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The stock had made a 52-week high of ₹2,929.98 and are down 23% from those levels.
The company’s topline rose 33% year-on-year to ₹3,143 crore in the December 2024 quarter, led by strong execution. Profit rose 29% to ₹807 crore.Mazagon Dock’s Earnings before interest, tax, depreciation and amortisation (Ebitda) jumped 51.4% to ₹817 crore, while margin expanded 300 basis points to 26% from 23% last year.
The company’s order inflows stood at ₹1,092 crore during the quarter. “Order backlog stands strong at ₹34, 787 crore (3.06x TTM revenues). Orders pipeline also looks robust in defence ship-building along with opportunities in commercial ship-building, exports and ship-repair,” brokerage firm ICICI Securities said.
The brokerage also said that the company’s significant growth in revenues was largely in-line with expectations as execution was expected to remain strong during the quarter as the company is going through a phase of maximum revenue recognition (primarily in contracts like P-75 submarines, P-17A frigates, P-15B destroyers).Meanwhile, another global brokerage firm JPMorgan has raised its price target on the counter to ₹2,262 from ₹2,124 earlier as the company’s performance surpassed. However, new order margins have the brokerage cautious. JPMorgan has a ‘neutral’ rating on the stock.
According to JPMorgan, the company’s December quarter performance was ahead of margin expectations, with large orders on the horizon, it said. However, it said that the order book has stagnated and margins on new orders might be lower.
While revenue growth has been strong, it could temporarily slow if large awards are delayed, the foreign brokerage said. The brokerage noted that orders for submarines and warships are typically large and take considerable time to materialise.
Currently, Mazagon Dock is in contention for significant orders, but the order book fell to ₹34,800 crore at the end of the quarter, marking a 9% year-on-year decline due to the absence of new large orders in recent years, JPMorgan noted.
Out of five analysts that have a coverage on Mazagon Dock, two have a ‘Buy’ rating, and two others recommend ‘hold’, while one suggest ‘sell’. The consensus recommendations of analysts implies a potential upside of nearly 22%.
The government holds a 84.83% stake in Mazagon Dock, which is still above the minimum public shareholding requirement of 75%, as per the December quarter shareholding pattern.
Shares of Mazagon Dock Shipbuilders are currently trading 2.69% higher at ₹2,290.15. Despite the correction from its one-year high, the stock has risen 110% over the last 12 months.
