Pipavav Shipyard Ltd on Monday said it won an order from the Indian Navy worth 29.75 billion rupees ($659.6 million) and swung to a consolidated net profit in full year FY11, sending its shares up as much as 3.75 percent.
India's largest shipbuilder by market capitalisation said it was the first to receive the warship production license from the Indian government and has signed contracts to build five naval gunboats and offshore patrol vessels for the Indian Navy.
"Increasing focus of government of India on indigenisation of defence production will propel private participation in this segment," the firm said in a presentation to investors.
It expects the government to spend $50 billion to contruct naval defence vessels in the coming years.
Last week rival ABG Shipyard also said it received industrial licenses for design and construction of naval warships and support ships.
Pipavav, which has an orderbook of about $1.5 billion, has strategic tie-ups with foreign partners including SAAB Dynamics, Northrop Grumman and UK's Babcock Group for defence production.
The company has also seen a revival in demand from the global offshore industry, as firms raise exploration and production expenditures.
It has signed contracts worth $110 million with ONGC for 12 offshore support vessels.
Pipavav, which has the largest dry dock in the country, capable of accomodating ships upto 400,000 DWT, is adding a dry dock adjacent to the existing facility on the south western coast of Gujarat, at a cost of around $230 million.
For the year ended March, the company posted a consolidated net profit of 436.9 million rupees compared with a net loss of 460.7 million rupees in the previous fiscal.
It expects its "order book to grow multifold and consequently EBITDA to improve significantly," it said.
The firm has submitted bids for more offshore projects and is evaluating enquiries for defence projects.
Its shares were trading 1.35 percent higher at 82.65 rupees in a choppy Mumbai market.
(Reporting by Aniruddha Basu; Editing by Sunil Nair)