India’s defense shipyard Hindustan Shipyard Limited (HSL), which was on the verge of closure, has overcome supply chain challenges, liabilities and outstanding legacy issues, and its net worth has turned positive for the first time in 40 years, The Economic Times has learned. Not only that, the shipyard has reduced its liabilities by Rs 12.53 billion ($146 million).
In the 2024-25 fiscal year, HSL achieved provisional total revenue of Rs 15.86 billion (approximately $186 million) and pre-tax profit of Rs 2.95 billion (approximately $34 million), a year-on-year increase of 36%, achieving the first positive net worth of the company in 40 years.
In February 2010, HSL was taken over by the Indian Ministry of Defence (MoD) as it faced severe financial difficulties.At the end of 2010-2011, the MoD allocated Rs 45,268 million (about $529 million) to it to help modernize it. However, due to lack of orders and operational challenges, its net worth remained constant at -Rs 6.28 billion (approximately -$74 million), and was further reduced to -Rs 10.23 billion (approximately -$120 million) by FY 2014-15.
In the last few years, things have improved for HSL, with profits rising year-on-year on the back of ship orders and other projects.In FY2023-24, HSL’s turnover reached a record Rs 14.13 billion (about $164 million).
On August 25, 2023, the MoD signed a contract with HSL for the construction of five Fusion Supply Ships (FSS) at a total cost of approximately Rs. 190 billion ($2.216 billion), with construction of the first vessel commencing on April 10, 2023. According to the plan, HSL is expected to start delivery in 2027 and be fully built and delivered in about 8 years. This will be the first ship of this type built by an Indian shipyard in India.
Established in 1941, HSL is India’s second largest shipyard after Cochin Shipyard, adjacent to the Shipbuilding Center where India’s nuclear-powered submarines are built and the Eastern Naval Headquarters, and is an important asset due to its location in the southern part of Visakhapatnam and its technological capabilities in submarine conversions. The yard, which has three slipways and a 550-meter outfitting quay, is currently building support vessels for the Indian Navy and carrying out submarine conversions. At this stage, it is focusing on reducing costs, improving productivity and fostering innovation.