Defence Ministry Sign Deals Worth Rs 2,867 Crore With Mazagon Dock And Naval Group

The Defence Ministry on Monday signed two contracts worth Rs 2,867 crore with Mazagon Dock Shipbuilders Ltd. and Naval Group, France. The projects were signed in the presence of Defence Secretary Rajesh Kumar Singh in New Delhi.

The project signed with the Mazagon Dock Shipbuilders was worth Rs 1,990 crore, according to a press release on the PIB. The contract is for the construction of the Air Independent Propulsion Plug for the DRDO-AIP system and its integration onboard Indian submarines.

The AIP technology is being developed domestically by DRDO. The project, which focuses on the construction of the AIP-Plug and its integration, will significantly boost the endurance of conventional submarines and make a key contribution to the ‘Aatmanirbhar Bharat’ initiative. It is expected to create nearly three lakh man-days of employment.

The contract for the integration of the electronic heavyweight torpedo onboard the Kalvari-class submarines was signed with Naval Group. The project is worth Rs 877 crore.

The integration of the EHWT system will be a joint effort involving the Indian Navy, DRDO, and Naval Group of France. This collaboration will greatly enhance the firepower capabilities of the Indian Navy’s Kalvari-class submarines.

India approved defence acquisitions amounting to Rs 4.22 lakh crore till November this year, with major beneficiaries being domestic companies including Hindustan Aeronautics Ltd., Mazagon Dock Shipbuilders, and Larsen & Toubro Ltd.

A contract was inked with the company in January for the acquisition of 14 multi-role fast patrol vessels for the Indian Coast Guard. The deal value is Rs 1,070 crore.

Mazagon Dock Shipbuilders stock fell as much as 3.51% during the day to Rs 2,236.05 apiece on the NSE. The stock closed 2.09% lower at Rs 2,269.05 per share. This compares with a 0.71% decline in the benchmark Nifty 50. It has risen 98.19% in the last 12 months.

Out of five analysts tracking the company, two maintain a 'buy' rating, two recommend a 'hold,' and one suggests 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 13.1%.