Mazagon Dock Shares: A ‘Buy’ Candidate Post Q1 Results
Mazagon Dock Shipbuilders Ltd. has maintained its ‘Buy’ rating post Q1 results, despite a decline in Ebitda and PAT.
In its Q1 FY26 earnings report, Mazagon Dock’s revenue grew 11.4% YoY to Rs 26.2 billion, but both Ebitda and PAT declined sharply by 53% and 35% YoY to Rs 3 billion and Rs 4.5 billion, respectively.
This performance fell short of the brokerage’s estimates, which projected revenue at Rs 28.2 billion, Ebitda at Rs 6.2 billion, and PAT at around Rs 7 billion.
Why Mazagon Dock Shares Are a ‘Buy’ Candidate
We expect Mazagon Dock to deliver robust growth with a CAGR of ~21% in revenue, ~22% in Ebitda, and ~17% in PAT over FY25–FY27E.
The company is confident about securing the P75 additional submarine and P75I submarine contracts in FY26, which is expected to expand its order book from Rs 320 billion to over Rs 1.25 trillion.
The leverage from these large-scale contracts, combined with operational efficiencies from initiatives like Shipyard 4.0 and its digital transformation roadmap, should enhance margins and overall profitability.
The stock is trading at a one-year forward P/E of ~33.8x, the company is valued at 45x Jun-27E EPS, which is above its three-year average multiple of 22x.
This valuation implies a target price of Rs 3,540, thereby offering an upside of 26.9%. We maintain our ‘Buy’ rating on the stock.
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