Shipping Corporation of India shares plunge 7% as Q3 net profit, revenue fall

With today's fall, Shipping Corporation of India shares have tanked 13 percent since the start of the year.

Shares of Shipping Corporation of India (SCI) plunged as much as 7.3 percent to Rs 177 in morning trade on February 10 after the public sector company's third-quarter earnings left investors disappointed. The development gains significance as SCI is the largest shipping company in India Under the Ministry of Ports, Shipping and Waterways.

During the quarter, the company that operates ships for national and international trade reported a massive 44 percent decline in net profit to Rs 75.5 crore compared to the previous year's Rs 134.4 crore. Its revenue from operations also came in lower by 2 percent at Rs 1,315.6 crore against the previous year's Rs 1,340.7 crore.

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EBITDA 0r earnings before interest, tax, depreciation and amortization slipped 14.3 percent to Rs 357.3 crore in the third quarter of this fiscal over Rs 416.9 crore in the corresponding quarter in the previous fiscal. EBITDA margin stood at 27.2 percent in the reporting quarter as compared to 31.1 percent in the corresponding period in the previous fiscal.

In a positive for shipbuilding companies, the Union Budget 2025 announced a slew of measures to boost the prospects of the companies. Finance Minister Nirmala Sitharaman announced that the Shipbuilding Financial Assistance Policy will be restarted in the Union Budget 2025. Further, the FM proposed the exemption of basic customs duty on the shipbuilding and shipbreaking companies, for the period of ten years.

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The FM also announced that a maritime development fund with a corpus of Rs 25,000 crore would be set up. The Central government will give the shipbuilding industry a thrust, as shipbuilding clusters will be facilitated.

Currently, India has a mere 0.05 percent of the global market share in shipbuilding. This is significantly lower than China (~47 percent), South Korea (~30 percent), and Japan (~17 percent), which currently dominate the industry.

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At about 10:45 am, shares of the company were trading at Rs 181.6, lower by 5.2 percent from the last close on the NSE. With today's fall, Shipping Corporation of India shares have tanked 13 percent since the start of the year.

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