Sanjeev Singhal, Director-Finance, Mazagon Dock Shipbuilders (MDL), said currently their orderbook is approximately Rs 48,000 crore and the entire order book is primarily Navy nominated.

The orderbook comprises the P15 Bravo project, which consists of four destroyers, and project 17 Alpha, consisting of seven frigates. Of these, MDL is constructing four and Garden Reach Shipbuilders and Engineers Limited (GRSE) is constructing three. "So, MDL is the lead shipyard," he added.

“As far as MDL is concerned there are four ships under project 17 Alpha. In addition, there is an order for six submarines, of which we have already delivered four. The balance two submarines are left to be delivered. Therefore, the major chunk of the order book is from the shipbuilding division. With respect to submarine, we are awaiting the major order under project P75 India," said Singhal, adding that margins from these orders would be around 7.5-8 percent. There would not be any significant change in the margins.

There are two components in the contract - the fixed price component, and the variable price component. The fixed price component takes into account exchange rate variations on imports, which then become a pass-through. The variable component takes into account any increase in cost, which then becomes a direct pass-through.

The consolidated year-on-year (YoY) revenue in Q2 was up 42.9 percent at Rs 1,570 crore versus Rs 1,099 crore and EBITDA was up 18.5 percent at Rs 85.2 crore versus Rs 71.9 crore. However, consolidated YoY EBITDA margin was down 5.4 percent compared to 6.5 percent.

“We are able to contain our costs or manage the costs well for the fixed price component because major orders and major procurements are finalised in the initial stages of the project itself, although the total execution of the project is of a long duration. But orders are finalised in the early stages. So that way, we don't have a significant impact with respect to price increase or cost increase,” he said.

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(Edited by : Thomas Abraham)