- 11 Dec 2023
- ICICI Securities
Mazagon Dock receives Rs 1145 crore order from ONGC
MAZDOCK - 4241 Change: 3.05 (0.07 %)News: Mazagon Dock Shipbuilders has received an order worth Rs 1145.10 crore from Oil and Natural Gas Corporation Limited (ONGC).The contract is for Part Replacement of Pipeline Project (PRPP) laying approx. 44.4 kms of subsea pipelines in 19 segments. The contract is to be executed by May 2024.
Views: Though defence shipbuilding has been the core area for Mazagon Dock, the company was looking for venturing into energy and other civil contracts. As this new contract received from ONGC is on a turnkey basis, margins are expected to be relatively lesser than the existing contracts. With this contract, the order book is estimated to be at ~Rs 37000 crore (4.7x TTM revenues), giving healthy revenue visibility over FY24-26E. Going ahead, timely placement of the large orders in defence shipbuilding (like new destroyers, frigates & corvettes), ship-repair and submarines (P-75I and additional three kalvari class submarines) segments would be the key developments to watch out for in coming period.
Impact: Positive