 "In less than half a decade, HSL has scripted a stunning turnaround story. Image courtesy: X.com/@CMD_HSL")
India’s oldest shipbuilding institution, Hindustan Shipyard Limited (HSL), has quietly scripted an extraordinary financial turnaround story.
Once plagued by inefficiencies and a sinking order book, this public sector undertaking (PSU) has clocked in a record turnover of over Rs 1,400 crore in the 2023-24 fiscal year.
That is a nearly threefold increase from Rs 478 crore in FY 2020-21.
More impressively, the company has seen an unprecedented order book expansion, which jumped tenfold from Rs 2,000 crore to over Rs 20,000 crore during the same period, Firstpost has learned.
So, how did HSL do it?
HSL’s path to record profit
In the past four years, under the leadership of Commodore Hemant Khatri (Retd), the secret sauce for HSL has been a combination of strict financial management, innovation and modernisation, and renewed focus on quality control.
On the finance front, new business models and varied costing techniques have been adopted. Additionally, the shipyard has signed multiple MoUs to expand its footprint in international markets.
For capacity building, HSL has been investing heavily in modernisation to support large-scale projects.
Some recent examples in this direction are its decision to install a 300-tonne Goliath Crane for constructing large warships, upgraded machinery
The addition of a 4.7 MW Load Bank– the largest in India according to the supplier Statcon Energiaa– and new blasting and painting bays is a step in this direction, too.
The shipyard’s Innovation Incubation Cell is fostering advancements in shipbuilding technology, including the development of previously imported sophisticated equipment– moves that typically result in lower long-term costs.
HSL has also established new standards in quality management by implementing 27 Welding Procedure Specifications. It has achieved significant reductions in quality control observations.
As such, since 2020, the PSU has managed to deliver India’s first Ocean Surveillance Ship, launched two Diving Support Vessels with 80 per cent indigenous content (a first for the shipyard), and signed a record Rs 18,250 crore contract for five Fleet Support Ships.
HSL’s renaissance has also resulted in the shipyard expanding its small and medium enterprises (MSME) vendor base from 130 in FY 2020 to 564 in FY 2024.
Great expectations
HSL is aggressively pursuing export opportunities, negotiating submarine refits with the Vietnam People’s Navy and exploring shipbuilding contracts in Bangladesh, Myanmar, and the Philippines.
In its Strategic Vision 2025-2034 document, unveiled last week, HSL has set the goal of achieving a Value of Production (VoP) of Rs 3,500 crore, secure Mini Ratna status by 2026, and focus on green energy, advanced shipbuilding, and global collaborations.
Its broader aim is to integrate Industry 4.0 technologies, including robotics, Artificial Intelligence, and IoT, to enhance productivity and efficiency.