Mazdock Jun-24

Mazagon Dock Shipbuilders Limited (MDL) is currently in discussions to secure an order for three additional submarines from the Indian Navy.

MDL has submitted pricing for the additional submarines, but the final order and value are still under discussion.

MDL is also pursuing orders for the next generation of destroyers and follow-on frigates under Project 17 Bravo.

The Indian Navy's Project 75I, involving six submarines, is already in progress and has an estimated cost of INR 43,000 crores as published in 2018.

MDL has an existing order for four destroyers worth approximately INR 34,000 crores, placed in 2011.

The total order book value for the potential new orders, including submarines, destroyers, and frigates, is not yet finalized and subject to negotiation.

MDL's revenue is expected to peak in FY25, likely as a result of ongoing and potential future orders.

MDL's future revenue is dependent on the successful completion of the ongoing and potential future orders, influenced by geopolitical factors.

The order is still being discussed and is expected to be finalized soon.

A project worth INR 1142 crores is currently under execution. It was received in December of the previous year.

The first ONGC order is currently under execution and is expected to be completed and paid for within the current fiscal year.

The company has a large amount of cash on hand, exceeding INR 15,000 crores.

The company plans to utilize the large cash reserves strategically for growth and expansion.

The company is the second defense company in India to have cash reserves exceeding INR 14,000 crores.

Investing in capital expenditures, research and development, acquisitions, or debt reduction are potential ways to utilize the cash reserves.

The company's strategic plans will take into account factors like market opportunities, industry trends, and financial goals.

The average value of a set of data.

A type of ship used for transporting bulk cargo, often large and carrying heavy loads.

A major repair agreement between a company and the US Navy, indicating potential for ship repair work.

Facilities that handle ship building and ship repair, often with specialized infrastructure.

Expanding capabilities to accommodate larger vessels, often with increased capacity and infrastructure.

A process of examining and fixing damaged or worn-out parts of a vessel.

A class of warships designed to carry and launch missiles, often used for offensive operations.

A set of financial documents that show a company's financial performance and position.

The time it takes to build a submarine, typically 5 to 7 years.

The amount of money spent on new equipment and infrastructure. Mazagon Dock Shipbuilders is investing INR 2,500 to 3,000 crores over 3-4 years.

The process of making the submarine's components in India, instead of importing them. This contributes to a stronger local economy.

The process of building a submarine based on a previous design. This speeds up the production process, as many parts are already familiar.

The process of building a submarine that is completely new or has significant changes to the design. This will take longer than a repeat submarine.

The potential for temporary drops in revenue due to the execution of the submarine. However, revenue will increase once the submarine project is finalized.

The impact of changing the design of a submarine. Changes may require more time and resources.

Mazagon Dock's plan to develop a new yard on 15 acres of land, costing an additional INR 1,500 crores.

MDL estimates that repair work will contribute only a small percentage (5-7%) of their revenue, indicating a limited focus on this segment.

MDL has already submitted bids for the P-75I submarine project, currently being evaluated by the Indian Navy.

The Indian Navy is still in the planning stages for the next-generation destroyer (17 Bravo) and its tenders haven't been released yet.

MDL is considering the possibility of being nominated for the 17 Bravo project, suggesting a potential repeat order.

MDL's new capex investment is intended to accommodate larger vessels, potentially including aircraft carriers.

The Indian Navy's P-75I submarine project is in its evaluation stage, conducting field trials for different bids.

MDL successfully completed field evaluation trials for its P-75I submarine bid, signifying successful completion of a key stage.

To assess its capabilities, MDL is conducting a tender to evaluate the available land, sea area, and water depth.

A revised Request for Proposal (RFP) for Project 75I, involving six submarines, was issued by the Indian Navy with a proposed budget of INR 60,000 crores.

MDL is not aware of a revised RFP for Project 75I with a budget of INR 60,000 crores.

Liquidated damages for FY 24 for MDL is estimated to be around INR 300 crores, indicating a potential penalty for delays in project delivery.

Liquidated damages for FY24 are approximately INR 150 crores per ship, based on an estimated 2 ships for which damages apply.

The Indian Navy is planning to acquire 43 frigates.

MDL is involved in building four frigates.

The cost of warranties and spares for frigates is estimated to be between 12% and 15% of the total project cost.

The cost of warrants and spares is calculated based on the total project cost, not just the current balance value.