abroad.

STRATEGIC JOINT VENTURE WITH UNITED PETRO SHIPPING PTE LTD.

In Q4 FY25, Sadhav Shipping Ltd. entered into a landmark Joint Venture agreement with United Petro Shipping PTE Ltd. to establish a state-of-the-art Integrated Maritime Complex in India. This collaboration marks a pivotal step in SSLs long-term growth strategy, aimed at strengthening offshore logistics infrastructure and expanding service capabilities across energy corridors.

The JV is structured with balanced governance·each partner appointing one director to the board· and is free from any cross-shareholding or conflict of interest. This initiative is expected to unlock new revenue streams, enhance operational synergies, and reinforce SSLs positioning as a trusted partner in Indias evolving offshore ecosystem

FINANCIAL PERFORMANCE (Standalone)

Particulars	FV 24 (TCr)	FY 25 (T Or)
Revenue from Operations	84.24	96.86
Other Income	0.46	0,58
Total Revenue	84.7	97.44
Profit Before Tax	12.16	17,41
Profit After Tax	9.14	U.75
Net Worth	88.01	99.47

Analysis: Revenue grew 15% YoY, driven by Offshore Vessels. PAT rose 29%, reflecting efficiency gains.

SEGMENT-WISE REVENUE

Segment	FY24 (TCr)	FY 25 Cr)
Offshore Vessels	36.41	61.04
Port Services	31.65	24.06
Oil Spill Response	16.18	11.77
Total	84.24	96.87

Commentary: Offshore vessels contributed 63% of revenue in FY25. Port Services and OSR moderated due to contract cycles.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

As of 31 March 2025, SSL employed 394 personnel. The Company focuses on safety, training, and

sustainability compliance while maintaining work-life balance. Industrial relations were cordial.

INTERNAL CONTROLS & ADEQUACY

SSL has a robust internal control framework. Internal Audit ensures compliance and asset security.

Audit Committee reviews are conducted periodically, and corrective actions are implemented

promptly.

KEY RISK LANDSCAPE

1.Market/Rate Risk: Charter Rate Volatility

• Exposure: SSLs revenue model is closely tied to offshore vessel deployment and charter contracts, many of which are medium- to long-term. However, tender-based business and seasonal demand fluctuations·especially in oil & gas-linked operations·introduce volatility.

• Implication: Rate compression during downturns or contract non-renewals can impact cash flows and EBITDA margins. Client concentration further amplifies this risk.

• Mitigation: Diversification of client base and service bouquet to Ports and Offshore clients. SSL has added in 3 new clients in FY 24-25.

2. Technological Disruption: Environmental Compliance Acceleration

• Exposure: The IMOs decarbonization roadmap (e.g., EEXI, CII) and Indias push for green shipping are accelerating the need for retrofits, alternative fuels, and digital monitoring systems. Push for DP2 requirements and age norms of Govt. of India.

• Implication: SSL must invest in fleet upgrades and ESG-aligned tech to remain competitive and compliant. Delay or underinvestment could lead to regulatory penalties or loss of tenders.

• Mitigation: Phase wise fleet upgradation program, starting with conversion of current fleet, SSL has converted Canara Pride to DP2 ship.

3. Capital Intensity: High Funding Requirements

• Exposure: Fleet expansion, retrofitting, and tech integration demand significant capex.

• Implication: Maintaining a healthy debt-equity ratio and securing cost-effective financing is critical. Overleveraging or delayed funding can stall growth and erode investor confidence.

• Mitigation: SSL believes in prudent financing of its assets and has been banking with Bank of India, EXIM Bank and YES Bank for asset financing. The company is also looking at other hybrid ways of holding and operating assets.

4. Regulatory & ESG Risk: Compliance Complexity

• Exposure: SSL operates in a tightly regulated space·subject to DG Shipping norms, Customs & Excise scrutiny, and IMO mandates. ESG expectations from institutional investors are also rising.

• Implication: Non-compliance or reputational missteps could lead to tender disqualification, fines, or stakeholder backlash. Proactive governance and transparent ESG reporting are essential.

• Mitigation: SSL representatives are active participants in the industry bodies discussing with Directorate General of Shipping and Indian Register of Shipping. As an effect the ESG reporting has become online with swachhsagar portal.

5. Foreign Exchange Risk: USD-Linked Revenue & Costs

• Exposure: Vessel procurement, maintenance contracts, and some charter revenues are USD- denominated, while operational costs are INR-heavy.

• Implication: FX volatility can impact margins and working capital. Hedging strategies and natural offsets (e.g., USD inflows vs. outflows) must be actively managed.

• Mitigation: SSL has always backed the USD borrowings with USD inflows, however the operational expenditure in INR stands exposed to FX risk.

CAUTIONARY STATEMENT

Statements in this Report may be forward-looking. Actual results may differ due to global/Indian

market conditions, regulatory changes, geopolitical events, and economic factors.

ANNEXURE-H

FAMILIARIZATION PROGRAMME DETAILS FOR INDEPENDENT DIRECTORS:

	SR. NO.	NAME OF INDEPENDENT DIRECTORS		PARTICULARS
				Safety Health and Environme nt initiatives
					Industry/ Regulatory Trends	Competition and Future Outlook	Governanc e & Operations	Total
	1.	Mr. Ashok Kumar Bal		1	1	2	1	5
	2.	Mr. Rajesh Kakkar		1	1	1	1	4
	3.	Mr. Bharat Bhuhan Nagpal		1	2	1	1	5

ANNEXURE-I

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (LODR)Regulations, 2015)

To,

M/s. Sadhav Shipping Limited Registered Office Address:

521, 5^th Floor, Loha Bhavan,

P. D Mello Road, Masjid (East),

Mumbai - 400009.

We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of M/s. Sadhav Shipping Limited having CIN Number: L35100MH1996PLC101909 having its registered Office at 521, 5^th Floor, Loha Bhavan, P. D Mello Road, Masjid (East), Mumbai - 400009 and corporate office at Unit-618, 6^th Floor, Laxmi Plaza, Building No. 9, New Industrial Estate, New Link Road, Andheri West, Mumbai - 400053, (hereinafter referred as Company) produced before us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para - C Sub-clause 10(i) of the SEBI (LODR) Regulations, 2015.

In our opinion and to the best of our information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in as considered necessary and explanations furnished to us by the Company & its officers.

We here by certify that none of the Directors on the Board of the Company as stated below for the financial year ending on 31^st March, 2025 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

ANNEXURE-I

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

Sr No	NAME OF DIRECTORS	DIN		DESIGNATION	DATE OF APPOINTMENT
01	Mr. Kamal Kant Choudhury	00249338		Chairman & Managing Director	25/09/2023
02	Mrs. Sadhana Choudhury	00249442		Whole Time Director	25/09/2023
03	Mr. Vedant Choudhury	07694884		Whole Time Director & CEO	25/09/2023
04	Mr. Subhas Chandra Choudhury	01174235		Non - Executive Director	11/10/2023
05	Mr. Ashok Kumar Bal	06664134		Independent Director	23/09/2023
06	Mr. Rajesh Kakkar	08029135		Independent Director	11/10/2023
07	Mr. Bharat Bhushan Nagpal	07564818		Independent Director	16/10/2023

Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company.

Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Steering with Responsibility & Transparency

At the helm, direction and control come together with responsibility. This section underscores our commitment to governance, compliance, and ethical stewardship, ensuring that we remain steady and accountable. Through transparent statutory disclosures and detailed financial statements, we provide stakeholders with a clear view of our performance, financial strength, and long-term resilience steering with trust as we sail towards tomorrow.