Mazagon Dock strengthens global shipbuilding play with Navi Merchants contract milestone

Mazagon Dock Shipbuilders Limited has taken a significant step forward in its global shipbuilding ambitions with the successful keel laying of the first in a series of six multi-purpose vessels (MPVs) ordered by Denmark-based Navi Merchants. The ceremony, held on April 2, 2025, at the shipbuilder’s South Yard facility in Mumbai, marks the formal start of construction for Yard 21001 and signals India‘s increasing prominence in international maritime manufacturing.

The MPV project is part of a contract valued at approximately USD 84 million, with each vessel priced around USD 14 million. Mazagon Dock will design, build, and deliver all six vessels under the agreement, which is being closely monitored by global maritime stakeholders as a litmus test of India’s shipbuilding capacity in the commercial export segment. The keel laying follows the project’s production start date in September 2024.

The ceremony was attended by Mazagon Dock Chairman and Managing Director Biju George, Navi Merchants Technical Director Peter Bertelsen, and senior representatives from Det Norske Veritas (DNV), the international classification society that will oversee compliance for all six vessels. The event underscored the strategic importance of the collaboration and the growing appeal of Indian shipbuilders among European clients seeking competitive, quality-assured construction.

Multi-purpose vessel contract signals shift in commercial strategy

The multi-purpose vessels are being constructed to meet stringent DNV classification standards, enhancing their viability for international deployment. Each MPV will measure 116.2 metres in length and carry a deadweight of 7,500 tonnes. The ships are designed to achieve speeds of no less than 11 knots and will be powered by a shaft generator power take-off system rated at 85kW, reflecting a focus on energy efficiency and operational endurance.

This diversification beyond naval contracts represents a deliberate shift in Mazagon Dock’s strategic trajectory. Known for delivering destroyers, frigates, and submarines to the Indian Navy, the company is now leveraging its technical expertise and infrastructure to compete in commercial shipbuilding markets. With the MPV delivery timeline set for April 2026, Mazagon Dock is positioning itself as a global player capable of meeting international standards in both defence and commercial shipping domains.

The order from Navi Merchants marks one of the most visible international contracts for Mazagon Dock Shipbuilders and reinforces India’s aspirations under the ‘Make in India’ initiative to become a preferred destination for advanced marine engineering and vessel construction.

Stock surges as investor sentiment remains bullish

Mazagon Dock’s expansion into export shipbuilding coincides with a period of exceptional performance in the capital markets. As of April 2, 2025, Mazagon Dock Shipbuilders’ shares were trading at ₹2,606, marking a 1.06 percent gain on the day. The company’s stock has delivered a 162 percent return over the past year, up from a 52-week low of ₹986. Analysts attribute this surge to a combination of strong order flows, diversification strategy, and consistent dividend payouts.

Brokerage firms remain bullish. Antique Broking has maintained a ‘Buy’ rating on the stock with a target price of ₹2,757, citing robust execution and a growing order book. FundsIndia’s Equity Research Desk has gone further, assigning a ₹3,112 price target based on an estimated 33x forward earnings multiple for FY2026. The firm notes that Mazagon Dock’s entry into commercial shipbuilding via international contracts could drive sustained earnings visibility over the next several quarters.

Technical indicators also support the positive sentiment. The stock trades above all key exponential moving averages (20-day, 50-day, 100-day, and 200-day), and momentum indicators such as the Relative Strength Index (RSI) and Average Directional Index (ADX) confirm strong uptrends. The Moving Average Convergence Divergence (MACD) indicator is in bullish territory, reinforcing the view that investor interest in the stock is likely to persist in the near term.

Dividend strength and market valuation support further upside

Mazagon Dock Shipbuilders continues to maintain an attractive dividend track record. The company has declared nine dividends since 2021 and paid out ₹35.30 per share over the past 12 months. Notably, the board is scheduled to meet on April 8, 2025, to consider a second interim dividend for the current fiscal year, reinforcing the management’s confidence in cash flow generation.

At a market capitalisation of ₹1.04 lakh crore and a price-to-earnings (P/E) ratio of 32.66, Mazagon Dock appears attractively valued compared to the broader sector P/E of 44.04. Analysts point out that despite the recent run-up, the company remains a viable candidate for long-term investment, particularly as it continues to diversify its revenue streams across defence and commercial shipping verticals.

The expansion into export-driven commercial shipbuilding could further stabilise revenues by reducing dependence on cyclical defence contracts and introducing higher-margin foreign currency inflows. This transition is increasingly important as the company seeks to align its operations with international maritime demand and decarbonisation trends.

India’s export shipbuilding capabilities gain credibility

The keel laying for Navi Merchants’ Yard 21001 vessel offers more than symbolic value—it signals a deeper integration of India into the global shipbuilding supply chain. With Det Norske Veritas overseeing classification and compliance, the vessel will meet international certification standards that open the door to broader deployment across European and Asian waters.

Although specific details on the vessel’s intended operations have not been publicly disclosed, multi-purpose vessels are commonly used in offshore logistics, cargo transportation, marine support services, and energy sector operations. This makes them a flexible asset class for shipping companies with diversified service portfolios.

The successful execution of this six-vessel order could position Mazagon Dock as a recurring vendor for European buyers and open opportunities to participate in global shipbuilding tenders. It also reinforces the viability of the company’s commercial shipbuilding vertical, which has long been overshadowed by its defence portfolio.

Strategic commentary and investment outlook

Market analysts believe Mazagon Dock is now at a pivotal point in its evolution. The company has proven its ability to meet the complex demands of defence clients, and the move into high-value commercial projects represents a natural extension of its capabilities. The contract with Navi Merchants, structured with technical oversight from a European classification body, validates the company’s export-readiness and reinforces its engineering credibility.

For investors, Mazagon Dock Shipbuilders represents a hybrid opportunity—a large-cap defence manufacturer with growing exposure to international markets and commercial revenue streams. The combination of strong technical capacity, a healthy balance sheet, consistent dividends, and export-led growth potential makes it one of the more compelling stories in the Indian industrial space.

Given the momentum in both order execution and stock performance, Mazagon Dock is currently considered a ‘Buy’ for investors seeking medium- to long-term exposure to India’s defence and manufacturing boom. However, investors are advised to monitor delivery timelines and potential delays in global logistics, as well as fluctuations in foreign exchange rates that may affect profitability on export contracts.

As India deepens its industrial footprint on the global stage, Mazagon Dock’s ongoing transformation from a defence-centric shipyard to a diversified, export-focused marine manufacturer could serve as a blueprint for other public sector undertakings seeking similar evolution.