MAZDOCK - Mazagon Dock Shipbuilders Limited Share Price

In the Q2 FY26 Earnings Conference Call, management provided a positive outlook for Mazagon Dock Shipbuilders. The company anticipates a revenue of approximately INR 12,500 crores for the current fiscal year, with an expected growth of about 5% in the following year. Management expressed confidence that as submarine projects commence, there will be a significant improvement in both revenue and profits.

Key forward-looking points include:

1. Order Book: The order book currently stands at around INR 27,415 crores, with expectations to exceed INR 100,000 crores by FY27. Management is optimistic about securing additional orders as negotiations for the three Scorpene submarines (P75) and the P75I project progress.

2. Submarine Projects: Completion of commercial negotiations for the three additional Scorpene submarines is anticipated soon, with contracts expected to be signed within the financial year. For the P75I project, management expects to complete negotiations by the end of this calendar year.

3. Landing Platform Dock (LPD): Management has signed an exclusive MoU with Swan Shipyard for bidding on the LPD project worth approximately INR 40,000 crores. This partnership aims to leverage both entities' capabilities in project management and infrastructure.

4. Financial Capacity: The net worth of the company stands at INR 8,083 crores for standalone and INR 8,910 crores on a consolidated basis. Earnings per share are reported to be INR 17.73 for standalone and INR 18.58 on a consolidated basis.

5. Future Capex Plans: Management plans a capex of INR 500 crores for the current year, focusing on projects such as floating docks, and anticipates an investment of around INR 5,000 crores for setting up a greenfield shipyard in Tuticorin over the next five years.

6. Margins: Management projects stable operational margins around 15%, with potential higher margins due to efficiency in handling familiar submarine and destroyer projects.

Overall, the management's outlook is optimistic, spurred by upcoming contracts, strategic partnerships, and ongoing projects.

Key Questions and Responses from Mazagon Dock Shipbuilders Limited Q2 FY '26 Earnings Call

1. Atul Tiwari (J.P. Morgan): Status of P75 Scorpene Submarine Order?

   • Answer: Yes, we completed commercial negotiations for the additional submarines a few months ago. The project is currently awaiting sanction. We remain hopeful about signing the contract for the three additional Scorpene Submarines in the coming months.

2. Krishna Doshi (Ashika Institutional Equities): Revenue Guidance?

   • Answer: We anticipate achieving revenues of approximately INR 12,500 crores this year, with a potential growth of about 5% in the following year. Revenue improvements are expected as submarine projects commence.

3. Nehal Mehta (Subhkam Ventures): Margin and Revenue Growth Outlook?

   • Answer: The P17A project will continue to contribute revenue and profit margins in the next financial year. If we can sign submarine contracts swiftly, we expect higher margins due to familiarity and efficiencies in those projects.

4. Rupam Jaiswal (Investwell): New Partnership with Swan Defense?

   • Answer: Our MoU is exclusive to the LPD project. This collaboration may extend to other commercial ships in the future, leveraging Swan's infrastructure and our design and project management expertise.

5. Anupam Goswami (SUD Life): Negative Operating Cash Flow?

   • Answer: The negative cash flow is due to utilizing flexi amounts received from the Navy last year. Despite this, our margins remain intact, and improved performance is expected in the coming quarters.

6. Atul Tiwari (J.P. Morgan): Colombo Dockyard Acquisition Status?

   • Answer: The acquisition is not yet complete. We expect final approvals by the end of this week, with control anticipated by next month. Post-acquisition, we plan to enhance their management and execution capabilities.

7. Sanjeev Zarbade (Antique Stock Broking): Status of ONGC Order?

   • Answer: The ONGC contract execution will largely occur between mid-October to mid-May. Some progress will carry over to the next season, likely by October 2026.

8. Dipen Vakil (Phillip Capital): Capex Plans and Tuticorin Yard?

   • Answer: We're targeting a total capex of INR 500 crores this fiscal primarily for a new floating dock. Over the next 4-5 years, we aim for INR 5,000 crores for a greenfield shipyard in Tuticorin focusing on commercial shipbuilding.

9. Rakesh Roy: Revenue Mix for Future?

   • Answer: Presently, 80-90% of our order book comes from the Navy. We aim to diversify into offshore and commercial shipbuilding. Our intention is to have a healthy mix to mitigate dependence on a single customer.

10. Anirudh Murarka (Continental): Enhancing Shareholder Value?

    • Answer: Our strategy to enhance shareholder value includes obtaining more orders and executing them efficiently, which will contribute positively to our earnings and, ultimately, shareholder returns.

The responses are concise, maintaining clarity while addressing the core concerns and providing specific forward guidance.