Knowledge Marine & Engineering Works' subsidiary, KSPL, has won a ₹66.11 crore order from IWAI for 10 hybrid electric ferries. This marks a significant entry into green vessel manufacturing and provides revenue visibility.

Knowledge Marine & Engineering Works Secures ₹66.11 Crore Order for 10 Hybrid Ferries

₹66.11 crore order value; ₹0.59 crore for maintenance and support.

Reader Takeaway: Boosts revenue visibility and entry into green shipping; low capacity utilization allows for other projects.

What just happened

Knowledge Marine & Engineering Works Ltd (KMEL), through its subsidiary Knowledge Shipyard Private Limited (KSPL), has secured a significant order worth ₹66.11 crore from the Inland Waterways Authority of India (IWAI).

The order is for the design, construction, supply, testing, and commissioning of 10 hybrid electric passenger ferries, each designed to carry 20 passengers.

Why this matters

This contract marks a strategic entry for the KMEW Group into the green vessel manufacturing segment, aligning with the government's 'Harit Nauka - Inland Vessels Green Transition Guidelines'.

It provides revenue visibility for several years, particularly due to the 60-month maintenance and support contract included in the deal.

The backstory

This is KSPL's first external commercial government project, making it a landmark order for the company.

The project's execution period for construction is 10 months, followed by the 60-month maintenance period.

What changes now

The company will commence the design and construction of these hybrid ferries, bolstering its order book.

Management indicated that this project will utilize less than 5% of the shipyard's total capacity, leaving ample room for other ventures.

Risks to watch

Investors should monitor the execution capabilities of KSPL during the 10-month construction phase, given this is their first government project.

Peer comparison

While specific peer order values are not detailed in the filing, the trend towards green and hybrid vessels is a sector-wide development. Companies focusing on shipbuilding and marine infrastructure will be key comparables.

Context metrics (time-bound)

The construction phase is slated for 10 months, with a subsequent 60-month maintenance period.

What to track next

Investors should track the progress of the construction and commissioning of the ferries and look for any further orders in the hybrid and electric vessel segment.