1. At a Glance – Small Ship, Big Valuation Waves
Garware Marine Industries Ltd (GMIL) is a ₹15.5 Cr market-cap microcap trading at ₹26.9, down 22% in 3 months and 20% in 1 year, yet proudly wearing a 48× P/E like it’s a luxury watch.
Latest Q2 FY26 (Sep 2025) numbers show ₹0.26 Cr revenue, ₹0.09 Cr PAT, and an eye-catching OPM of ~35%. Sounds spicy? Wait. ROCE is 3.03%, ROE 2.96%, and debt is zero (good), but debtors are 1,527 days (that’s four years of “bhai paisa next month”).
Book value is ₹28.6, so the stock trades at ~0.94× P/B, which looks cheap until you notice the business scale is microscopic. GMIL is profitable now, but the engine is idling, not revving. Curious already?
2. Introduction – 50-Year-Old Company, Still Warming Up
Incorporated in 1975, GMIL operates a Ship Repair Division—a business that should thrive when vessels age, regulations tighten, and offshore activity rises. On paper, that’s a solid backdrop. In reality, GMIL has spent decades oscillating between losses and tiny profits, with negative reserves in the past and long stretches of weak sales growth.
FY25 did show a sharp YoY revenue jump (~82%), but the absolute base is so small that even a single additional repair contract can move the growth needle wildly. This is not a volume story; it’s a single-digit crore survival story.
Now add the twist: GMIL issued a ₹10 Cr corporate guarantee to its promoter-linked key customer Global Offshore Services Ltd (GOSL) for a ₹40 Cr loan, earning 0.5% p.a. commission. Translation: GMIL is tiny, but it’s backing a much larger ship. Brave… or risky? Let’s dig.
3. Business Model – WTF Do They
Even Do?
GMIL repairs ships. Period.
No shipbuilding, no fancy offshore EPC, no global yards. It provides specialised marine repair services, often for a few shipowners and on behalf of other workshops.
Services include:
- Pump overhauls
- Hydraulic repairs
- Engine overhaul repairs
- Gear box repair
- Marine fabrication
This is a project-based, relationship-driven business. If the key customer docks more often, GMIL eats. If not, GMIL fasts. There’s no product diversification, no pricing power, and no scale leverage.
The upside? High margins in good quarters because costs are largely fixed and depreciation is negligible.
The downside? Revenue visibility is poor, and customer concentration risk is sky-high. Would you run a repair shop with one big client and four years of unpaid bills?
4. Financials Overview – The Table That Tells the Truth
| Metric | Latest Qtr (Sep’25) | YoY Qtr (Sep’24) | Prev Qtr (Jun’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 0.26 | 0.29 | 0.26 | -10.3% | 0.0% |
| EBITDA (₹ Cr) | 0.09 | 0.09 | 0.06 | ~0% | +50% |
| PAT (₹ Cr) | 0.09 | 0.07 | 0.06 | +28.6% | +50% |
| EPS (₹) | 0.16 | 0.12 | 0.10 | +33% | +60% |
Annualised EPS (Q2 FY26) = 0.16 × 4 = ₹0.64
Commentary:
Margins jumped, profits improved, but sales shrank YoY. This is classic GMIL—profitability without scale. Can margins stay high if volumes don’t grow? Or is this just one lucky docking?
5. Valuation
