P-75 add-on (3 submarines) — status of cost benchmarking and timeline?
Costing committee approval is internal to the Ministry — MDL has no official intimation. Could happen anytime; not yet completed.
P-75I final decision timeline? TKMS demonstrated working AIP — better than competitors?
MDL-TKMS evaluations completed successfully. No comment on competitors or timelines — not privy to that information.
Did margin expansion benefit (cost coming under budget) repeat in Q2 and is it expected in H2?
Two deliveries planned this year. Once deliveries are done, can take stock. Margin levers (LD reversals, ahead-of-schedule deliveries, cost revisions) suggest H1-like margins potentially sustainable.
Any reversal of liquidated damages this quarter? When is the reversal expected (next quarter)? Total quantum?
No LD reversal in Q2. Two requests for submarine 1 and submarine 5 are under evaluation by Ministry/Navy. Hopeful at least one settles in Q3. Maximum quantum ~Rs.300 crore depending on what is attributed to MDL.
Delivery schedule of destroyers, frigates, and submarines for FY25, FY26, and FY27?
P-75 Scorpene: 5 delivered, 6th targeted by 31st December (slipped from October). Project-15 Bravo: 3 of 4 destroyers delivered; 4th targeted by 31st December. Project-17 Alpha: first ship targeted by 31st December. Remaining three 17 Alpha frigates to be delivered in FY26 and FY27.
Order pipeline over next 2-3 years and rough order sizes?
Biju George: Next-Gen Corvette quoted; Next-Gen destroyers in early stages (not yet AON); 17 Bravo possible (repeat of 17A). Vasudev Puranik: 3 additional Scorpene submarines (nominated; AON value Rs.27,000 crore from 2018), P-75I in competition with TKMS (qualified, awaiting government direction), AIP plug retrofits on Scorpenes, possible refits of Scorpene program. Sanjeev Singhal on size: existing 4-destroyer order from 2011 was Rs.34,000 crore; existing 17A 4-frigate order from 2015 was Rs.27,000 crore (MDL portion) — next-gen versions would be larger and more expensive.
Will there be a revenue dip during the gap between current and new large orders?
Biju George: Three Indian Coast Guard orders + one export order = 31 ships executing simultaneously, plus ONGC offshore projects. Sanjeev Singhal: ICG, export and ONGC orders are fillers during the large-order gestation gap. Vasudev Puranik: There may be a small dip but not big.
Capex plans — what capacity will be added and what kinds of vessels?
Two major capex initiatives. (1) 15 acres adjacent to existing yard — graving dry dock ~180m x 60m for shipbuilding cum ship repair. (2) ~40 acres near Nhava Sheva/JNPT — graving dry dock and hard stands for very large vessels. 4-5 years to operationalize (environmental clearance + civil works). Hard stands can take ~8 vessels simultaneously. Sanjeev Singhal: Existing yard handles 11 submarines + 10 warships. Capex doubles capacity in numbers and enables much larger vessels.
Trailing 12-month margins are high — sustainable over next couple of years? PBT or EBITDA basis?
Normalized industry PBT margin is 12-15% (including other income). Primarily focused on PBT, not EBITDA.
Capacity expansion implies more orders coming beyond outlined ones — non-defense growth plans?
Yes — exports, commercial, and repairs of large vessels (cannot be undertaken now). Biju George: Four segments — domestic defense, domestic commercial, export defense, export commercial; both new build and repairs. Currently commercial capacity nearly full; new capex (4-5 years out) enables captive commercial capacity. Active discussion with non-defense clients pending capacity availability.
H1 operating cash flow turned negative ~Rs.180 crore vs +Rs.300 crore last year — explain?
Non-consequential. By year-end debtors won't go up — these will even out. Significant cash balance available. Naval orders may have intermittent payment delays.
Out of 21-platform capacity, how many are being executed currently?
Currently executing 6 large platforms plus smaller vessels. Biju George: 21 ICG vessels, 10 vessels, and 6 export vessels.
Goa Shipyard has strong order growth — does associate income grow proportionately?
MDL not in management of Goa Shipyard; receives dividend. Consolidated accounts include share of profits — yes, Goa performance impacts consolidated.
AIP retrofit RFP timing? Mid-life refit value with AIP?
AIP RFP issued; budget allocated. Navy intends to introduce AIP during first refit of first submarine in 2025; if not, second submarine. Refit value with AIP ~30-35% higher than normal refit. Total refit + AIP ~55-60% of original order value (rough/dynamic estimate).
Commercial shipbuilding under green/hybrid policy push — material opportunity for MDL?
Denmark order is hybrid; green shipping market alive in Europe. 30% government incentive for fully green vessels going forward. If profitable, MDL will participate. Sanjeev Singhal: Not all clients give the better pricing peers may be seeing.
PBT 12-15% guidance vs 26% (FY24) and 32% (H1FY25) — how to reconcile? After settlements/provision reversals?
Normal project margin 12-15%. Current high margins reflect completion of projects at lower-than-envisaged costs (efficiencies, learning curve, process improvements). Customer factors these into future negotiations. Two deliveries pending — final cost picture clarifies after delivery and D448 liabilities are quantified.
3 additional submarines — execution timeline and revenue booking pattern?
First submarine 6 years; subsequent ones one per year — total ~8-9 years. Revenue follows S-curve: slow start, steep middle, tapering end.
P-75I — does the order go to a single bidder or split?
Whoever wins gets the complete order for all six submarines.
TKMS financial concerns and frigate delivery — second one possible this year?
Not aware of TKMS financial concerns; collaboration fully on track. Second frigate doubtful for FY25 — may spill into FY26.
Revenue recognition — percentage completion or delivery-based? Cutoff before profit recognition?
Percentage completion. Profit recognized from beginning based on estimated cost of completion. Used across all new build programs (long gestation); only small repair projects differ.
Are the three deliveries (by 31 Dec) ahead of or per schedule?
Submarine: as per schedule. 15 Bravo destroyer: ~2 months ahead of schedule if delivered before 31 Dec. 17 Alpha: slight delay (beyond control); will request Navy for time extension.
What % of revenue already realized for the three pending deliveries? Other quarter-related expenses?
Post-delivery there are warranties, B&D spares procurement, dry-docking inspection during guarantee period — full revenue not exhausted at delivery. Sanjeev Singhal: On cost factors — these are factored into negotiated value with customer. No specific quarterly expense pattern by design.
Are government incentive schemes beneficial? Have we received any?
Incentives not applicable to platforms with weapons (combat platforms = MDL's main business). Commercial ships — order value is small; assistance only on successful completion within 3 years. No material impact on top or bottom line currently.
Are H2 margins similar to H1 or in 12-15% range?
H2 similar to H1 — no significant change for current projects. 12-15% applies to new projects. Project mix changes next year (only 17 Alpha being executed) — margins can differ.
Cash split (free cash vs advances) and revenue outlook for FY25?
Top-line growth ~10-12% over last year. Own cash ~Rs.4,000 crore; balance is Indian Navy advances. Capex plan ~Rs.5,000 crore over next couple of years — utilizing cash for capacity enhancement; no special dividend/bonus indicated.
ONGC Rs.6,000-7,000 crore order timeline and margin?
Two-year execution. ~Rs.3,000 crore/year over FY25-26. Sanjeev Singhal: Margin depends on mix; ~10-12%.
Confirm: destroyer ahead, frigate delayed? Are margin levers enough to sustain H1 margins?
Destroyer ahead of schedule. Between LDs, ahead-of-schedule deliveries, and cost revisions, sustaining H1 margins is plausible — 'perhaps yes'.
Why has procurement-base/deferred spare cost gone up this quarter?
Costs booked on consumption basis only. Most equipment for projects already procured, so limited price-fluctuation impact.
How is the company's cash deployed and at what tenure?
Currently in fixed deposits — liquid, maximum 1-year maturity.