At a Glance
Swan Defence (formerly Reliance Naval) owns one of the largest shipbuilding docks in the world. But despite that, it hasn’t built profits in over a decade. Negative ROE, chronic losses, debt that rivals PSU banks, and yet… the stock is up from ₹36 to ₹240. Kya hai yeh jugad?
1. 🛳️ WTF Do They Even Do?
Let’s break it down:
- One of the world’s largest dry docks (662 x 65 m, 4 lakh DWT capacity)
- Can handle defence and commercial vessels – shipbuilding, repairs, refits
- Was once part of Anil Ambani’s Reliance Group as Reliance Naval
- Has been in and out of NCLT rumors, restructuring, and public shareholder tantrums
Today, Swan Defence is trying to float again… even if its balance sheet still screams SOS.
2. 💀 Financials: Welcome to the Titanic
Revenue Collapse:
From ₹2,534 Cr in FY14
➡ to just ₹7 Cr in FY25.
Net Profit:
From tiny profits in FY14
➡ to a loss of ₹182 Cr in FY25.
EPS:
From ₹0.04 (FY14)
➡ to –₹34.45 (FY25).
That’s not a dip. That’s 12 years of drowning.
3. 🔥 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| Market Cap | ₹1,203 Cr |
| Book Value | ₹56.1 |
| Price | ₹240 |
| P/B Ratio | 4.28x (for a loss-making co) |
| ROE | –46% |
| ROCE | –5.76% |
Fair value? Let’s be generous.
🧮 Fair Value Range (Assuming Turnaround, LOL)
- Say they revive and eventually do ₹50 Cr PAT in 3 years (hope + hallucination)
- Use P/E of 20 (industry average for defence capex)
- FV = ₹1,000 Cr market cap = ₹66/share
Even under “Miracle Modi Defence Capex + PSU Order Blitz”, ₹66 is a stretch. At ₹240? You’re paying for the reincarnation of INS Vikrant + Elon Musk rolled into one.
4. 🧨 What’s Cooking – Rumors, Revivals, Resignations
- June 2025: Company Secretary quit. No clarity on replacement.
- June 2025: Clarification issued on moneycontrol rumors about MPS (Minimum Public Shareholding) compliance.
- FY25 results: ₹182 Cr loss, again.
- No new contracts disclosed. Zero revenue visibility.
- No PSU bailouts or government capital infusion as of now.
In short, the ship is still drifting.
5. ⚖️ Balance Sheet – Titanic with Tinted Windows
| Item | FY25 |
|---|---|
| Equity | ₹53 Cr |
| Reserves | ₹243 Cr |
| Borrowings | ₹2,505 Cr |
| Debt/Equity | ~47x 😱 |
They have ₹2,500+ Cr debt and virtually no earnings to service it.
Assets are now mostly fixed, with low value realization.
The only thing floating is the stock.
6. 💸 Cash Flow – Negative Ka Bap
| Year | CFO |
|---|---|
| FY24 | –₹70 Cr |
| FY25 | –₹97 Cr |
Free cash flow? Negative.
Capex? None.
Finance cost? Chewing up what little revenue is left.
The only liquidity this company has… is in shareholder tears.
7. 🤕 Ratios – Hold My Beer
| Metric | Value |
|---|---|
| ROE | –46.43% |
| ROCE | –5.76% |
| Debt/Equity | ~47x |
| OPM | –1,500%+ (seriously) |
| Interest Cover | Non-existent |
It’s rare to see a company where margins are worse than a Ponzi scheme’s accounting.
8. 📉 P&L Breakdown – Show Me the Black Hole
- FY25 Sales: ₹7 Cr
- Operating Loss: ₹108 Cr
- Net Loss: ₹182 Cr
- Interest Expense: ₹21 Cr
- Revenue per quarter: Peanuts
- Share price return: Multibagger 🚀 (investor psychology is wild)
This is a zombie stock with an active fanbase.
9. ⚔️ Peer Comparison – Real Shipbuilders vs Swan Dive
| Company | MCap | OPM | ROE | CMP/BV |
|---|---|---|---|---|
| Mazagon Dock | ₹1.32L Cr | 18% | 34% | 16.7x |
| Cochin Shipyard | ₹53K Cr | 19% | 15.85% | 9.45x |
| Swan Defence | ₹1.2K Cr | –1,500% | –46% | 4.28x |
Swan is not in the same league. Heck, it’s not even in the same naval base.
10. 🧠 Miscellaneous – Promoter Drama
- Promoter holding: 94.91% – sudden increase from 0% in 2023
- Public float: Only 4.67%
- Shareholders: Dropped from 1.95 lakh to under 1 lakh in 2 years
- FII/DII: Absentee
This could mean:
- Delisting?
- Buyout plan?
- Revival attempt?
- Pump-n-dump?
Who knows. But the volatility risk is off the charts.
🧠 EduInvesting Verdict™
“This is not a turnaround. This is a shipwreck in fancy packaging with candles lit for defence orders that may never come.”
Swan Defence is:
- An asset-heavy, debt-heavy, loss-heavy company
- Stock has rallied over 6x from lows with no fundamentals
- Zero visibility of revenue recovery
- Highly manipulated float (only ~5% is public)
🎯 Fair Value Range: ₹20–₹66, assuming massive revival.
At ₹240? You’re not investing in defence.
You’re defenceless in a hype cycle.
Tags: Swan Defence, Reliance Naval, Shipbuilding Stocks, Penny Stock Rally, Defence Capex, Turnaround Failures, PSU Contract Stocks, NCLT Revival, Anil Ambani Group
✍️ Written by Prashant | 📅 July 3, 2025
