Mazagon Dock shares in focus as defence PSU signs MoU with Brazilian Navy

Shares of Mazagon Dock Shipbuilders are in focus on Thursday morning after the Brazilian Navy and the Indian Navy in association with the defence PSU entered into an MoU for exchange of information related to maintenance of Scorpène class submarines and other military ships. The MOU inter alia covers the cooperation areas like procurement opportunities, exchange of experiences in defense industries, partnerships in research, development and technological innovation. 

Mazagon Dock recently signed an exclusive MoU with Swan Shipyard for design and construction of landing platform docks (LPDs) for the Indian Navy. "We will be bidding for this project jointly with Swan Shipyard, and we anticipate that we will bring in the synergies of public-private partnership where all our capabilities in design, weapon integration, project management, we will tie up with the flexibility of the private player, both in its infrastructure as well as its procurement. We anticipate that we will be very well placed to win this order," Mazagon Dock said recently in its earnings call. 

During the call, the Mazagon Dock management noted that it has capacity to undertake construction of 11 submarines simultaneously. Even with 3 additional Scorpene Submarines and six 75Is, it has spare capacity. Mazagon Dock has already has an MoU with the Naval Group for exploring export opportunities for the Asian countries.

MOFSL noted that revenue visibility for defence companies remained strong, supported by robust order books. The brokerage said sector margins contracted due to lumpy execution, although it expected full-year margins to improve as delivery schedules normalised and indigenisation gained traction.

MOFSL said Mazagon Dock highlighted a strong pipeline, with major programmes such as the LPD, MCMV, follow-on P17 Bravo and the next-generation destroyer. The company indicated that its order book was likely to cross Rs 1 lakh crore by FY27 as these opportunities materialised.

The brokerage viewed defence ordering as set to improve further in H2FY26. It said defence companies pointed to a strengthening export pipeline, supported by rising enquiries for missiles, radars, naval platforms and ammunition. Management commentary, it added, remained positive, with expectations of a pickup in H2FY26 as tendering activity improved and regional demand visibility strengthened.