Medium-term EBITDA margin profile — sustained or improving? PBT 12-15% guidance vs 26-27% reported — should we work with current level?
Margins/profitability expected to significantly improve as P-75 additional and P-75(I) sign — order book scales from Rs.32,000 crore to >Rs.1.25 lakh crore. Economies of scale + Shipyard 4.0 + digital transformation drive margin uplift. However, worldwide shipbuilding margins are ~15%; high recent margins reflect Project 15 Bravo final-stage revenue recognition + good initial margin. Q4 PBT was 12.8% due to provisions. Prudent to guide ~15%; expect increase but not the 26% blended.
US Navy MSRA — commercial contribution near term?
MDL is a contender; many US vessels are too large for MDL infrastructure (draft limitation). Some smaller offers couldn't be participated in. Limited near-term contribution.
Revenue growth — can 20%+ continue or temporary slowdown as P-75/P-75I take time to ramp?
20% growth was on a steady order book; P-75 and P-75(I) delays mean design/finalization lag. 8-10% annual growth is more reasonable expectation.
Goa Shipyard listing plans? Cash on books?
Goa Shipyard listing decision rests with DIPAM/MOD (government holds 51%, MDL 47%). Cash ~Rs.11,000-12,000 crore: Rs.6,000 crore margin, balance advances.
Capacity increase next 3-4 years? Capex debt? Ship repair plans? Global shipbuilding super cycle benefit?
Capacity already augmented from 6 to 11 submarines (SSA workshop set up). Land taken from port for small ships; major capex Rs.4,000 crore at Nhava yard. Currently 10 major warships + 11 submarines simultaneous capacity. Biju George: Capacity will at least 2x once both capex programs operational. Ruchir Agrawal: No debt expected currently — healthy balance sheet. Ship repair: vertical exists (wet basin + dry dock); will scale post capex; submarine repairs (MRLC + AIP plugs) ~Rs.4,000 crore revenue contribution. Capt. Jagmohan: Significant tailwinds from geopolitics — Navy RFPs upcoming: 17 Bravo (~Rs.70,000 crore) and MCMV (~Rs.44,000 crore at AON stage).
2 lakh-2.5 lakh crore order in 18-24 months possible? P-75 additional timing?
Depends on P-75 additional + P-75(I) (Rs.1 lakh crore); winning 17 Bravo + MCMV could theoretically reach those levels. Confident on P-75 additional submarines signing quickly — possibly next month, commercial negotiations done, at contract-signing stage.
Submarine contract expected value? Order book Rs.1.25 lakh crore confirmation? Nuclear or conventional? Provisions detail and recurrence? Order book mix? Nuclear submarine prospects?
P-75 additional submarines: Rs.30,000-40,000 crore range. Order book Rs.1.25 lakh crore by FY26 contingent on signing P-75 additional + P-75(I). Conventional, not nuclear. Ruchir Agrawal: Rs.532 crore provision for FPV Coast Guard + Denmark MPV contract (out of total Rs.746 crore; balance normal); reviewed quarterly with possible reversal/increase. Bid in 2022-23 — material/component prices spiked due to global shipbuilding boom. Order book Rs.32,260 crore: ~Rs.20,000 crore higher-margin (15B, 17A, P-75 Kalvari); two-thirds reasonable margin. Nuclear submarines done at Vizag SBC, not MDL — MDL doesn't comment.
Subcontracting charges spiked — what is this and is the trend persistent?
Subcontracting = work done within MDL premises by third parties; outsourcing = work done at remote locations. With 27 ships simultaneously, some work moves outside (transportation cost adds). Costlier than in-house. Capt. Jagmohan: For larger/high-value ships (15B, 17A) MDL uses own manpower; smaller ships (export, 21 Coast Guard) better via subcontract. Hence elevated subcontracting costs.
Next-Gen Corvette order — are we active?
Bids opened — went to GRSE and GSL, not MDL.
Subcontracting expense — fixed or reversible?
It's a fixed expenditure.
Revenue contribution from P-75 additional + P-75I in FY27/FY28? P-17A pending Rs.13,493 crore execution? P-15B Rs.3,716 crore + P-75 Rs.2,700 crore residual breakdown? Coast Guard + Denmark order value?
FY28: P-75 additional revenue should kick in (~10% of contract value). FY26 — confidently 10%+ growth. P-17A: 4 ships — 1 delivered, 2nd next month, 3rd in November, 4th by April '26; guarantee liabilities till 2027; bulk of Rs.13,493 crore booked FY26-FY27. P-15B Rs.3,716 crore — guarantee liabilities + B&D spares delivery to Navy (significant). Coast Guard + Denmark together ~Rs.3,500 crore, delivery up to FY29-30.
P-75(I) stage? Scorpene additional delay reason? P-17A higher-than-15% margin given 2 deliveries in FY26?
P-75(I): technical offer accepted; commercial negotiations early phase; awaiting next round. Scorpene additional: procedural delays at MOD/government level; expect to conclude shortly. P-17A: hope to do better than 15%, but prudent to guide 15%.
Fixed-price contracts — raw material escalation?
Shipyard procures all raw material; cost is part of project cost. Supplier negotiations done early; deliveries staggered to control inventory. Raw material cost largely locked in upfront.
Compensation for delayed contract signing? Diversification beyond MOD?
Diversification ongoing: ONGC offshore order book ~Rs.6,500 crore; commercial Denmark MPV ~Rs.715 crore. Biju George: No additional compensation if contract signing is delayed.
Other expenses elevated — reason? Order book delivery timelines? FY26 turnover targets with MOD? Kalvari LD reversal pending? Was anything booked in Q4? D448 cost benefit on early deliveries?
Other expenses likely reflect 27 ships at early-stage procurement + 17A B&D spares (~15% of project cost). Order book timing: 15B balance Rs.3,700 crore by FY27-28; stealth frigates by FY29; Coast Guard + MPV by FY29-30; P-75 Kalvari Rs.2,400 crore mostly FY26 + early FY27; MRLC by mid-FY27; ONGC by end-FY27; AIP delayed (DRDO inputs); ~Rs.24,000 crore of Rs.32,000 crore book invoiced over next 2 years. MOD turnover targets discussed but not public yet. Kalvari LDs: reversed on 4 submarines; first boat still pending — expect reversal this FY (MOD decision). Q4 had no LD booking. D448 benefit: all four 15B destroyers delivered ahead of schedule, shipyard has benefited.
Korean shipyard tie-up plans? Master Ship Agreement US business? Export potential? ThyssenKrupp making India a hub?
Ministry of Shipping promoting domestic shipbuilding — 4 large clusters by 2030, operational by 2035; encouraging tie-ups with global majors. MDL in early evaluation; keeping options open. Biju George: US Navy fleet (Singapore-based) mostly large vessels — small subset suits MDL infrastructure. Export: Denmark MPV order Rs.715 crore for 6 vessels with optional 4 more; potential for cargo ships at MDL infrastructure. ThyssenKrupp collaboration for P-75(I): >60% indigenization (much higher than Scorpene). MDL benefits in design/construction know-how + maintenance + global export-construction (TKMS plans MDL for Asia/South America export orders) — two-fold benefit.