Dredging Corporation surges 14%, hits over 4-year high on solid Q1 results

The company said that they are aiming at a record highest turnover of Rs 1,200 crore for FY24

Shares of Dredging Corporation of India (DCIL) jumped 14 per cent to hit over four-year high of Rs 487 on the BSE in Tuesday’s intra-day trade, on the back of heavy volumes. The stock quoted its highest level since September 2018.

In the past seven days, the stock price of DCIL has appreciated 33 per cent after the company posted a net profit of Rs 15.15 crore for the April-June quarter (Q1FY24) on account of reduced expenses, as against a net loss of Rs 15.71 crore in Q1FY23.

The company's earnings before interest, taxes, depreciation and amortisation (Ebitda), too, increased more than two-fold to Rs 55.86 crore during the quarter under review versus Rs 25.10 crore, in the year-ago period. Total income, however, declined to Rs 205.18 crore in Q1FY24.

The management said that the quarter witnessed successful completion of several significant dredging projects, which contributed to the company’s India revenue surge.

"We are committed to maintain this upward trend and continue to show improvement in the performance, aiming at a record highest turnover of Rs 1,200 crore for the current financial year 2023-24. We will continue to focus on advancing technological capabilities and expanding its project portfolio," the management added.

DCIL has over four decades of presence in the dredging sector and provides dredging services in shipping channels of major, non-major ports, naval establishments, fishing harbors, power plants, state governments, private organisation, shipyards and other maritime organizations.

The company has been providing capital dredging  new harbors, deepening of existing harbors or maintenance of dredging for the upkeep of the required draft at various ports along the 7,500 kilometers coastline of India.

As part of strategic divestment initiative taken by Government of India (GoI), on March 08, 2019, GoI had executed Share Purchase Agreement (SPA) with consortium of four ports (namely Vishakhap atnam Port Trust (VPT), Paradip Port Trust (PPT), Jawaharlal Nehru Port Trust (JNPT) and Deendayal Port Trust (DPT)) pursuant to which 73.47 per cent of the equity stake of DCIL held by GoI have been transferred along with transfer control to the consortium of four ports resulting in change in promoters.

As on June 30, 2023, Visakhapatnam Port Trust holds 19.47 per cent with other three ports holding 18 per cent each in DCIL. All the four ports are under the direct administrative control of the Ministry of Shipping (MoS). With change in promoters, DCIL expects to derive benefit by virtue of receipt of orders on nomination basis, said analysts.