Thank you very much. We will now begin with the question- and-answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Your first question comes from the line of Amit Dixit with Goldman Sachs. Please go ahead.

Hi. Good evening, everyone, and thanks for the opportunity. Congratulations for a good set of numbers again. Two questions. The first one is on Next-Generation Corvettes. Now, the order has been on anvil for quite some time. Just wanted to understand where is it stuck. Are there certain concerns around the orders that have been raised by the rel evant authorities? I just wanted to get a brief construct of this, because this order has been struck for quite some time. Part B of the question is assuming the order is given to us, let us say, today, then how much time will it take for us to actually start recording revenue?

Thank you. Thank you for your compliments on the results. Yes, I would like to state that this is the 17th quarter on a trot that our financial s have been on an upward trend and hopefully we will be able to maintain this tempo in the coming quarters too. Coming to the much-awaited Next-Generation Corvette project, yes, the project contract has got delayed a bit. We were expecting the contract to be signed either during the end of the last financial year or during the first quarter, but we are confident that the contract will be signed this quarter. We do not see any red flags with respect to the contract conclusion. That is our appreciation. To answer your question as to when the revenue recognition would commence, now this project has got, as per the RFP conditions and naturally the contractual conditions, this has got a pre- production period where the design studies would take place. And the material ordering, the equipment ordering will take place. The first revenue recognition will commence next year, that is the Financial Year 2028. Revenue recognition will commence in Financial Year 2 028 when we will be utilizing the activities involved in design, then the binding data information which we need to progress with the preparation of compartment design and equipment layout. So, this revenue recognition will start from the next financial year, assuming the contract is signed during this quarter. Now, in shipbuilding, we have a very peculiar kind of revenue recognition pattern where the initial phase, that is, for example, if a project is a five -year project, the first year the revenue recognition will come through design related inputs which will contribute maybe to five to ten percentage of the project cost. Then the physical construction, that comes the second phase, which should be between, let us say, the first year to the two and a half, that is 50 % of the project duration, where the revenue recognition will move up to about 20 to 25 percent. And then comes the very steep upward revenue recognition curve, where the equipment and systems which have been brought are lowered onto the ship and the integrations happen. That is the phase where the maximum revenue recognition happens. And then, of course, the outfitting and the project completion. This is the broad revenue recognition pattern. To answer your specific question, yes, the revenue recognition will come in from the next financial year.

Thank you. And how much time will it take for this order to be completed, NGC order?

NGC is an eight-ship project where two shipyards will build the ships concurrently, and the first ship delivery is after five years. And the project completion is eight years. Eight years is the project completion time which is given. That means if the order is placed now, the eighth ship of the project, which both shipyards put together, would get completed by 2034 -35. That's what I think.

Very clear, sir. The second question is essentially on the latest AON trend that we have seen, particularly for Navy. There is a lot of emphasis on the unmanned vessels and autonomous platforms. So, just wanted to understand our preparedness for that. Does our expansion plan also is focused on building certain capabilities on that front or we already have those capabilities, and we will be bidding for such RFPs as and when they come?

Yes, very interesting question. To answer your second part first, whether we have the capability, yes, we have the capability. And it is with good intent because we were clear that the Navy having a very clear autonomous roadmap. So, we were clear almost three, four years before that the Navy would go for it, and of course, followed by Coast Guard, both would go in for an autonomous environment where a large number of unmanned vessels would come in. So, we started with the prototype development of an unmanned surface vessel successfully approved. And just for information that we have also executed a project for the NSDL, Naval Scientific and Technological Laboratory, Vishakhapatnam, a DRD O organization for an unmanned surface vessel. In addition, an autonomous un derwater platform, which was developed by us. Again, the prototype successfully proved in the Tengangsu Lake about a year back. So, we are technologically competent and technically ready for execution of this project. So, we have been actively participating in the NAIC projects of the government steered by the Navy. For example, for the ASV, that is the ASV NCM, there is a project which the Navy, an autonomous project which Navy is steering. We are one of the other companies taking part in that. We are agai n being shortlisted for another project of the Navy, which is again for an underwater unmanned platform. So, we are very much competent and interested and also actively taking part in these schemes and the projects which Navy has come up for autonomous unmanned platforms.

Great. Thank you. Thank you so much and all the best.

Thank you.

Thank you. N ext question comes from the line of Dipen Vakil from Phillips Capital. Please go ahead.

Thank you for this opportunity and congratulations on a great execution. My first question is on the line of your CAPEX announcement that you did. Can you help us with the quantum of CAPEX that you are envisaging for Greenfield as well as Brownfield side of it? And what kind of capabilities will it add to your current existing ecosystem in terms of whether the dry dock size will be the bigger one, especially in Gujarat? And how will it help you address

the bigger and more bigger and sizable opp ortunities either in defense or commercial side of it? That's my first question.

Thank you. We have a very clear expansion plan and in turn a clear CAPEX infusion plan. Now, if I divide this into two buckets, one is the minor projects that we are undertaking again with a very, very clear, let us say, capability enhancement pattern. For example, two facilities that we have taken over from the Kolkata Port Trust that Syama Prasad Mookerjee Port where the capital infusion is limited, where we already commenced the revitalization. And there the capital infusion is expected to be just about ₹200 crore and this will be completed within a year and half (18 months). Coming to the larger projects, we ar e just undertaking two projects, one in West Bengal, I mentioned it, towards the sea. The land is already with us again on a very long -term basis, a long-term lease from Kolkata Port Trust. Here we are creating a full -fledged shipyard. We expect the capital infusion to the tune ₹2,200 crore of which DPR is in its final stages. So, this is an approximate figure. The setting up of the facility would take three to five years because it is a completely greenfield setup. Coming to the West, what we are intending, here the DPR is complete. The environmental clearance has already been obtained, which means this project is moving at a much faster pace. The capital infusion would be to the tune of again around ₹2,000 crore. This will be a total ship solution facility , as I mentioned during my opening remarks, comprised of shipbuilding, green ship recycling, and ship repair capability under a single roof. Now coming to the specific question which you asked as to what does it add to our current capability. One, our curr ent capability, as I mentioned, is to undertake shipbuilding, concurrent construction of 28 platforms. When I say 28 platforms, that includes platforms up to about 10,000- ton displacement and 200 meters length. This would cater for most of the defense platform, but when we come to commercial ships, they're much, much larger in size. So, there we have difficulty at this moment, and that is the intent of creating these facilitie s. One, to circumvent the riverine constraints, and second, to obviate the length and displacement restrictions. So, we intend, with the creation of these two facilities, the capacity constraint will be completely obliterated, and we will have the capability to build 43 platforms, and the 11 platforms, 11 types of platforms, that means from 32 to 43 platforms, there will be large vessels of Aframax and VLGC type. So, this is the benefit of this particular expansion project that will accrue to the shipyard. Second is here in Kolkata, where our core shipbuilding facilities exist, we will be focusing, utilizing them, focused towards defense shipbuilding, and the facility in Gujarat, while we will use spare capacity there for warship building, the primary focus will be for green ship recycling and building of large size ships. I hope I answ ered your question. Thank You.

Absolutely, sir. Second question is, you mentioned about the tenders which are already out on the commercial side, namely MR Tank , VLGC, Aframax , and even the container ship tender which is expected soon. So, sir, how does our technological capability stand for these large size

carriers, and at the same time, how do we participate in this tender with the current capacity? Are we looking to partner with some company or take some tech from a foreign company? How are we participating in such commercial vessels?

Okay, to start with, during the initial discussions, I had mentioned that we have already won an order for a set of four Platform Support Vessels, and what I given to understand that before order to be awarded, first, the letter of intent to be awarded among the lot that has been aggregated by the MOPSW from all the PSUs. So, we are happy about that. Now coming to the next few projects, that is the MR Tank, the VLGC, and of course, the container ship. MR Tanker, we are collaborating with one of our sister shipyards, and so are we doing so for the VLGC. In the VLGC tender itself, there is a condition that of the number of vessels they have promulgated, I think it's eight ships they have promulg ated, but two of them have been built at a shipyard which has already got proven capacity in building of VLGCs. So, we, along with our partnership here in India, we already tied up with one of the foreign shipyards with proven capability, and we will be bidding to the two Indian shipyards will be bidding to the vessels. Coming to the container ships, yes, currently we do not have the physical capacity because the size of the ships are large, but we are going in for a partnership with one of the other Indian shipyards who have got the dock and berth infrastructures to handle this project. So, we have a very clear strategy for addressing the limitations that we currently have so that we don't miss out on any of the high value orders which are coming from this non-defense segment. Thank You.

That is very encouraging to hear, sir. Thank you so much. Sir, if I can squeeze in one last question. Sir, can you help us to understand the execution momentum in FY27? Will we maintain the similar execution momentum, or do you expect some softness in growth numbers from, say, for 38%, 35% to 40% might get slightly slower in FY27?

See, currently we are in an execution phase. Actually, if you see last year, we have delivered eight ships, so naturally when the ships are delivered, the revenue and in turn the profits would increase. We are still in that phase, but we all must be clear that the current order book is 13,596 crores, and of this, the two projects which are major, which means the P-17 Alpha and the anti-submarine shallow water craft. For example, the P -17 Alpha, we are left with about 4,500 crores and the anti-submarine shallow water craft of about 1,816 crores. These are the major projects which are on the anvil of completion. So, the current quarter’s performance will be able to replicate in the coming quarters too.

Thank you.

Thank you. The next question comes from the line of Kavish Pare with 361 Capital. Please go ahead.

Hi, sir. Thanks for the opportunity. My question is on GRSE's indigenization levels. Sir, could you elaborate on the current level of indigenization across our portfolio and also identify the key systems, subsystems, or components where we continue to remain dependent on imports?

Okay, thank you. A very i nteresting question, and this has been the focus of our government also, indigenization. See, one thing we all must clearly understand that we are platform integrators. Naturally, GRSE being shipbuilders and engineers. The other part, the engineer’s part, I will answer separately to come into the shipbuilding part. We are platform integrators. When we are platform integrators, most of the equipment and weapons or, let us say, the propulsion engine, they are all nominated by the customers, be it defense shipbuilding or be it commercial shipbuilding. Then the nomination comes from the customers. For example, if a commercial ship customer wants an engine of, let us say, German made, we have to procure the German engine, which is a contractual obligation. Therefore, expecting indigenization there would be an infrastructure exercise. However, with respect to war shipbuilding, I will segregate this into four components, float, fight, move, survive. If you are taking the float component, float component mostly comprises of the ship's hull, where the stability aspects are involved. India has achieved, and so has GRSE, 100% indigenization. But the float component comprises only about 10% of ship cost. Then comes the fight component. Fight components comprise of the weapons and systems. Here, I am happy to inform you that from a very, very modest indigenization percentage, we have gone up to almost 60% indigenization today. But many of the Indian defense manufacturers are producing weapons and systems, including my sister company that is well for the sensors. Now, coming to the float component, this is where currently there's a catch because float comprises, sorry, move, move comprises of the propulsion engines and the power generation and associated equipment. Here, while power generation, that is the diesel alternators, they are 100% indigenous, in case of propulsion engines, we have still not achieved indigenization, where the government has already initiated both for the marine gas turbines, as well as for marine diesel engines, but this will take a finite amount of time. Coming to survival, survival is the firefighting equipment, the safety equipment, and so on. We are about 70% indigenous. So, net-net, if you take a 100% cost of a ship, we are talking by value. In the last few projects, two projects I will just take, which we have completed, the anti- submersible aircraft, then four ships already been delivered, we know exactly what is the kind of indigenization that they can achieve.

And the survey vessels l arge, which we have already completed the project. There, we have plus 80% indigenization overall. This is for the ship building sector. Coming to the other sector, let us take Bailey Bridge, which is one of my business verticals, where it is 100% indigeno us. Every component is fabricated, including subcomponents are fabricated from Indian sources, sourced from India and fabricated here. So, 100% indigenization. Coming to the other products, let us say marine diesel engines, we have a collaboration with another foreign OEM, so co -production of marine diesel engines. When the project fructifies, the indigenization level would be about 55% to 60%. If you are talking about deck machinery, another business vertical of GRSE, we have about 90% indigenous. So, this is where we stand as of today, but then again, I go back to my first statement with respect to indigenization, that while all of us, the entire ecosystem is striving towards indigenization, it has got its limitations and the time implication, because indi genization does not come like a switch getting on, it takes time. So, currently, we are, let us say about 80-85%, maybe it will take about 5-10 years of achieving 100% indigenization. Thank you.

Very decent, sir. Thanks a lot for that. Sir, as a follow-up on the defense side, which domestic suppliers, in your view, are best positioned to substitute these imported components as procurement within the company becomes increasingly indigenous? Which private sector companies do you think could emerg e as meaningful beneficiaries? And lastly, also within the defense electronics part, apart from Bharat Electronics, which suppliers currently have a meaningful wallet share with us?

Very interesting question. Now, almost all the major private companies are into defense manufacturing, be it L&T, be it Adani, be it Mahindra, be it these guys, Kalyani, all of them are in defense manufacturing and each one of them has contributed extensiv ely towards indigenization. So, I think that gives you a broad answer about which are the major private companies. I may have missed out somebody, but I have just hinted that this is the big companies. Now, there are a host of startups, host of startups. Today, in India, about 17,000 MSMEs, about 1,000 startups, and about 675 innovators are involved in defense manufacturing. And most of them are focusing on new technology based, and I am talking about the innovators and startups, most of them are focusing on new technology based indigenous production. Here, the limitation is there is still a percentage which comes from abroad. So, to encourage the startups and innovators, we ourselves, GR SE company has taken an initiative and started an open challenge team for startups.

We kept an acronym called GRS E Accelerator Innovation Engineering Team. Believe me, the response has been overwhelming. About 101 startups took part last year. So, the entire ecosystem is striving towards indigenization. Let us see how it moves or how fast it moves. In addition to BEL, of course, HAL is a major contributor towards indigenization. We also have some links with HAL because the marine gas turbines that come fro m them, of course, it is rooted from abroad, but a certain amount of indigenization takes place there. ECIL is a part of indigenization, and there are other PSUs like Kelton, who also are contributing towards supplying indigenous products to shipbuilding. Thank you.

Thanks a lot for that, sir. Very, very detail explanation. Hope to see the long- anticipated contract getting signed soon. All the very best.

Thank you. We will move on to our next question. Your next question comes from the line of Harshad Kapadia with Elara Capital. Please go ahead.

Thanks for the opportunity and congratulations again for a good set of numbers, sir. Would you be able to share the order book breakup for GRSE, sir? Sure.

Thank you, Mr. Harsh ad. The current total order book is ₹ 13,596.26 crore. Within that, the shipbuilding contributes nearly 95 percent, that is ₹12,980 crore. With the other verticals, that is ship repair, about ₹96 crore, the naval vessel gun ₹219 crore the bailey bridge is ₹158 crore, the deck machinery is ₹ 58 crore, and our diesel engine plant ₹ 82 crore. Now, I will just give you a breakup of the shipbuilding order book. P 17 Alpha , the last ship was ₹4,519 crore. The Anti-Submarine Swallow Water Craft, about ₹1,815 crore. Survey Vessel Large, we are left with about ₹. 225 crore. The NGOPV project, about ₹3,075 crore. The Ocean Research Vessel, ₹740 crore. The Acoustic Research ship, ₹450 crore. The Coastal Research Vessel, ₹258 crore. The ferry, ₹ 203 crore. Multi Purpose Vessels and the Dredger put together about ₹1,355 crore. So, about 74% of the shipbuilding pie is from the four naval projects and the balance, 25% is coming from the non-defence sector. There was a period when 98% of the shipbuilding order book was comprised of defence orders, but now the split, the breakup has been different, mostly because we have been executing the research ship projects for various ministries, and of course the export orders. So, this in a nutshell is the breakup of our current order book.

Thank you. Thank you, sir. Just one more question, sir, on the P&L. Probably if you have answered this question, I am again sorry for reiterating. On the other expense side, the expenses have reduced significantly. Was there any one-off here, or what would you attribute here?

One second, could you repeat the question again?

So, sir, other operating costs have come down significantly in this quarter in Q1 FY27 results. So, what would be the reasons for that, sir?

Other expenditures coming down?

Yes, sir.

In the last quarter, we had three of the ships which were commissioned. So, the last phase of commissioning, a certain amount of expenditure was incurred for these activities. So, in the current quarter, we did not have such occasions. So, that has resulted in a drop in the other expenses. Thank you.

Okay, sir. I will come back in the question queue, sir. Thank you.

Thank you. Your next question comes from the line of Kashyap Ramesh, an individual investor.

Hello, sir. Congratulations on a great quarter. My question is on exports. After the German order, there is nothing significant coming, a bid pipeline or anywhere, you are not mentioning anything about exports. So, is the GRSE bid for export to Navratna, do you have the freedom or again, it should come from like an inter-government thing?

Okay, thank you for the question. Firstly, for exports of non-defense platforms, we do not need any government approval if the item is getting, if the product is getting supplied to a friendly foreign nation. Now, defense exports mostly are through G2G typ es and so, we rely on our government for defense exports. Coming to the non-defense exports, you had mentioned that we have not gone in for any export orders after the multipurpose contract. It is a very conscious act. When we went in for multipurpose vessel, obtaining the multipurpose vessel export order, at that point of time, our government had not aggregated the demand of the Indian non- defense requirements. So, now that demand has been aggregated and the opportunities are fantastic. About 200 plus platforms are required. So, when we have, yes, export is interesting and we want to export more, we will export more, but right now, we are not taking any export order considering that there are huge opportunities available within India. Having said that, if a n attractive, profitable and visible order opportunity comes from Europe or any of the other customers, we will take it up. So, this is the strategy which we have taken. Again, to reassure you that there are enough opportunities available within India and India looks to India for giving the product.

Now, coming to the Navratna status, Navratna status definitely provides the autonomy for expansion, and we intend utilizing this privilege or the expansion autonomy to the hilt. Thank you.

One more question is about the water metro projects of Mumbai and other cities. Is GRSE actively bidding? Because I saw some of your officials meeting Mumbai metro water project people. So, you didn't mention anything about that.

We are currently executing one project for the government of West Bengal. It is a World Bank funded project for 13 hybrid ferries. Actually, you are absolutely right. We are pitching in with the various state governments for their respective water metros. And you will understand that even Goa, they are coming up with a water metro development. I think they have engaged KMRL, the Kerala water metro as a nodal agency for coordination. Yes, we are engaging with these various state governments. And as and when the RFPs come out, we will definitely take part because this is an area where we have already established ourselves. Because our ferry that we have provided to the government of West Bengal is the largest and the fastest fully electric ferry in the country. And we intend leveraging and capitalizing on this edge that we have. And we will take part in the RFPs which are coming out. I expect some of them to come out in the coming one year. We will take part.

Thank you. Our next question comes from t he line of Yash, an individual investor. Please go ahead.

Hi, sir. Good evening. Congratulations on the good set of numbers. And most of the questions I had planned to ask were asked by the other participants. So, I'd just like to reiterate the question which I asked in the prior call. Are you going for any bonus or a stock split? Yes. So, because other shipyards have done that, right? So, that was the only question.

Sorry. Could you repeat the last part, the question part once again?

So, I am talking about any corporate actions that are in the queue, sir, like a stock split or something like that.

I understood. I understood. We are fully aware that this is controlled by the government department. We are waiting for t heir instructions on this. And whatever instructions come from the Administrative Ministry and DIPAM, we will abide by that. Let us wait for their directives. Thank you.

Thank you.

The next question comes from the line of Alok, an individual investor. Please go ahead. Alok, sir, your line is unmuted. Please proceed with your question. As there is no response from the line of current participants, we will move on to our next question. Our next question comes from Harshad Kapadia with the Elara Capital. Please go ahead.

Thanks for the opportunity. Sir, your employee cost has also come down despite such a strong increase in revenue. Is that because you are nearing ending the completion time? So, mainly the contractual workers are reduced? Is it because of that?

Yes, you are absolutely right that the contract expense is have come down. The deployment of contract workers varies from the project execution phase. In the final stages of out fitting, if you see the contract expenditure during Q4, FY26, it would have been high. Because that is when we delivered in that last quarter, we delivered three ships. So, maximum deployment of personnel would have been there and so that the contract value would have been high. In this, it's a sinusoidal thing. You will definitely see some increase in that in the coming quarter because that is when we expect to deliver a couple of ships. So, as you rightly said, it is purely on the project execution phase. No abnormality in that . It's very normal in the shipbuilding cycle.

Understood. And just in relation to that, next year is going to be the pay commission which will happen. So, how much increase in employee cost can we expect? Will it be in the range of 15- 20% which we see earlier, or will it be lower? Sir, any number or any color on this would be helpful.

Okay, I understand the question. But our anticipation is that it could be of similar range 15-20% which is normal in every pay commission. We don't see any abnormality, and we have already factored those in our, let us say, future projections and calculations.

Okay. Okay. Fair enough, sir. Okay. Thank you, sir.

Thank you. The next question comes from Pratap Maliwal with Mount Intrafinance. Please go ahead.

Yes. Hi. Thanks for taking my question. I just wanted two clarifications. So, I believe you've mentioned water metro project that you may be executing. Could you give us some idea of what could be the tentative order size of these kinds of projects? And secondly, just regarding the next -gen destroyer program, I think that we have sp oken of in the past. Is there any incremental update that we could get maybe on the timeline or the order value?

Thank you. The water metro project, as an earlier speaker, an analyst or an investor mentioned, many of the states are now looking at setting up a water metro. Kochi has already a facility and here we are doing one for the government of West Bengal. So, these are not very high-value projects. The order value could be to the tune of around ₹200 to 300 crore per metro. They are small platforms, but that but is the attractiveness or the overall necessity of a green platform. But here, again, the volumes are high. If for five states, let us say, going for this, the order value could be to the tune of around ₹1,500 crore. And in terms of numbers, it could range from 30 to 40 platforms. So, this in a nutshell, I think, would give you a hint as to what are the numbers and the order value involved. Coming to the major project of the Navy, I think you asked about the next - generation destroyer. Is that what you asked? Yes, sir. Okay. This is one of the projects which, as we are given to understand, this is in their prospective plan. This is a high -value project where, as per my understanding, this has not yet gone for a DAC approval, which means that after a DAC approval is taken, it will still take about a year -and-a- half to two for the RFP to be issued. So, I do not expect, in my appreciation again, that I do not expect the RFP to come out for NGD till FY29, because currently we are in FY27. Considering, depending upon the priority that Navy has got, even if a DAC approval is taken in the current financial year, it could take about a year-and-a-half for the RFP to come out. Now, keeping the NGD apart, as I mentioned during my introductory remarks, there are enough opportunities, as I stated, about 80,000 crores worth RFPs are currently out of life, and about 60,000 more is likely to come out during the current year. So, that itself, the volume is around 1,40,000, and the stakeholders, the contender s for these 1,40,000 to 150,000 crores are just about five to six shipyards. So, this is where we stand today. The opportunities are adequate. This is excluding the NGC contract that we expect soon, and also excluding the commercial shipbuilding opportunities that are available in the domestic market. Thank you.

Thank you. Thank you for a detailed answer. Those were my questions. Thanks.

Thank you, and thank you, Chintan from Concept, and thank you all the investors and analysts for participating in this conference and showing interes t in our Company as always, and I definitely look forward to future interactions waiting for the next quarter. Thank you. Thank you.

On behalf of Garden Reach Shipbuilders and Engineers Limited, that concludes this conference. Thank you, everyone, for joining us, and you may now disconnect your lines.