Analyst Concall
Mazagon Dock sees order book jumping to INR 1.25 trln
This story was originally published at 20:18 IST on 30 May 2025
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--Mazagon Dock: To complete orders worth INR 240 bln in two years
--Mazagon Dock: Hope to complete majority of ONGC projects by FY27
--Mazagon Dock: Size of order book from ONGC at INR 65 billion currently
--Mazagon Dock:Revenue accretion from P75 submarine deal may begin from FY28
--Mazagon Dock: See profit before tax margin of 15% over 2-3 yrs
--Mazagon Dock: See revenue growth of 8-10% over 2-3 years
--Mazagon Dock:Order book may jump to INR 1.25 tln after submarine contracts
--Mazagon Dock: May sign deal for P75 submarines as early as next month
--Mazagon Dock: Can build 10 major warships, 11 submarines at one time
--Mazagon Dock: Have over INR 110 bln as cash on books, INR 60 bln as margin
--Mazagon Dock: Current order book size at INR 320 billion
--CONTEXT: Comments by Mazagon Dock mgmt in post-earnings call with analysts
--Mazagon Dock: Expect to sign two P75 submarine contracts in FY26
By Ishaan Sharma and Sunil Raghu
MUMBAI/AHMEDABAD – Mazagon Dock Shipbuilders Ltd. expects its order book to jump more than three-and-a-half times to INR 1.25 trillion in the current financial year, after it signs contracts to make P75 and P75i submarines for the Indian Navy, company management said at a post-earnings analyst conference call Friday. The current order book of this shipbuilding and repairing company is currently at INR 320 billion, they said.
Mazagon Dock is collaborating with ThyssenKrupp Marine Services, which will transfer technology for building the submarines. Nearly 60% of these submarines would be indigenous, "much higher" than any other submarine made by them to date. Other than technology transfer, ThyssenKrupp has informed Mazagon Dock that they could also look at making submarines for which they get the orders from the Asian region at the Mazagon facilities.
"We have cleared the technical round and are in the initial stages of negotiating the commercial aspect. We hope to close the contract by as early as next month," the management said. They hope to see earnings from P75 submarines become revenue accretive from 2027-28 (Apr-Mar).
On the forthcoming project pipeline, other than the P75 submarines, Mazagon management said that the Indian Navy is also expected to invite bids for 17 Bravo frigates "shortly", which may be another INR 700 billion project. The Indian Navy is also coming up with another INR 440 billion project. Mazagon Dock management is hopeful of winning both the projects as and when they come up for bids.
The company's total order book includes orders for P15B destroyers, P17A stealth frigates, and P75 Kalvari class submarines. The management said the primary focus is on executing existing orders from the Indian Navy and Indian Coast Guard and was hopeful that the Indian Navy would decide on refitting its existing Scorpene submarines in the financial year 2025-26 (Apr-Mar), an order the company is eyeing.
Other than the defence segment, the company is also working to diversify into the commercial segment and has an order of nearly INR 650 billion in the offshore segment from state-owned Oil and Natural Gas Corp. Ltd. The company hopes to complete the majority of ONGC projects by FY27. It also has an order to build a multipurpose vessel worth INR 7.15 billion from a European client.
The company hopes to complete work on orders worth INR 240 billion in the coming two years. Other than shipbuilding, the company has taken up submarine repairs, which the management said has contributed nearly INR 40 billion in revenue.
The company said it has augmented capacity to make 11 submarines and 10 major warships, as it is preparing to take both the additional submarines P75 and P75i. It has already set up the facility of the submarine subsection assembly workshop. The company management said they have taken land from the port to take up work of small ships and plans to spend INR 40 billion in capital expenditure on this land and at Nava Yard.
Riding on the order book, the management expects revenue growth to be between 8-10% and profit before tax margins at around 15% over the coming two to three years. The company management said it has INR 110-120 billion as cash on its books, of which INR 60 billion is the margin.
The company reported a 51% on-year fall in its consolidated net profit for the March quarter at INR 3.25 billion on Thursday. Its consolidated top line for the quarter was INR 31.74 billion, up 2.3% on year. Shares of the company plunged 9% to hit an intraday low of INR 3,426.10 per share, ending a seven-day winning streak. Shares recovered a bit and closed 7.3% lower at INR 3,478.20 on the National Stock Exchange. End
Edited by Saji George Titus
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