ABS Marine Services Limited
Company
| Website 🔗 |  |
| Business Activity | Service |
| Division | Maritime |
| Sub-class | Ship Management |
| Location | Chennai, Tamil Nadu Cochin, Kerala Mumbai, Maharashtra |
| Establishment Year | 1992 |
Management
| Managing Director | Capt. P B Narayanan |
| Educational Qualifications | Master Mariner |
| Experience | Over 40 years in the Marine Industry, 15+ years at sea, 5 years in command |
| Annual Salary | 72.00 Lakhs |
| Total Number of Employees | 468 |
About
Company History:
ABS Marine Services Limited (ABSMSL) was founded in 1992 and has evolved from providing offshore vessel management to a fully integrated maritime company offering ship owning, ship management, marine services, and port services.
Fleet Diversity:
ABSMSL operates a diverse fleet, including offshore vessels, research vessels, tankers, passenger vessels, and harbour crafts. This diversity allows them to cater to various clients and contracts.
The company owns five vessels, including two advanced offshore vessels serving the oil and gas sector and three harbour crafts serving the Indian ports sector.
The company’s fleet, which includes fully owned, chartered-in, and managed vessels, features state-of-the-art DP-2 Multipurpose Offshore Supply Vessels, Anchor Handling Towing Supply Vessels, multi-disciplinary Ocean Research Vessels, Coastal Research Vessels, Fishery Oceanographic Research Vessels, Bulk Carriers, Gas Tankers, Oil Tankers, Passenger Vessels, and High-Speed Crafts & Harbour Crafts
| Type of Vessel | Number of Vessel | Owned / Ship Management / Chartered |
| DP Anchor Handling Towing Supply Vessel | 1 | Owned & Managed |
| DP Multi-Purpose Offshore Support Vessel | 1 | Owned & Managed |
| Passenger Vessels | 1 | Chartered & Managed |
| Harbour Crafts | 3 | Owned & Managed |
| DP Ocean Research Vessels | 2 | Managed |
| Coastal Research Vessels | 3 | Managed |
| Fishery Oceanographic Research Vessel | 1 | Managed |
| Bulk Carriers | 4 | Managed |
| Oil Tankers | 10 | Managed |
| Pasenger Vessels | 10 | Managed |
Business Divisions
Ship Management: The company offers comprehensive ship management services, including vessel operations management, crew management, technical management, catering & housekeeping, agency coordination, and operation & maintenance of scientific equipment.
Marine Services: This division provides chartering services, ship inspections, survey and certificate liaisoning, new build & ship conversion supervision, ship sale & purchase, dry dock services, and single-point mooring (SPM) services.
Port Services:
The company offers various port services such as pilot boat services, security boat patrolling, vessel mooring, oil spill response, fire tender services, and harbour tug management & operation.
Ship Owning:
The company owns a fleet of vessels, including DP-2 multipurpose offshore supply vessels, anchor-handling towing supply vessels, and harbour crafts. They plan to expand their fleet strategically based on market conditions.
Clients:
Oil and Gas Companies:
The company’s offshore vessels, such as the DP-2 Multipurpose Offshore Supply Vessels and Anchor Handling Towing Supply Vessels, support offshore exploration and production activities for oil and gas companies.
Government and Research Institutions:
The company manages and operates research vessels for organizations like the Ministry of Earth Science, National Institute of Ocean Technology, and National Centre for Polar and Ocean Research.
Port Authorities and Shipping Companies:
The company’s port services, including pilot boats, security boats, vessel mooring, and harbour tugs, are essential for the smooth functioning of ports and harbours and are used by port authorities and shipping companies.
Passenger Vessel Operators:
The company provides crew management services for various types of vessels, including oil tankers, gas tankers, bulk carriers, and passenger vessels.
ABSMSL’s business is directly impacted by overall levels of economic activity and international shipping volumes, particularly within the energy-related shipping sector.
Business Flow Chart
Revenue – Category
Audit and Legal
Related Party Transactions:
The company related party transactions represent 33.92% of the total revenue for the latest period (FY 2023-24).
Auditor’s Remarks:
The Statutory Auditors have issued an unqualified opinion.
Pending Trademark Registration:
The company’s name and logo are not registered trademarks, which could expose them to potential infringement risks.
Contingent Liabilities:
As of March 31, 2024, ABS Marine Services Limited has contingent liabilities totalling ₹25.95 Crore
Legal Cases:
The company, its promoters, directors, subsidiaries, and group companies are not currently involved in any material legal proceedings or tax disputes.
SWOT Analysis
Strengths
| Established Brand and Reputation: The company has a strong reputation and long-standing relationships with clients in the government and public sectors. |
| Diversified Fleet: The company’s fleet diversity allows it to cater to various customer needs and market segments, reducing reliance on any single type of vessel or service. |
| Experienced Management: The company is led by a seasoned management team with extensive experience in the shipping industry. |
| In-house Management: The company’s in-house management approach allows for greater control over operations, cost efficiency, and faster issue resolution. |
Weaknesses
| Dependence on a Few Clients: A significant portion of the company’s revenue comes from a few key clients, making it vulnerable to any loss of business from these clients. |
| Dependence on the Secondary Market for Vessel Acquisition: The company relies on the secondary market to acquire vessels, which can be subject to price fluctuations and limited availability. |
| Working Capital Requirements: The company has substantial working capital requirements, which could strain its financial resources and limit its growth potential. |
Opportunities
| Growth in Indian Economy: The company is well-positioned to capitalize on the anticipated growth in the Indian economy and the associated increase in shipping activities. |
| Government Focus on Infrastructure Development: The Indian government’s focus on infrastructure development, including port modernization and connectivity, presents opportunities for the company to expand its port services business. |
Threats
| Intense Competition: The shipping industry is highly competitive, with both local and global players vying for contracts. This could pressure the company’s pricing and margins. |
| Fluctuating Fuel Prices and Operating Costs: The company’s profitability can be impacted by fluctuations in fuel prices and other operating costs, which may be difficult to pass on to customers. |
| Global Economic Slowdown: A global economic slowdown could adversely affect the Indian economy and, consequently, the demand for the company’s services. |
| Natural Calamities and Force Majeure Events: Natural disasters and other unforeseen events could disrupt the company’s operations and negatively impact its financial performance. |
Porter’s Five Forces1
| Threat of New Entrants | LOW – MODERATE |
| The industry has high barriers to entry due to the significant capital investment required for vessel acquisition and the need for specialized expertise and experience. The regulatory environment also poses challenges for new entrants. |
| Bargaining Power of Suppliers | MODERATE |
| The company relies on suppliers for vessels, spare parts, fuel, and shipyard services. The bargaining power of suppliers can vary depending on the availability of substitutes and the concentration of suppliers in the market. |
| Bargaining Power of Buyers | HIGH |
| The company’s client base includes government agencies, PSUs, and large industries. These buyers may have significant bargaining power due to their size and the availability of alternative service providers. |
| Threat of Substitute Products or Services | LOW |
| The primary substitutes for the company’s services are other ship management companies providing similar services |
| Rivalry Among Existing Competitors | HIGH |
| The shipping industry is highly competitive, with several local, regional, and global players. The rivalry is based on factors such as price, service quality, vessel availability, and reputation. |
Peer Comparison
Principal competitors:
Unlisted: The Greatship Group, Samson Maritime Ltd, Raj Shipping Agencies Ltd,
Listed: Seamec Limited, Shipping Corporation of India
| Company/KPI | ABS Marine Services Limited | SEAMEC Limited | Shipping Corporation of India Limited |
| Revenue (Crores) | 135 | 729 | 5046 |
| ROCE | 20% | 12.50% | 7.43% |
| ROE | 23% | 13.80% | 8.49% |
| Operating Profit Margin | 33% | 36% | 28% |
Green Box
Established Brand and Reputation:
The company has been operating since 1992, allowing it to build a strong brand name and cultivate lasting relationships with clients, particularly in the government and public sectors. This reputation likely provides ABS Marine with a competitive edge in securing contracts and tenders.
Diversified Fleet:
The company boasts a diverse fleet of vessels, ranging from offshore support vessels to harbour crafts. This diversification enables them to cater to a broader range of customer needs and tap into different market segments, thereby reducing reliance on any single service or vessel type.
In-house Management:
The company handles all aspects of its operations internally, from technical management to crewing and procurement. This integrated approach likely translates to better cost control, improved efficiency, and faster response times.
Acquisition of an Offshore Vessel:
The company plans to utilize a significant portion of the net proceeds (up to ₹55 Crores) to partially fund the acquisition of an offshore vessel from the secondary market. This strategic acquisition aims to enhance the company’s fleet capacity and enable it to capitalize on growing opportunities in the offshore oil & gas and wind sectors.
New Build & Ship Conversion Supervision:
The company offers expertise in the design, construction, and delivery of various types of vessels, indicating a capability to develop and implement new ship designs and modifications. They have been involved in building complex projects like DP-2 Offshore Supply Vessels, Workboats, and Harbour Crafts, and undertake offshore ship conversion work, including feasibility studies and advanced design work.
Efficient Shipboard Systems:
The company highlights the use of advanced propulsion systems and energy-efficient technologies in its offshore vessels, demonstrating a focus on incorporating the latest innovations to enhance performance and reduce environmental impact.
Strategic Focus:
The company’s strategic focus on high-growth segments within the Indian shipping industry, such as offshore energy and port services, positions it well to capitalize on the anticipated industry expansion.
Effective Risk Management:
The company’s ability to manage its risks effectively, including those related to fuel prices, regulatory changes, and competition.
Amber Box
Working Capital Requirements:
The company’s operations require substantial working capital, which could strain its financial resources, especially during periods of growth or economic downturns.
Global Outlook:
The IMF’s World Economic Outlook, July 2023, projects that global trade growth will rebound from a decline in 2023 to grow at 3.7% in 2024.
Extensive and Evolving Regulations:
The maritime industry is subject to a complex web of national and international laws, treaties, and agreements. These regulations encompass various aspects, including vessel management, safety protocols, environmental protection, and pollution prevention.
Cabotage Laws: While the company currently benefits from India’s cabotage laws, which favour Indian-flagged vessels for coastal trade, any changes to these laws could disrupt its business model and competitive advantage. The company’s reliance on the Indian market makes it particularly vulnerable to any adverse changes in cabotage regulations.
Red Box
Dependence on a Few Clients:
A significant portion of the company’s revenue is generated from a limited number of key clients. This dependence on a few clients could make the company vulnerable if it were to lose business from any of them. One major contract with the Ministry of Earth and Science (MOES) contributes 23.50% of the Revenue.
Dependence on the Secondary Market for Vessel Acquisition:
The company relies on the secondary market to acquire vessels, which can be subject to price fluctuations and limited availability.
Debt Ratios:
Debt-to-Equity Ratio: 0.39 The company has a manageable level of debt compared to its equity
Debt Service Coverage Ratio (DSCR) of 0.24, however, raises some concerns. A DSCR below 1 indicates that the company’s operating income is not sufficient to cover its debt obligations.
Industry Cyclicality and Volatility:
The shipping industry is inherently cyclical and subject to various external factors, such as fluctuations in global trade, commodity prices, and geopolitical events. These factors can lead to volatility in the company’s revenue and profitability.
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- For Porter’s Five Forces, the force value of “LOW” is considered good. ↩︎
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