Padmesh Prabhune –
The Indian ship recycling industry will see revenue growth of 15 per cent this fiscal after two years of successive decline; 22 per cent in fiscal 2024 and 8.5 per cent in fiscal 2023, according to Crisil rating.
The rating agency said the growth will be supported by the increased availability of ageing vessels for recycling due to addition of new vessel capacity globally and higher competitiveness of Indian ship recyclers as compared to key rival nations — Bangladesh and Pakistan.
The increased availability of ageing vessels will also help reduce input cost of ship recyclers. In addition, higher capacity utilisation will result in better efficiency, and will improve operating profitability by 6.5 per cent in 2024-25.
According to the rating agency, the increased availability of ageing vessels will bring down input cost for ship recyclers. “This, along with higher capacity utilization leading to better efficiency, will improve operating profitability by 75 basis points (bps) to 6.5 per cent this fiscal,” it said.
Indian ship recyclers are expected to grab a lion’s share of the increased volume of condemned vessels, given their higher competitiveness leading to likely volume growth of around 20-23 per cent, it said. Marex Media