Garware Offshore (GARWAOFFS) Q2 FY27's Q2 Loss Widens Despite 60% Revenue Jump
Garware Offshore Services reported a 60% year-on-year revenue increase in Q2 FY27, but a sharp rise in interest and depreciation costs pushed its net loss deeper.
Garware Offshore's September quarter revenue rose 60% to ₹10.79 crore, yet net loss widened to ₹3.71 crore. Higher interest and depreciation from a new vessel acquisition overwhelmed the top-line growth.
For Garware Offshore, a lean fleet of three vessels relies on long-term charters and a tight global supply of ships. The September quarter saw that strategy deliver a 60% jump in revenue, but the bottom line sank deeper into the red.
Revenue reached ₹10.79 crore, up from ₹6.74 crore a year ago. Yet the net loss widened to ₹3.71 crore, compared to a small profit of ₹0.18 crore in Q2 FY26. The net profit margin collapsed to -34.4%.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 10.79YoY +60% | 11.79 | 6.74 |
| Profit (₹ Cr) | -3.71YoY -2161% | -2.87 | 0.18 |
| Net Profit Margin (%) | -34.4YoY -1374% | -24.3 | 2.7 |
The costs that overwhelmed growth
Two fixed costs surged and consumed the revenue gain. Interest expense more than doubled year-on-year to ₹1.62 crore. Depreciation jumped 66% to ₹5.91 crore.
According to a report by StockScans, this stems from the June 2025 acquisition of the M.V. Mahanadi, an 80-ton anchor handling vessel. The purchase, financed with debt, brought higher loan-servicing costs and a fresh depreciation charge.
A long-term charter provides a silver lining
Despite the quarterly loss, the company secured a crucial four-year charter in June, as noted by Zerodha. This contract, with an annual value of about ₹31 crore, should provide stable future revenue once the vessel is deployed.
It aligns with the company's pivot to long-term contracts for cash flow visibility. A global supply drought in new vessel construction, per StockScans, supports firmer charter rates for its aging fleet.
The path to profitability
The new long-term contract is a step toward covering the elevated fixed costs. However, profitability hinges on finalizing charters for its other vessels and managing its debt.
The company's return on equity was -12% and its debt-to-equity ratio stood at 0.52. Until revenue from all three vessels consistently covers the higher interest and depreciation, losses are likely to persist.
Key Points
- Revenue grew 60% year-on-year to ₹10.79 crore, but net loss widened to ₹3.71 crore.
- Interest and depreciation costs surged due to the debt-funded acquisition of a new vessel in mid-2025.
- A recently secured four-year charter provides future revenue visibility but does not immediately offset current high fixed costs.
- The company's path to profitability depends on securing long-term contracts for its entire fleet.
Hexa Perspective
This quarter underscores the operational leverage—and risk—in Garware Offshore's model. Acquiring a vessel with debt immediately lifts revenue potential but also locks in substantial fixed costs. The widening loss shows revenue from the new asset isn't yet sufficient to cover those costs.
The four-year charter is a necessary counterweight, turning an asset into a revenue stream. The key question is how quickly the remaining fleet capacity can be contracted on similar terms. Until then, the math of high fixed costs against variable charter income will keep margins under severe pressure.
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