Mazagon Dock Achieves Navratna Status, Poised for Global Expansion
Mazagaon Dock has just been accorded the prestigious ‘Navaratna’ status. How would you explain your growth in recent years – in qualitative and quantitative terms?
Mazagon Dock Shipbuilders Limited (MDL) is a Defence Public Sector Undertaking shipyard under the administrative control of the ministry of defence (MoD). The oldest shipyard in India, MDL’s journey started with a small Dry Dock in 1774. It now celebrates 250 years of its establishment.
MDL is the largest shipyard in India in terms of revenues, order book and market capitalisation. It is the only shipyard in India with proven track record of building destroyers and conventional submarines for the Indian Navy. Recently, MDL has been upgraded to ‘Navratna’ status by the department of public enterprises on 25 June 2024.
The performance of the company in recent years has been encouraging. MDL has delivered six destroyers in the last nine years up to 2023, at an average delivery rate of 01 Destroyer every 18 months. The last destroyer was delivered five months ahead of schedule. Concurrently, MDL has also delivered five conventional submarines between 2017 and 2022.
MDL has been consistently in profits and has distributed dividend for more than 20 years. MDL has achieved its highest ever revenue from operations of Rs9,467 crore and profit after tax of Rs1,845 crore in 2023-24, with a y-o-y increment of 21 per cent and 72 per cent over 2022-23 respectively.
Do you think PSUs are better managed now and have more freedom in decision-making, which is a critical differentiator?
As a Navratna DPSU, Mazagon Dock Shipbuilders enjoys greater autonomy in decision-making, facilitating higher CAPEX without seeking the approval of the administrative ministry. It has also enabled MDL to form strategic partnerships/joint ventures and adopt modern management practices.
Do you think the government’s capital expenditure drive is playing a critical role in creating more opportunities for the PSUs?
The role of government spending in facilitating opportunities for PSUs is pivotal. A substantial allocation to defence in the government’s budget directly translates into increased demand for naval platforms and equipment. The increased demand results in defence shipyards being allocated a steady stream of orders ensuring their continued operation and pave the way for expansion. We see a consistent demand, both from the naval sector as well as the commercial sector.
How do you evaluate PSUs vis-à-vis private sector in terms of adoption of technology and aligning with sustainable development goals (SDGs)?
The performance of PSUs in terms of adoption of technology and aligning with SDGs has been at par with any other player in the industry. Considering the vast experience & talent pool available with PSUs in the Shipbuilding sector, PSUs can fully leverage any new technology quickly.
Do you believe that some Indian PSUs have the ability to make it big globally too over the next decade?
Certainly, especially with their focus on modernisation, innovation and strategic partnerships and emphasis on being Atmanirbhar. With the government of India initiatives to enhance competitiveness along with the research & development initiatives, the PSUs have the ability to leverage their vast resources and expertise to expand their global footprint and contribute significantly to India’s economic growth. Increasing role of India and Indian PSUs in the global defence ecosystem is already visible by way of phenomenal increase in defence exports. Positive steps in this regard have already been taken by MDL.
What would be the next frontier for MDL? What is that big picture you are pursuing as a company, which you would like to see emerge over the next decade?
MDL aims to bolster its position as a leading shipbuilding and offshore fabrication yard. Towards this, we are focussing on expanding our capabilities in constructing next-generation warships, advanced submarines, leveraging cutting-edge technology and innovation. Additionally, MDL seeks to strengthen its export market presence, targeting international customers with high quality shipbuilding solutions. By investing in advanced technologies, enhancing its workforce skills and fostering strategic partnerships, MDL is well-positioned to become a major player in the global shipbuilding industry.