The company’s revenue, margin and net profit were all above street expectations during the quarter, when compared on a year-on-year basis.
Mazagon Dock reported a 51% year-on-year growth in its revenue during the quarter, while in comparison, its peers like Cochin Shipyard and Garden Reach reported a revenue growth figure of 13% and 29% respectively on a year-on-year basis.
In its earnings call, while the company did not share its current order book status, it maintained its revenue growth guidance of 10% to 12% for the full financial year.
Mazagon Dock reported a 76% jump in its net profit during the quarter, despite the rise in provisions. In comparison, Garden Reach reported a 21% growth in its bottomline, while Cochin Shipyard’s net profit grew by only 4% from the same quarter last year.
But the parameter where Mazagon Dock has outperformed its peers by a distance, is on the margin front. The company’s EBITDA margin stood at 18.5% from 9.6% last year. In comparison, Cochin Shipyard’s margin grew by 60 basis points, while Cochin Shipyard’s margins declined on a year-on-year basis due to a rise in cost of raw materials.
In its earnings call, the management of Mazagon Dock expects an industry-level margin of 12% to 15% on a Profit Before Tax (PBT) basis. The management did not share a specific margin guidance on an EBITDA level, but it said that normalised project margins should be maintained between 12% to 15%.
Brokerage firm Nirmal Bang wrote in its note that it sees limited upside for the stock considering the run-up that it has seen.
“Given the company’s current execution pace, revenue booking and future order pipeline, we anticipate it will exceed its guidance,” the brokerage said.
Between financial year 2025 – 2027, Nirmal Bang expects Mazagon Dock’s revenue, EBITDA and net profit to grow at a Compounded Annual Growth Rate (CAGR) of 20%, 29% and 19% respectively.
Nirmal Bang has a “hold” recommendation on the stock with a price target of ₹4,106.
Shares of Mazagon Dock are currently trading 1.7% higher at ₹3,992.45. The stock is down 32% from its peak of ₹5,860, which it had hit in July.
