Analysts` corner

RESEARCH CALLS

Garware Offshore Services Ltd's (GOSL) Q4FY08 results were modest with revenue growth of 20.8 per cent to Rs 23.3 crore and 7.36 per cent increase in net profit to Rs 5.7 crore, as compared to Q4FY07.

Operating profit in Q4FY08 grew by 23 per cent to Rs 14.23 crore as compared to Rs 11.5 crore in Q4FY07, primarily driven by higher day rates. Interest cost increased by 27 per cent to Rs 4.28 crore, because of new vessels acquired, which were funded through a debt:equity mix of 70:30.

GOSL is expected to display robust growth in earnings in FY09 for two reasons. Firstly, two of the company's Anchor Handling tug supply vessels are expected to get 20-30 per cent higher charter rate compared to FY08 as the contract with ONGC and Cairn Energy are getting over in 1QFY09.

Secondly, GOSL would be taking delivery of its newly ordered PSV and AHTSV in 1QFY09. This will get reflected in the earnings of 2Q FY09. Increasing demand for offshore vessels coupled with scarcity of vessels will help GOSL achieve a growth of 31 per cent in top line along with a 28 per cent growth in bottom line in FY09. The stock has been rated a