Shares of State-run Mazagon Dock Shipbuilders Ltd. (MDL) saw a surge of up to 6% on Tuesday following the signing of 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 finalized at the time of signing the official contract. As of the June quarter, the government retains over 84% stake in MDL, valued at nearly ₹4,000 crore based on the current market price. The state-run shipbuilder has raised its revenue growth guidance for the financial year 2024, now expecting 12-15% growth compared to the previous guidance of 10-12%. The current order book stands at ₹39,000 crore as of June 30, expected to continue for the next 4-5 years.
MDL recently signed a master ship repair agreement with the US government, opening up voyage repairs of US Navy Ships. Chairman and Managing Director Sanjeev Singhal stated that the current capacity utilization is at 10 submarines and 11 warships simultaneously, with anticipated revenue opportunities of ₹2.5 lakh crore from the next general vessel.
This includes next-generation destroyers, submarines, corvettes, patrol vessels, and smaller vessels. The stock, which had ended lower on Monday due to the end of a three-year lock-in period, is currently trading 5.3% higher at ₹2,183.50.
