Shipping Corporation of India Limited (SCI) witnessed a sharp decline in its stock price, dropping by 7.3% to ₹177 during morning trade on February 10, 2025. Investors reacted negatively to the company’s Q3 financial performance, which fell short of expectations.
As the largest shipping enterprise under the Ministry of Ports, Shipping, and Waterways, SCI plays a critical role in India’s maritime industry, making its financial performance a key market indicator.
Net profit plummets 44% year-on-year
SCI reported a 44% drop in net profit, registering ₹75.5 crores compared to ₹134.4 crores in the same quarter last year. Revenue from operations also dipped by 2%, settling at ₹1,315.6 crores, down from ₹1,340.7 crores year-on-year. The decline in earnings raises concerns for investors looking to buy shares online, as weak financials could impact long-term growth potential.
EBITDA decline reflects margin pressure
Earnings before interest, tax, depreciation, and amortisation (EBITDA) fell by 14.3%, reaching ₹357.3 crores in Q3 compared to ₹416.9 crores in the previous fiscal period. The EBITDA margin also contracted to 27.2% from 31.1%, indicating rising operational costs and potential challenges in maintaining profitability. For traders exploring opportunities to buy shares online, SCI’s declining margins may signal caution.
Government boost for the shipbuilding industry
Despite the downturn in earnings, the government’s renewed focus on the shipbuilding sector brings optimism. The Union Budget 2025 introduced policies to revitalise the industry, including the reintroduction of the Shipbuilding Financial Assistance Policy and a ten-year exemption on basic customs duty for shipbuilding and shipbreaking companies.
Additionally, the maritime development fund, with a ₹25,000 crores corpus, aims to strengthen India’s presence in the global shipbuilding market. These measures could enhance SCI’s long-term prospects and influence investor decisions when they buy shares online.
Competitive landscape and global market share
India currently holds only 0.05% of the global shipbuilding market, significantly lagging behind industry leaders such as China (47%), South Korea (30%), and Japan (17%). The government’s push for shipbuilding clusters could help SCI and other domestic firms expand their capabilities. However, for short-term investors looking to buy shares online, the immediate impact on SCI’s stock performance remains uncertain.
Stock performance and financial indicators
At 10:45 AM, SCI shares were trading at ₹181.6, marking a 5.2% decline from the previous close on the NSE. The stock has depreciated by 13% since the beginning of the year. Analysts attribute this downturn to weak sales growth, a low return on equity (ROE) of 8.49%, and an increasing debtors' cycle from 70.9 to 102 days.
Despite trading at 1.14 times its book value, the company’s low dividend yield of 0.27% and contingent liabilities of ₹5,241 crores raise concerns for investors evaluating whether to buy shares online.
Should you consider SCI shares now?
Shipping Corporation of India Limited traded at ₹180 per share, down by 5.90% as of February 10, 2025, at 12:30 PM. Given SCI’s underwhelming Q3 results and ongoing operational challenges, short-term investors may remain cautious.
However, long-term prospects could improve with government support for the maritime sector. Market participants should assess risk factors carefully before deciding whether to buy shares online in SCI.
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