Mazagon Dock Shipbuilders: In the dynamic world of defense stocks, the spotlight is on Mazagon Dock Shipbuilders (MDSL), a company that has seen remarkable growth amidst rising geopolitical tensions.

With the Indian government’s push for self-reliance in defense through initiatives like ‘Make in India,’ the defense sector has witnessed increased market interest, with Mazagon Dock emerging as a standout performer.

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Over the past three years, Mazagon Dock’s stock has surged, reaching a 52-week high at Rs 2,484.70 on 27th December 2023. The journey toward self-reliance in the defense sector gained momentum as the government aimed to reduce arms imports, a crucial step in achieving greater independence. Mazagon Dock’s stellar performance is a testament to its strategic positioning in this evolving landscape.

The Journey of India in Becoming Self-reliant in the Defence Sector

In recent times, India has been focusing on boosting its self-reliance in response to rising global tensions. The government has launched several initiatives to reduce the country’s dependency on imports, particularly in the defense sector. A notable step has been taken to decrease the import of arms, a significant aspect of India’s reliance on foreign goods.

According to the Minister of State of Defence, the procurement of arms from foreign countries was Rs 40,330.02 crores in 2019-20, Rs 43,916.37 crores in 2020-21, and 40,839.53 crores in 2021-22. Notably, the defense industry has witnessed a remarkable surge in exports, reaching an all-time high of nearly Rs 16,000 crores in 2022-23.

In a strategic move, the Government of India issued a list in 2022 placing items such as light tanks, helicopters, loitering munitions, and various missiles and ammunition under the ‘no import’ category. This decision is one among several measures aimed at curtailing the reliance on imported arms.

This shift towards self-reliance has had a positive impact on companies like Mazagon Dock shipbuilders, drawing attention from both domestic and foreign markets. The company has experienced a significant uptick in orders, reflecting the success of India’s endeavors to bolster its indigenous defence capabilities.

Let’s see how the company has been sailing in the market so far.

Mazagon Dock Shipbuilders – Business Overview

Mazagon Dock Shipbuilders holds a unique position as the sole company in India specializing in building conventional submarines and destroyers for the Indian Navy. 

Its journey, beginning as a dry dock in Mumbai, has evolved into a leading shipbuilding yard with a rich history dating back to 1934. Nationalized in the 1960s, Mazagon Dock has played a pivotal role in shaping India’s defense capabilities.

The company’s offerings span a diverse range, from naval ships and submarines to ferries and cargo vessels. With an extensive library of designs catering to both domestic and international clients, Mazagon Dock has constructed 801 vessels since 1960, including warships, destroyers, missile boats, and submarines

The company currently has a large library of designs for a variety of items for both domestic and foreign customers. MDL has constructed 801 vessels since 1960, including 27 warships, advanced destroyers, missile boats, and 7 submarines. 

Financial Landscape & Independence

Examining Mazagon Dock’s financial health provide insights into its ability to navigate the challenges posed by the defense sector’s unique dynamics. The Return on Equity (ROE) and Return on Capital Employed (ROCE) metrics are crucial indicators of financial performance.

As of the latest financial reports, Mazagon Dock’s ROE stands at 28.61%, showcasing an increase of almost 52.21% from the previous year which was 18.80%. This upward trajectory signals efficient utilization of equity capital and reflects positively on the company’s profitability.

Similarly, the ROCE has witnessed notable growth, reaching 34.37%. This metric indicates the company’s ability to generate profits from its capital employed, and the consistent increase is indicative of effective capital allocation and operational efficiency.

The company’s revenue from operations stood at Rs. 7,827 crores in 2023, an increase of 36.52% from Rs 5733.28 crores in 2022. The net profit of the company also saw a significant increase of 83% from Rs. 1,073 crores in 2023, as compared to Rs 586.47 crores in 2022. 

The net profit ratio of the company stood at 13.71% in 2023 as compared to 10.23% in 2022.

Order Book and Recent Developments

Let’s have a look at Mazagon Dock’s order book as of the first quarter of 2023-24:

      Particulars Project Value(INR Cr)Nos. (Contracted)Unexecuted Order Value (INR Cr)
P15B Destroyers 32,083414,713 
P17A Stealth Frigates24,264 417,843
Submarine and heavy engineering
P75 Kalvari Submarines28,59064,006
Medium Refit and Life Certification3,60622,438
Total Order Book as of 30th June 202339,117

According to Commander Jasbir Singh, director of Submarine and heavy engineering in Mazagon Dock, the company’s order backlog stood at Rs 37,500 crore in the 2nd quarter of 2024. 

The company recently got two big orders, one from the ONGC, received on December 10, with a value of Rs 1,145 crore, and the other one from a European client for the construction of three units of 7,500 DWT Multi-Purpose Hybrid Powered Vessels on December 14, 2023, for a value of approx. Rs 350 crores. 

They received another order for the delivery of six Next Generation Offshore Patrol Vessels from the Acquisition wing of the Ministry of Defence for Construction on 20th December 2023. 

While these all look promising, the company still faces many challenges and risks.

Challenges and Risks

Mazagon Dock faces a number of challenges. The extended time required for product completion and payment receipt poses liquidity challenges. The company’s resilience in overcoming these challenges will play a pivotal role in sustaining its growth trajectory.

Moreover, the significant reliance on government orders introduces a level of vulnerability. The cancellation or delay of government contracts could impact Mazagon Dock’s revenue stream. It is imperative for the company to explore avenues for business diversification and private-sector collaborations.

The company might consider diversifying into other businesses like ship repair to reduce this time gap – and any delays in such expansion might cause financial troubles to the company

Future Prospects and Strategic Initiatives

Despite the challenges, Mazagon Dock’s strategic initiatives and recent developments position it favourably for future growth. The company’s focus on technological advancements, collaborations with international clients, and entry into new product categories are indicative of a proactive approach to staying ahead in a competitive market.

The recent orders from ONGC and a European client for Multi-Purpose Hybrid Powered Vessels demonstrate Mazagon Dock expanding its global footprint. Collaborations with international entities not only contribute to revenue diversification but also enhance the company’s technological capabilities.

The company aims to broaden its portfolio by venturing into the development of underwater equipment, marine platforms, heavy engineering machinery, and offshore platforms. This strategic move is geared towards expanding its capabilities and establishing a stronghold in areas beyond traditional shipbuilding.

With a forward-looking approach, Mazagon Dock is intensifying its focus on ship repair activities. By restarting refit and repair services for warships and submarines, the company aims to enhance its client base, generate additional revenues, and reduce reliance on Ministry of Defence (MoD) contracts. Furthermore, there are plans to venture into commercial ship refits in the near future, presenting a promising avenue for growth and sustainability.

In line with global aspirations, Mazagon Dock is eyeing international markets through an enhanced focus on exports. Despite the challenges posed by a highly competitive market, the company is making dedicated efforts to establish a presence on the global stage. This strategic initiative aligns with the broader vision of the company to broaden its footprint and diversify revenue streams.


In conclusion, Mazagon Dock Shipbuilders stands as a robust player in India’s defense sector, navigating challenges and leveraging opportunities for sustained growth. The stock’s impressive performance, coupled with a strategic approach to address inherent challenges, positions Mazagon Dock as a key contributor to India’s defense preparedness.

Written By Akshita Maloo

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