Great Eastern Shipping has hit a new high today at Rs.394 with a 1.3 times spike up in volumes. Though slipped down from the high, it remains in the green, up over 2.5% at Rs.376 levels.

The stock is in the limelight today, reacting to its announcement which came in after market closure yesterday. The market is enthused because it announced signing a contract to sell a very large gas carrier, “Jag Vidhi”. The company goes on to give other details but no mention of financial, as to how much this deal will bring in.

This vessel, built in 1990 has a deadweight tonnage (dwt) of about 49,701 and is to be delivered to the buyers in second half of year ending 31 March 2015. Excluding Jag Vidhi, the company's fleet stands at 28 vessels, comprising 20 tankers and 8 dry bulk carriers with an average age of 9.5 years aggregating 2.32 millon dwt.

In Q4FY13, the company had shown a two fold jump in its consolidated net profit on account of a forex gain. This time around, for Q4FY14, the company had a forex loss of Rs.63 crore, higher depreciation and an impairment charge of Rs.8 crore. Net sales was very flat at Rs.794 crore, up just 5% (YoY).  Interest outgo for the quarter was also up from Rs.83 crore to Rs.95 crore. These factors together pushed down the consolidated net profit of the company for Q4, coming at Rs.69 crore, down 34% (YoY) and down 18% sequentially.  Net profit was shored up a bit on account of tight cost control, due to lower hire of chartered ships/equipment costs and repair charges. Operating cost was 56% of net sales, down from 64% in Q4FY13.

In terms of segment, this quarter saw an equitable distribution between shipping as well as offshore. At end of FY13, shipping contributed 65% to the topline and rest came from offshore. On the other hand, at end of this FY14 fiscal, this has become more equitable, with each segment contributing 50%. And in terms of performance, shipping showed a 19% drop in revenue and EBIT fell pretty sharply by 48%. Offhsore did better with a 7% rise in topline and 18% increase in EBIT. The company ended FY14 with a consolidated net profit at Rs.574 crore v/s Rs.538 crore in FY13, up 7% though its net revenue rose only 2% at Rs.3049 crore. Looking ahead, volumes and shipping freights remain low and it is estimated to show some perk up by end of current Q2.  In December 2013, Baltic dry Index was at an average of $2155 which fell to below $1,000 levels in the second half of April. Similarly, the rate for a very large crude carrier, which peaked to an average of $45,000 a day in December, has now slumped to below $15,000 levels.

This is India’s largest private sector shipping company. The company has two main business: shipping and offshore. The shipping business is involved in transportation of crude oil, petroleum products, gas and dry bulk commodities. The offshore business; services the oil companies in carrying out offshore exploration and production activities through its wholly owned subsidiary Greatship (India) Limited. The main promoter was Vijay Seth who created Great Offshore as a division of Great Eastern Shipping Co. but he lost control over the company after it was taken over by Bharati Shipyard. In 2009, when the value of shares he had pledged with financial institutions plunged below the value of the loans he had taken, there was no financial backing from his cousins and Bharati Shipyard bought the shares pledged by Sheth, 14.89% stake at Rs.315/share.  Bharati Shipyard currently owns a 49.73% stake in Great Offshore.