1. At a Glance
Q1FY26 was a low tide for Dredging Corp. Revenue rose60.6% YoYto ₹242 Cr, but profits sank into a ₹23.3 Cr loss. The company, which commands over 80% of India’s port maintenance dredging, still can’t keep its bottom line above water consistently. And now it’s planning to raise ₹194 Cr via NCDs — because nothing says “buoyancy” like more debt on a negative ROE.
2. Introduction
Imagine being the monopoly player in your industry, yet struggling to make money. That’s Dredging Corp. The company clears silt from ports, helps the Indian Navy, and keeps shipping channels navigable. It’s basically the janitor of India’s waterways — except it sometimes gets paid late, and the cleaning equipment is older than the ports themselves.
3. Business Model (WTF Do They Even Do?)
- Maintenance Dredging– Major ports, naval bases, and inland waterways.
- Capital Dredging– Deepening new ports and harbours.
- Reclamation & Beach Nourishment– Restoring land and shorelines.
- Special Projects– Navy operations and channel deepening for large vessels.
Revenue depends heavily on government contracts, project timing, and mobilization of dredgers (often hampered by aging fleet issues).
4. Financials Overview
Q1 FY26 (₹ Cr)
| Metric | Latest Qtr (Jun’25) | YoY Qtr (Jun’24) | Prev Qtr (Mar’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 242.2 | 151.0 | 462.0 | +60.6% | -47.6% |
| EBITDA | 47.0 | 12.0 | 77.0 | +291% | -39.0% |
| PAT | -23.3 | -31.0 | 21.0 | Loss ↓ | — |
| EPS (₹) | -8.33 | -11.21 | 7.64 | Loss ↓ | — |
Commentary: Great revenue jump YoY, but profitability still unstable. This is the financial equivalent of building
sandcastles during high tide — looks good briefly, then vanishes.
5. Valuation (Fair Value RANGE only)
Method 1 – P/B
- BV: ₹436; applying PSU infra service multiple 0.8x–1.2x → FV ₹350 – ₹525.
Method 2 – EV/EBITDA (TTM)
- EBITDA (TTM): ₹174 Cr, EV ≈ ₹1,828 Cr → EV/EBITDA ~10.5x; fair range 6x–9x → FV ₹250 – ₹375.
Method 3 – DCF (project-based)
- Lumpy cash flows make DCF messy; assuming average FCF ₹100 Cr/yr → FV ~₹300–₹400.
Educational FV Range (not advice): ₹250 – ₹500.
6. What’s Cooking – News, Triggers, Drama
- Q1FY26 lossdespite higher sales — fleet costs and interest biting.
- ₹194 Cr NCD issue approvedto fund operations/asset needs.
- Tax auditor & secretarial auditor appointments— corporate housekeeping in order.
- Strong order visibility from ports & Navy, but execution timing is everything.
