Ladies and gentlemen, good day and welcome to the Great Eastern Shipping Company Limited Q2 FY26 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. G. Shivakumar, Executive Director and CFO. Thank you, and over to you, sir. Thank you. Could you make me the presenter, please? Yeah. Thank you. Yeah. Good afternoon, everyone, and welcome to the results presentation for Q2 and H1 FY2026. Thank you for joining us. Standard disclaimers apply. I take it you've had a chance to go through our numbers. These are the highlights. We have a net profit of INR 581 crore on a consolidated basis. Our NAV has moved up by about INR 60 from the last quarter, and we have declared another interim dividend of INR 7.20. I won't go too much into the results themselves, but let's go to the normalized highlights. Our profit is more or less the same on a standalone basis as what it was in the previous quarter. That's Q1 FY2026. It's significantly lower than in Q2 FY2025, which is a corresponding quarter. A couple of impacts: significant profit on sale in the previous year and a drop in the capacity corresponding to the sale of those ships. That is one of the significant reasons for the profits coming down. Also, we have had slightly lower rates than we had in the corresponding quarter of last year. The offshore business continued to contribute to the profitability. The vessels are all fixed at very good levels. We have most of the vessels fixed. Four vessels continue to operate on short-term contracts and have also had a good run this year. This is the movement in the standalone net asset value. In March 2020, we were at INR 450 per share. We are now up more than two and a half X over the last five and a half years. Just to remind you where the change in the net asset value comes, it is not just a notional change in the market value of the vessels. There is a change in the market value, but the accretion since a year ago has come, or rather, it stayed at the same level as a year ago. The cash profit contribution has been INR 165. While the fleet value has dropped, this drop in the fleet value is, again, partly due to some sale of vessels and partly due to a drop in the value of tankers. We are more or less at the same level as we were a year ago. Similar story for the consolidated. We have INR 200 crores of cash profit, of which INR 28 crores has been paid out. We have had a drop in the fleet value. We have most of our tankers operating in the spot market. Our LPG carriers are fully fixed, and the Tribulk as well is operating mainly in the spot market. Jackup rigs are more or less covered, have a lot of their days covered for the rest of the financial year. Vessels are, as I mentioned, a lot of them are on long-term contracts. We have $186 million effectively of debt. This is the repayment schedule for that. We cannot prepay these because these are all the NCDs which have been floated and which are listed. We are not able to prepay them. Wherever loans could be prepaid, we have prepaid those because we do not want to have the negative carry of having debt. Looking at the fleet profile, currently at 41 vessels. However, we have committed for sale two of our 20-year-old tankers. One is a crude carrier, Jag Loke, and the other is the product tanker, Jag Pooja, both of which will be delivered in this quarter. We have also purchased our first Ultramax bulk carrier, which will be delivered by Q4 FY2026. We will be at, with base the commitments, we will be at 40 vessels. There is no change in the offshore fleet. Coming to the shipping markets, markets have been somewhat similar. Suezmax have been slightly higher. I am talking about the market averages. Suezmax have been slightly higher than they were in the previous year, while product tankers, MRs, have been significantly lower. We saw very strong Q1 in FY2025, which then tapered off towards the end of the first half. The levels have remained about the same since this time last year. You can see this line, which is the yellow line, and then the red line after that. It is in a very narrow range around the $20,000 mark. I will not go into all of these details, but basically, the big factor in influencing the crude tanker flows is the OPEC unwinding of the OPEC production cuts. That has resulted in demand for crude tankers because there is more commodity coming into the market. Along with that, we also have some new Brazilian supply coming into the market. These resulted in significant demand increase for crude tankers. Also, on the consumption side, China has been doing stock building and adding to their oil inventories while the fleet did not grow compared to the previous year. Product tankers, product trade also has been growing, and there have been strong diesel cracks in the Western markets, which have been supporting some of the flows. There have been a lot of disruption to Russian supplies of products because of refinery outages caused by drone attacks. That market has been facing some uncertainty, and some substitution has been happening of Russian supply. Asset prices have been stable for crude tankers. MR product tankers have been up slightly. They had gone down quite a lot between July, September last year and June this year, and now they have started recovering a little bit. The order book has been ticking up. We now have a crude order book of about 13%, while the product tanker order book is at 18%. In recent times, we have seen sanctions on Rosneft and Lukoil, the two largest Russian oil producers and exporters. That is likely to have, it is already starting to have, some impact. We have seen a flurry of fixings out of the U.S. and out of South America to possibly meet the shortfall which can be caused by this. We have also had a lot of ships getting sanctioned. We have between 10% and 15% of the tanker fleet currently under sanctions. Some of those vessels are having some difficulty trading. The current crude tanker market has shown significant tightening, especially for the VLCC and Suezmax sectors. Dry bulk was more or less the same as last year, slightly lower, but not too different. Let us look at those reasons. Sorry. While they were slightly lower than the previous year, they were better than they were in the first half of calendar 2025. Iron ore trade has been growing. While coal dropped in Q1, it's been recovering. Chinese production declined marginally. The highlight really was a grain trade, and this is a tariff impact. China ramped up its soybean exports from South America in advance of the grain season from the U.S. because of fear of the tariffs continuing on U.S. trade into China. Therefore, we had some front-ended grain trade, which normally does not happen. That helped the Panamax-Capesize market mainly. Both sides, of course, trade strong. China's import appetite stays very strong. That was up 14% year on year. Bulk asset prices are also firmer during the quarter. The order book still is at around 10-11%, not a very high number. Looking at LPG, this is another commodity that was potentially affected by worries on counter tariffs by China because there was a 10% tariff on LPG from the U.S. Therefore, the trade got a little disrupted. US LPG had to find other buyers, while the Chinese had to import from elsewhere, from the Middle East. This made the trade a little bit less efficient, which saw rates spiking a little bit. Again, not to the highs we have seen in the past, which is above $100,000, but going at least above $60,000 a day on occasion. Now, this is reversing. We are seeing potentially that there could be more cargoes going to China. The order book stays very elevated at 29%, while asset prices corrected marginally. This is from very, very high levels. Looking at fleet supply, I have already mentioned what the order book is. We have 29% for LPG. We have 18% for products, 13% for crude tankers, and under 11% for dry bulk. Scrapping, again, as one would expect with such strong markets, scrapping is extremely low. Looking at asset price movements, both sectors of tankers have seen an uptick. Bulk carriers also have seen an uptick in the last few months, while LPG is more or less where it was, maybe marginally down. Again, you do not get too many transactions here for assessing really. Looking at Greatship, this is the picture which has been in place for many, many years. This is a global supply of rigs and OSVs. There are many old rigs and offshore vessels which are in the fleet, which we expect will need to be removed from the fleet sometime. Against that, there is very little on order. You can see we are looking at about 2.5% order book to fleet ratio. Coming to the repricings of the vessels, we have the green bar, which is the vessels to be repriced in the second half of FY26. Of these, four are the most capable vessels. These are the large anchor handlers and the two MPSSVs, which we have consciously operated on short-term contracts internationally to maximize their revenues, while the other vessels, which are more India-suitable, are fixed into longer-term charters in India. These vessels will have to be repriced every few months. That is four of them. We have one of our PSVs coming off contract in this period as well. We have a rig. We have three of our rigs working currently. The fourth rig is going to go into her short-term contract. She is just being mobilized for her short-term contract off the coast of India. That should hopefully go on hire by end of November. That's a seven-month contract. However, one of the rigs which is working is on a four-month contract, which ends in February. We will need to reprice, find work for that rig. Again, we have another rig coming up in H1 FY2027, and we have a third rig coming up in H2 FY2027, which is around January 2027. Apart from that, we have some vessels coming off from time to time. Coming to financials, and you've seen this, we are currently net cash about $550 million. On a share price to consolidated NAV, we are at about 0.73. Thank you. That brings me to the end of the presentation, and we are happy to take questions. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, please click on the raise hand icon tab available on your toolbar or on the QA tab available on your screen. Kindly turn on your mic when the operator announces your name. In order to ensure that management is able to answer queries from all participants, kindly restrict your questions to three at a time. Kindly rejoin the queue for follow-up questions. You may post your text questions as well. We will wait for a moment while the question queue assembles. We'll take a first question from the line of Krishnaraj V from Acatis Investments. Please go ahead. Krishnaraj? Y es, we can. Please go ahead. Okay. Hi, Shiv. Thank you for taking my question. My question is not for the current quarter results, but largely on financing. I wanted to better understand the benefits of converting the INR debentures into synthetic fixed-rate USD loans. The reason I was drawn to this analysis was that broadly, we know that the INR debentures are fixed, costing around 8.5%. The synthetic USD loans come at, I reckon, around 6%. If I take the amortized cost of rupee depreciation on the principal until now, the INR 300 crore that you were carrying till end of March 2025 and about 3.4% depreciation of the rupee for this fiscal, it adds to about 3.8%-4% with still about four years to go. There is an increase in the rupee equivalent of the interest expense, which is about from about 25% or about 1.5% on the 6% at the midpoint of this typically 10-year term. All in all, it appears to me that this synthetic conversion gives you an all-in finance cost of about 11.3%-11.5% versus 8.5% if you just left it without doing the conversions. Of course, there are bank charges. I just wanted to understand how you think about this and what are the benefits you get. Yeah. A couple of things. Thanks for that question. It's an interesting one. A couple of things. One is fundamentally, we are trying to create a match between our currency of our assets and inflows and the liabilities. We're trying to create a dollar liability, which offsets dollar assets, which are on our balance sheet. Our ships are dollar assets, which earn dollar revenues. One is we're trying to match that. Our fundamental position is that we want to borrow dollars rather than rupees because we do not want that currency mismatch. We try not to take that view. Coming to the specific case of our current debentures that we have, you are right about the approximate Indian rupee coupon. It is about 8.5%. The issue is with the swap rate for the dollars. We do these debentures when we can get a better rate by doing these synthetic structures to get the dollar debt than by doing straight dollar debt. Effectively, our fixed rate in dollars on these is less than 4%. It is about 3.5%. If we look at it, the standard depreciation over a long period of time is approximately 3% of rupee versus dollar. We have a 5% spread in the interest cost, and you could lose 3% due to depreciation. You are better off by 2%. However, that is not our objective. It is not our objective to save interest cost. We are not taking a view on whether the rupee is going to depreciate faster than 3% or slower than 3%. We are just doing it as part of managing our risk because we have dollar inflows and dollar assets, and we are funding the dollar assets with a dollar liability. Got it. That is for information. We are up by 2% on these. Sorry. Essentially, if the spread is very attractive enough, that is when you go for these structures. Otherwise, you do not. That is my key takeaway. No, no, no, no. Sorry. I did not mean to put that. The spread so happened. It so happened that the spread was very attractive. However, when we compare the NCD, it is our intention to swap into dollars. Got it. Got it. The only comparison that we do is if I do a straight dollar loan, I get effectively benchmark whatever, LIBOR, SOFR, plus some spread in a dollar loan. Can I get below that cost by doing an NCD and swapping it into dollars? That is all we are looking at, not whether it is better to keep it in rupees or swap into dollars. Okay. Principally, I understand that. I mean, of course, I do recall a similar exercise that you had done just after the GFC when I think you had about 2,500 odd. I know the hedging loss reserves were sitting at about INR 1,000 crore in FY2016. That makes me wonder whether the benefits are worth the expenses. Obviously, it is a principal call. Right now, as we sit right now versus an Indian debt, just as an academic exercise, are we better off or worse off, if you know? We are better off by about 2%. What happens is, and I just need to close on whether we, so if we take the first point and the first principal that we will borrow in dollars, we will always have some MTM loss sitting in our books based on a regular depreciation of the rupee because that has to come into the P&L in any case when it depreciates. You do not have a corresponding revaluation of the asset of the ship that you purchased. That is why we do this normalized results slide because we are trying to strip out that, saying that is not something that you need to take into account. Okay. Got it. Okay. Sure. Thanks. I mean, every time I want to feel excited that the rupee is depreciated, I have to hold it back because of this. Anyway, go ahead. Yeah. Thank you so much. That answers my question. We are a net dollar long company because our debt will always be significantly lower than the value of the assets and the dollar balances put together. In fact, INR 30 out of our last quarter improvement in NAV has come from the depreciation of the rupee. Yeah. I saw that in the FX screen. Yeah. Sure. Thank you. Thank you so much. Thanks a lot. That's all I have. Yeah. Thank you. We'll take our next question from the line of [Hersh C], an individual investor. Please go ahead. Yeah. Am I audible? Yes. Please go ahead. Shiv, can you go to the slide on normalized financials? Yep. Sure. Yeah. Is this the one? Yeah. I'm just looking at the—you want the P&L, right? The filing that was done, and there were some changes in—no, no. I think there was an error in the titles of the columns. Okay. Because some of the consolidated figure were around INR 2,700 crore. So I just wanted to understand what the changes that were. Sorry. It is INR 2,700 crore, right? For H1? No. For Q2 in the filing, it is mentioned as INR 2,700 crore. No, no, no. That's why. So the columns got interchanged. You will see that the Q2 was showing a higher number than H1 because the column heads were interchanged. Oh, okay. Okay. Just one thing on the NAV slide, I just wanted to understand, given the asset prices have largely remained same, why do we see a decrease in the fleet value? You'll see a decrease in fleet value when we sell ships. So when that goes from the ship into profit on sale, then you'll see a decrease in the fleet value. Are you referring to the bridge that we did for the NAV? Yeah. Yeah. That one. Because largely from the last quarter, the prices have remained same or, in fact, improved, but we see a decrease in the fleet value. No, this is not from the last quarter. This is from a year ago. This is from September 2024. Okay. So this takes in the effect the entire year's changes. That's correct. July-September 2024 was when product tanker prices were pretty high, and it came off a lot by June this year. Understood. Also, there would be some amount of natural decrease because of the aging of fleet that get captured. That is correct. That's correct. You're absolutely right. Understood. Understood. Yeah. Thanks. Thanks a lot for that. In this quarter, actually, we have had an improvement of INR 60 or so in the NAV, where the fleet value is more or less the same, very marginal difference. The INR 60 is broken up into INR 30 approximately of cash earnings and INR 30 of rupee depreciation impact. Understood. Understood. Okay. Okay. Thanks a lot. Thank you. Thank you. We'll take our next question from the line of Amit Khetan from Laburnum Capital. Please go ahead. Hi. Am I audible? Yes, you're audible. Thank you. Yeah. Yeah. Thank you for taking my question. I had a couple of questions on capital allocation. If I look at we have some INR 7,000 crore in net cash. Even at the current rate of paying dividends, we are accruing at something like INR 2,000 crore per annum, right? Add to that, we have significant debt capacity, and one could argue that some moderate level of debt is even good for the business. Now, if I look at our cash flow statement, we have deployed INR 5,500 crore over the last decade on a net basis. This includes a period of 2016 to 2018 when we were quite active in buying vessels, right? My question is, first, how confident are we that we can deploy this scale of capital when markets are weak? Second, is there a limit to this cash accumulation? Where do we take a call that we have more than sufficient capital which we can intelligently deploy, and therefore, it makes sense to largely dividend it out? Would love to get your thoughts on how the management and the board thinks about this. Yeah. Thanks, Amit. I've got Rahul here with me, and he will take that question. That is a good question that you have posed. As you can imagine, we do our own internal assessment of that. Of course, our fleet has aged over this period of time, considering we have not significantly invested in new ships. Of course, we continue to follow a switch strategy, which we did mention in the past, that we would not like to ideally drop below this 40-odd ships. Therefore, in this quarter, we have actually bought a few ships, sold some of the older ships, and that does take in a certain amount of capital. Looking in the future, let's say, even if the markets do not come off for some time, we will still continue to do the switch strategy. Of course, every time we evaluate such a deal, we do look at how the spreads work, the spread meaning selling an older ship and buying a newer ship and whether it makes sense or not. Assuming it does, we've got ships aging in the next couple of calendar years, and that will take in a certain amount of capital. A large part of the capital, like you mentioned, is being kept aside as of now for more favorable prices. We have done historical calculations and assessments of how liquid the shipping market is in both the second-hand as well as in new building. Of course, in 2016 to 2018, the business was smaller. The last few years have been very profitable, and therefore, the amount of cash we have, the amount of debt we can raise has significantly increased. The potential CapEx we can do in the future has also increased. In 2016 to 2018, we solely focused on the second-hand market. In the new building market, you can absorb a significant amount of money. Just to give you an example, today, if you build a Suezmax Tanker, it costs about $80 million to build. If you place an order for two, three, or four of those, it will absorb a significant amount of money. Now, do the yards have that kind of capability? They easily do. We have seen companies much larger than ourselves being able to deploy much larger amounts of capital. We do keep this in mind. As long as we believe that we can invest this intelligently in the future, we believe that it is worth holding on to the cash. Fair enough. Have we considered? I know you've talked about this in the past where we've looked at the container segment. Has there been any progress there in terms of new segments that we are looking at? In the container segment, we do watch it closely. We don't cover it here because, of course, we're not invested in it. I can just give you a very brief overview. Our decision to hold back on the sector has, as of now, been all right. There are two things. The nature of the container business is different from the tanker business because in the tanker business or the dry bulk or LPG business, we deal directly with the end customer. For example, an ExxonMobil, Reliance, Chevron, companies like that. In the liner business, what we would do is, ideally, we would be tonnage providers. You'd buy a container ship. You would give it to the likes of Maersk. Maersk has the responsibility to fill up the ship with container boxes, which means Maersk charges a box rate, right, per box to the end customer. There is an in-between layer. Now, the box rates have significantly come off over the last few years. As you may be aware, the container market had probably a once-in-a-lifetime kind of boom over the last few years. Those rates have come off significantly. The order books are very strong in the container space. We expect—and it is very difficult to call these markets and know when all these things will happen—we do expect that there can be a correction in the freight rates that a Tannish provider could earn in the future, along with the asset values of those ships. If we get those opportunities, we would seriously look at the container space as well. Also, just for your knowledge, the ships in the container business do absorb a lot of capital. Got it. Got it. Just a last follow-up to the capital allocation. Now, when the markets turn weak, given that we would be looking at multiple vessels at the same time, and each transaction, my guess, takes a few months to close, do we have the team in place to sort of, for an increased level of activity, should that happen? Yes. That is a very good question to ask. Of course, we have also done our assessment to know that when we do need to act quick, do we have the capability to act quick, both in evaluation and being able to take over a significant number of ships? Again, to draw to your example of 2016 to 2018, at that time, we were about 30 ships, and we scaled up to 50 ships. Had we—we have our own internal discipline of the amount of leverage we needed to take. At that point in time, we were capped out on what we believed would be the investable surplus that we wished to deploy at that time. Had it been that we had more money available, we could have executed more patterns. We could have gone up to 55, 60. Now, that is a bit of speculation, but I am quite confident we could have executed it from an operational angle. That is a doubling of the size, right? Now, today, of course, we are starting off on a bigger base. Therefore, if you're unable to execute that, then that would be, after waiting for so long, that would be unforgivable. Clearly, we keep that in mind, and we've prepared ourselves for that eventuality. Got it. We have the bandwidth for that? Yes, of course. Yeah. Yeah. Okay. Perfect. Thank you. All right. Thank you. Thank you. Next question is from the line of Rajakumar Vaidyanathan from RK Invest. Please go ahead. Mr. Vaidyanathan? Good evening. Can you? Yes, please go ahead. Can you hear me? Yes, we can hear you. Yes, we can. Good evening. Yeah. Good evening. Thanks for the opportunity. My question is to Shiv. It's on the FX line item. Sorry for a long question. I see that the FX line item is appearing under three line items in P&L. There is an item E and F. There is also one on the other comprehensive income line where you're showing again INR 54 crores to be reclassified to P&L at a later stage. I would like to know what are all the major buckets sitting in each of these categories? Okay. One minute. Let's go through the numbers. Because first one, you said you're repricing the loan, but that will not show up on the asset side because of the gap reasons. The asset repricing is sitting off balance sheet, so you will only show the loss in P&L. That part I understood. Is that INR 59 crores that you're showing, is that what you're referring to, the loss? Yes. One minute. Let's look at this. You're referring to standalone results, right? No, I'm looking at the console. Okay. Let's go through that then. One moment. Let's go with the—there are three. First is 4E. Yeah. Okay. That is change in fair value or settlement of derivative contracts. That is a loss in this case. Is a derivative which converts our rupee debt to dollar debt. Yeah. Okay. Which, because the rupee has depreciated, has now gone—is now worse. The MTM is worse. Yeah. Yeah. I understand that. Yeah. The second one, which is F, is the revaluation of our cash balances. Our cash balances are significant. Dollar cash balances have gotten worse. Got it. Yeah. That's right. So those are the two items. Yeah. The third one? Sorry. Where is the third one? I'm looking at 8C, items that will be reclassified to P&L. 54. Yeah. This is, I think, referring to our investment in subsidiaries, in overseas subsidiaries, where that investment gets revalued. Because you've invested in dollars, right? You have capital in certain dollars. That has got revalued. This has got nothing to do with your cash flow hedges. I thought the MTM— No, no, no, no, no. Future cash flow hedges are sitting here. No. No. This has nothing to do with the cash flow because that gets classified to P&L immediately. Okay. How about the future hedges? I mean, the contracts that you have not fulfilled for which you are taking a forward. You mean the—sorry. When you are talking about cash flow hedges, you are talking about general dollar sales? Based on your future, you would have sold your forward. No, no, no. No, no. That is not there at all. We do very little of dollar sales forward. Okay. Okay. Yeah. Yeah. The reason why I am asking this—yeah. Shiv, sorry to labor on the same point. The reason for this question is, in one of the, I think, previous calls when we saw the rupee depreciation, you mentioned that do not expect to see a positive impact on the P&L because of the loan repricing. Net-net, we will be losing on the P&L, but actually, factually, we will be gaining. From a P&L standpoint, we will be losing. That is what you mentioned in one of the calls. No, that is absolutely correct. The reason why depreciation is a positive for our P&L currently is because we have more dollar current assets, which is mainly cash, than dollar liabilities, which is the loans. We have $180 million of loans and close to $400 million of cash. That is why, on a net basis, we are benefiting on $200 million. That is not a normal situation. Under normal circumstances, we would have $700 million or $800 million of debt. This would have been the case four years ago. We would have had $700 million of dollar debt and maybe $300 million or $200 million of cash, which meant that if there was a depreciation, you would have had a negative impact on the P&L, which is also the comment that we put into our when we explained the normalized. Okay. Got it. Yeah. Whatever statement you mentioned earlier, it holds good, just subject to the cash holding. That's correct. That's right. Got it, Shiv. Thanks for the clarification. The second question is, there has been an uptick on the VLCC, the crude carriers of late. I just want to know if you can give any color. Is there a talk about floating storage back in vogue, and is that what is driving the prices? What is the current scenario? Also, any color on the future as well? Right now, the economics are not floating storage. You need to have a steep contango, especially at these VLCC rates. When markets go up, you can put some reasons. Of course, the extent to which it has rallied, whenever market goes up, you can't pinpoint A, B, C reason and say, "Exactly, this is why the market should be exactly at this level." It currently seems to be at a very strong level. We did see that there were a lot of sanctions to Russian refineries and oil producers. There's been a bit of a scramble for cargoes. When you go for—and Shiv mentioned it earlier in the presentation—when you go for these Atlantic basin crudes, like places like Brazil, Guyana, or even from the Middle East, because the Middle East has unwound some of their OPEC cuts, which they had. The extra crude that countries like China and India would need to replace the Russian barrels would come from these nations. In these nations, generally, they pick them up on VLCCs, while main Russian exports have been on Aframax and Suezmax. There has been a bit of a switch. Of course, the scramble for cargoes, along with extra sanctioning to not only the Russian crude producers, but also there have been additional sanctions on a bunch of vessels that have carried Russian cargoes, which has reduced some of the supply from the market, led to people wanting more needing ships from the international trading fleet. We saw a rebound in the rate, along with the fact that China has also been stocking up, and that also added to the demand for ships. Okay. How much of that benefit has come to us? I think we do not own any VLCCs, right? No, we do not. We own Suezmax and Aframax, and they have also strengthened. Of course, the VLCC saw a big jump. We do not have that. All our crude tankers are in the spot market. To the extent that Suezmax and Aframax have strengthened, we get all the benefit. Okay. Do you expect this benefit to last for at least a couple of quarters, if not more? We do not make a forecast on the rates because, genuinely, you do not know which factors will come to either pull up the market or pull down the market. We'll refrain from that. Oh. Okay. Yeah. The last question is on the rigs part. In the previous call, you mentioned there will be a lumpy expenditure whenever the rigs go for a contract. I just want to know, have you taken any hit in this quarter, or the hit will come in the coming quarter? Because you mentioned a couple of your rigs are going to go for work in Q3. It will mainly come in the coming quarters, the coming two quarters. Okay. There will be a hit in the bottom line, or the bottom line will be taken care of? Yes. There will be an extra amount of expenses to prepare the rigs for the new contracts. Yeah. No. My question is, incrementally, will you gain or you will not see that benefit in Q3, Q4? Yeah. The initial period of any contract tends to be loaded with these expenditures. Later on, it gets sort of free because it is only OPEX then. We would not expect too much contribution from the rigs in this period, in this quarter and next month. Yeah. Okay. Shiv, the last question. On the forecast, you have mentioned for the rigs, the visibility is only 75% for Q3. Is there—because in Q2 also, you mentioned the same 75%. I mean, given that you already have a visibility of these rigs going into contract, why have you not changed the percentage? That will be because those rigs will be off-hire for some time, preparing for those contracts. Okay. Got it. Yeah. Thank you so much. We do not count the off-hire time as part of the coverage. Okay. Got it. Yeah. Thank you so much. Yeah. Thank you. Thank you. We'll take our next question from Kirtan Mehta from Baroda BNP Paribas Mutual Fund. Please go ahead. Thank you, sir. But your audio is not clear, Kirtan. Is this better? A little better. Sir, you're able to hear it? Okay. Go ahead. We can hear. Yeah. One question in terms of sort of some of the rates have been a bit tighter than persistent 3D tightness. You mentioned that some of the contracts may keep on either a short-term contract or a spot contract to sort of continue to maximize the earnings from this tightness. So could you sort of summarize at the portfolio level how much of such short-term— Sorry. The line is very unclear. Yeah. We're not able to— It's very difficult to get your question. Yeah. Yeah. You could maybe put it up in the text. Sure. I'll do that. Thank you. Thank you. We'll take our next question from Karan Bhatelia from MAIQ Capital. Please go ahead. Hello. Yes, Karan. We can hear you. Please go ahead. Yeah. Hi, sir. Good evening. Congratulations for the result. Sir, I'm sorry I joined late, so if I'm just repeating the question. I was going through an article regarding U.S.-China trade. I've been seeing that there's been a massive drop in the containers as well. How does it affect our— The line has gone. Yeah. Just on a very rough thing, the containers, of course, since we are not there, it does not affect us. The only two commodities which are really affected by the U.S.-China trade war are grains and LPG. Those are the only two commodities. We are not affected by what happens on the container front. I get it, sir. But just to understand, basically, those containers are being transported via maybe a transfer max or whatever, some sort of a— The container ships are different from those container ships are different from all our ships. We do not have any container ships. Okay. Got it. I will be my apology. Got it, sir. Thank you. Okay Thank you. Thank you. Ladies and gentlemen, to ask a question, please click on the raise an icon tab available on your toolbar. I can see a question. We have one next question. Yes. I will just read it out. This is from Himanshu Upadhyay. The asset prices have increased in the last few months despite the charter rates not improving that much on product and dry bulk carriers. Can you tell what is happening and why asset prices have moved up? That is a good observation. On crude, the charter rates have moved up. Tribal, also, I would say the charter rates have moved up in the last couple of months. Shiv mentioned that there has been some forward buying. You can see some link between the asset prices and tribal. Of course, if you try to draw exact relationships of, just to oversimplify it, rates have moved up 10%, asset value should move up exactly by 10%. That never happens in any market. The broad direction has been upward for both. There is some positive expectation on tribal, mainly on the cape-sized vessels, where we have seen the asset prices holding up much stronger than the sub-capes, mainly because there are many more mines coming up in West Africa, both for iron ore and bauxite. On product tankers, yes, I agree that we have seen the prices strengthen a bit despite the charter rates not moving up as much. There is a bit of a de-link over there. Eventually, it is dependent on people's ability to procure vessels in the second-hand market. Sometimes, the last few transactions set the price. While I'm not forecasting it very much, maybe possible that maybe starting of next year, some of that extra increase in the price comes off if the charter rates do not improve. Yeah. Can we move on to the next question? Yes. Can we go to the next? Yeah. Yes. You want me to read? Yeah. Yeah. What is the current outlook on dry bulk market with respect to coal and iron ore? Has the market picked up in the rates? Again, I'm not getting into a forecast of the market, but I can just tell you roughly where we are today. The coal market has been a bit weak. Firstly, tribal rates move as a totality of all the tribal commodities. You've only focused on coal and iron ore. While there are months where it's strong and months it's weak, overall, coal and iron ore trades have been a bit weak. In iron ore, if you see, the major demand area is China. You're maybe reading in the news that the amount the government wants to spend on infrastructure is a bit topped out. We're also seeing the real estate market facing a lot of issues. Iron ore is also consumed in the export market. So when China is producing a variety of goods that are sold to America, Europe, and other kinds of countries, there is a consumption of steel and therefore consumption of iron ore. All of the steel production in China has been down this year, even in the last couple of years, by a few percentage points each year. However, the iron ore production in China sometimes remains weak, mainly because the iron content in that iron ore is on the lower side. Because the iron ore prices today are roughly on the lower side, sometimes steel mills find it more economical to import higher iron content ore from countries like Australia and Brazil instead of using domestic ore. It is on the margin of whether they import a little bit more or import a little bit less. That is at least somewhat holding up the iron ore imports. Coal has been on the weaker side. We are seeing power generation increase in both India and the United States, maybe just 2% or 2-3%. Renewable energy growth has been strong. Hydropower production has been decent. Because of that, coal imports have been a bit weak. We are seeing minor bulks, mainly driven by bauxite, fertilizer, other agricultural products holding up very well. That is why we are seeing the strength in this dry bulk market despite the main two commodities actually being on the weaker side. I hope that has answered your question. If you could just move on to the next one, please. Yes. Can we take the live question, sir? Yeah. Let's take one live question, and then we will go on to the next. Yes. We have a question from [Hersh C], an individual investor. Please go ahead. Yeah. Am I audible? Yes. Please go ahead. Yeah. Shiv, I am just looking at the standalone cash flow statement, and there is some INR 425 crore of loan to subsidiaries. I believe this is to GIL, correct? That's correct. That's correct. This is the sum total of all the payment? All the debt has been retired from GIL, or? That's correct. There is no other debt now in the group apart from the Great Eastern debt itself, apart from R&D. Understood. Just looking at the financing activity as well, I mean, just comparing from the last H1, there was some INR 282 crore of dividend, and this year, it has come down to almost INR 180 crore. Any reason for that? Given that we are better off compared to last year from a cash availability point of view, the reason for this reduction in dividends? Good question. The profitability is lower in this year than in the previous year. The rupees per share should not be so low. That's right. One moment. Just to check. Just give us a second, please. Not really. So we had no, it is not lower. Was the statement? Let me just check. This might be that we did something as a final instead of an interim. So there was just a timing difference. Because last year, we did a total of INR 424 crore. It cannot be all like that. We will just see this. Okay. As a principle, ideally, it should match or, in fact, improve, right? No. The profits are not higher than the previous year. The profits are not higher than in the previous year, right? Okay. H1 was lower than the previous year. U nderstood. What is the management's thought process while declaring the dividends? The current quarter of profitability, primarily? Yeah. One is to look at the current quarter of profitability. Current quarter, six months. In this case, because it's a quarterly dividend, current quarter of profitability. Yeah. That's what we are looking at usually and whatever requirements are there. You decide a rate depending on how much we want to retain. Understood. Understood. Hersh, you're through with your question? Yeah. That's also mine. Yeah. Yeah. Thank you. We have a question from Krishnaraj V from Acatis Investments. Please go ahead. Yeah. I thought I'll just educate myself with another question. When I look at your business, it seems to me that for the classes of ship that you trade in, the supply side is more foreseeable than the demand side because you know the order book and you know the scrapping, etc. If that is the case, one does see that scrapping has not been intense at all, although the order book as a percentage of fleet supply keeps growing. It appears to me that if the market has to crack to give you some opportunities, the scrapping has to intensify. I do not know if my line of thinking is correct, and if you can throw some insights around it, please. Thank you. Firstly, on the order book, what you are saying is broadly correct. Let us take today's position, right? The market has been fairly strong. You have to just remember one thing: when you look at yard capacity, yards have the ability to build ships in our sectors but also in other sectors. As of today, and if you just take maybe calendar 2026, 2027, 2028, most of the yards are full with LNG and container ship orders. Those ships are generally more profitable than building tankers and bulkers. Considering that those markets were very strong, people went and placed orders and filled up all the slots. Had those slots not been filled, then the order book, then shipyards could build ships much faster, and they would have had space for us to order tankers and bulkers. Considering that today, you know that the yards are generally full, they're only taking orders for end 2028 to calendar 2029. Therefore, we do broadly know what the fleet supply is going to be over the next three years. To build a ship, let's say this is just for your general knowledge, but let's say LNG and container ship orders had not filled up all these yard slots, then it generally takes about 12-18 months to build a ship, which means that people could have gone and placed orders, and you would have seen ships coming in calendar 2027. The lead time to increase the order book is much shorter. In today's situation, at least you know what it's going to look like for the next three years. Now, scrapping is a more complicated forecast. Generally, we have seen periods in the past where markets have been weak, but owners have held on to their ships, either because they're still able to trade them or their balance sheets are strong enough for them to hold it on a bit more. Sometimes we have seen scrapping ages reduce. Sometimes we see scrapping ages hold on. That can take a bit of a guess. Sorry, you wanted to say your last question? I think you asked. Yeah. My question was that I think you've answered most of it. I just want to educate myself. I mean, there's nothing specific. Y eah. No problem. You're free to ask. Yeah. Yeah. I think from what I'm hearing from you is that order book, more or less, yards are full. Fleet supply, not many ships are going to be coming into the water. What can happen is that there are a lot of ships that are older, especially other than the product. I mean, the product is quite old. Scrapping can intensify. If scrapping intensifies, then there can be supply-related spikes in the charter rates and so forth. I was trying to just understand that. That is what the question is. If, only because you are asking it as a general question, the market was very poor and a lot of ships got scrapped, and the market prices, the charter rates increased as a result of that scrapping, then owners, as long as charters are willing to take those ships, may hold back on further scrapping. What happens for a ship owner is if the debt is paid off and the ship is fairly old, and as long as they can make up the operating costs, generally, the tendency is to continue to run those ships. If you are in a world where fleet supply that is coming online is not very strong, maybe charters release some of the age norms that they have for those kinds of ships. It is all a matter of supply-demand because you have to move the cargo eventually. Got it. You do not see any regulatory changes on the horizon that would accelerate scrapping? As of today, the generally internationally traded tankers do not really cross the age of 21. There is, of course, a market for ships above 21, but it is very far and few. Some of the maybe the carbon-related regulations that are coming up are multiple years away. We have seen some delays from IMO as well. We do not even know when those are coming in. In the near future, I would not think of any regulations coming in to accelerate scrapping. Got it. Yeah. Thanks a lot. Okay. Thank you. Thank you. Hersh, would you like to take the text question? Yeah. So we'll just do that. The first question is, first set is from Kirtan Mehta. Three questions. How much percentage of our fleet is geared to capture persistent higher rate, either through spot or short-term contract exposure? Broadly, we maintain most of our fleet on the spot market. The LPG fleet is generally fixed out. We have four of those ships out of our 40, so call that 10%. Out of the remaining ships, 36, maybe three, four at any given point in time are on time charter. We have no fixed rule of fixing any ships on time charter. We are always in a position, always willing to be in a position to take advantage of the spot market. The second question is? We are seeing continued strength in diesel crack and recent rise in gasoline crack. Will these likely to ease over November as refineries return? That's a tough one. Yeah. That's a tough one. It'll be very difficult for us to speculate on how these cracks are going to change. The next question is from Ojas Singh. With the government Sagarmala project program aiming to boost coastal shipping, how is Great Eastern positioned to benefit from these initiatives? Are we actively taking advantage of the opportunities arising from Sagarmala to expand our business or improve efficiency? We have always participated in the coastal trade, and we have been participants in the coastal trade for a long time. We will continue to participate whenever there are opportunities for us to deploy our ships here. Next question is from Snigda Tibrewala. The investor presentation says that the NAV per share is INR 1,484. Is the NAV calculated as the equity shareholders' funds in the balance sheet or any other method? The way we calculate net asset value is that we just replace the net block of the fleet with the market value of the fleet. We then calculate what is left over as the shareholders' funds. If the net block is, say, INR 8,100 crore, which let's call $900 million, but our fleet is valued at $1.6 billion, which is, let's say, INR 13,000-INR 14,000 crore, then we replace it with that number. We then calculate the net asset value minus the net debt and divided by number of shares gives the net asset value per share. This is basically shareholders' funds but with the ships marked to market. The last of the text questions we see here, many from Mr. Rajakumar Vaidyanathan. One moment. Sorry. Many foreign vessels are converting their registration to India location. Our government recently has put an ambitious target for shipbuilding and ship repair. Your comments? Lastly, my humble pronouns to Shri K.M. Sheth Ji for an illustrious career. May the God bless him, good health, and peace. Thank you for that. We will convey it to Mr. Sheth. Shipping seems to have entered the government's has become very big in the government's consciousness. We are very happy about that, and we are very happy with the development of a shipping ecosystem in India. We welcome all of these initiatives from the government. Thank you, sir. There are no further questions, sir. Any closing comments from you? No. Nothing. No closing comments. The transcript and the audio will be put up on our website shortly. We are always available to speak with investors. Please reach out to our team. Our contact details are given. Please reach out to our team if you have any further questions. Thank you. Thank you, members of the management team. On behalf of the Great Eastern Shipping Company, that concludes this conference. Thank you for joining us, and you may now exit the meeting.