Domestic shipping companies are expected to continue to see a declining trend in revenue growth with an on-year dip of 8-10 per cent in fiscal 2026, stated a report by CRISIL Ratings. This, it added, will be on account of softening of charter rates — for crude oil and petroleum products amid stagnant demand, and moderation in those for dry bulk carriers following fleet additions.
Revenue and margins which came down last fiscal, per the report by CRISIL, continue to slide in the current fiscal after a growth of 35 per cent in fiscal 2023, when charter rates had surged as a result of disruption in global sea borne trade caused by the Russia-Ukraine confrontation and pent-up demand after the pandemic. However, it added that a sharper decline in revenue is unlikely since the overall tonne-mileage remains healthy owing to long-haul travel routes adopted by ships amid the ongoing geopolitical conflicts.
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Further, lower revenue will mean that operating margin will also fall to 32-34 per cent next fiscal from over 40 per cent last fiscal. It will still be higher than the cyclical average of 25-30 per cent for the industry and vary by companies, depending on fleet and contract mix.
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The credit profiles of shipping companies would however remain stable given modest capital expenditure (capex) plans, CRISIL said.
CRISIL studies five shipping companies, which account for about half of the 20 million metric tonne deadweight tonnage (DWT) of shipping fleet in India, to report the findings.
Fleets of domestic shipping companies are dominated by tankers that carry crude oil and clean petroleum products (around 70 per cent to total DWT), followed by dry bulk carriers hauling unpackaged commodities such as coal, iron ore and grains (~20 per cent). The balance is distributed among container ships, gas carriers and others.
Charter rates correlate with global demand-supply dynamics.
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