L&T Shipbuilding, currently in Rs 2,500-cr loss, to break even in two years

Larson & Toubro Shipbuilding Ltd is expecting to break even in FY19 or FY20. The company at present has a cumulative loss of Rs 2,500 crore, according to senior management officials.

India’s first indigenous Floating Dock (FDN-2) for the Indian Navy was flagged off from L&T's Kattupalli facility.

Speaking to reporters after the launch, Jayant D Patil, senior vice president said, "We are expecting a break-even in FY19 or it could be in FY20." He added that this would be on account of defence ships and some amount of exports. 

He said that the company has so far invested around Rs 5,000 crore in the Kattupalli facility and the accumulated losses would be around Rs 2,500 crore, which the company expects to come down with the utilisation going up. It is focusing only on the defence projects including for the Indian Coast Guard.  

B Kannan, MD and CEO of L&T Shipbuilding said that the company has posted a sales revenue of Rs 700 crore in the last fiscal. It is participating in four tenders amounting to somewhere Rs 50,000 crore, which is expected to be finalised during the year. The tenders include the Landinf Platform Docks (LPD) for Indian defence force. The other projects are the development of a diving support vessel, survey vessel and ASW Craft.

The facility has a capacity to produce around 110 ships a year once geared up, and the current utilisation is only one-fifth of the capacity, said Patil. Apart from Indian defence forces, the company has orders from Vietnam defence agency. 

The floating dock, which is the second such facility for the Indian Navy, has been completed at a cost of around Rs 468 crore, while a dry dock would have cost around Rs 2,000 crore. The floating dock could be moved through the sea to the location of the ship with a hauling in the system to handle a ship's docking and undocking operations and the FDN-2 would be located near Andaman and Nicobar. 

L&T has also been mandated by Indian Coast Guard (ICG) to design and build seven offshore patrol vessels, of which two will be launched in the second half of this fiscal. It has already delivered 32 interceptor boats to the ICG.

Around Rs 1.4 lakh crore worth of contracts are being executed and Rs 1.10 lakh crore worth of projects are under acceptance of necessity, which would move for tender process later, he added.