Mazagon Dock signs letter of intent with European client for 10 hybrid power vessels

MUMBAI : State-run Mazagon Dock Shipbuilders Ltd (MDL)  said it has signed a letter of intent (LoI) with a European client. The LoI outlines plans for the construction of six firm units and four optional units of 7,500 DWT multi-purpose hybrid power vessels.

The prices of these vessels will be finalised at the time of signing the official contract, according to a stock exchange filing.

As of the June quarter, the government still holds over 84% stake in the shipbuilding company. Based on the current market price, the excess government stake in the company is valued at nearly ₹4,000 crore.

Recently, the state-run shipbuilder raised its revenue growth guidance for the financial year 2024. The company now expects revenue growth of 12-15% for the current financial year, compared to the 10-12% it guided for earlier.

The company’s Chairman and Managing Director Mr. Sanjeev Singhal said the current order book stands at ₹39,000 crore as of June 30 and that this order book will continue for the next 4-5 years.

The company’s order book has been declining over the last five years, starting from over ₹55,000 crore in financial year 2019 to ₹39,000 crore currently.

Mazagon Dock had recently signed a master ship repair agreement with the US government. The non-financial agreement is expected to open up voyage repairs of US Navy Ships at Mazagon Dock.

Singhal further told CNBC-TV18 that the current capacity utilisation is at 10 submarines and 11 warships simultaneously and that there are requirements in the Indian Navy.

Singhal is also anticipating potential revenue opportunities worth ₹2.5 lakh crore from the next general vessel. The total quantum includes next-generation destroyers 17 Bravo, submarines, corvettes, patrol vessels, and some smaller vessels.