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Nirmal Bang Report
Mazagon Dock Shipbuilders Ltd.'s revenue, Ebitda, and PAT are expected to grow at a CAGR of 10%, 10%, and 9%, respectively, over FY25–FY27E.
The stock is currently trading at a 1-year forward P/E of 33.5x, which is above its tjhree-year average of 28 times.
Nirmal Bang retain Buy rating and value the stock at 39x Dec-27E earnings (+1 SD above the historical mean), arriving at a target price of Rs 2,984 (earlier TP of Rs 3,518).
The brokerage has revised its valuation multiple downward from 45 times (+2 SD) to 39x (+1 SD) to reflect lower growth expectations, resulting in a ~15% reduction in the target price.
Q3 FY26 performance update:
The company reported a revenue of Rs 3,600 crore, up 14.6% YoY driven by execution of P15B Destroyers and P17A Frigates. Ebitda grew to Rs 890 crore, a growth of 9% YoY, leading to an Ebitda margin of 24.6% as compared to 26.0% in Q3 FY25. Adjusted PAT stood at Rs 880 crore with a net profit margin of 24.4% as compared to 25.7%.
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