Mazagon Dock Shipbuilders Confident Of Achieving 15% Ebitda Margin In FY26

Mazagon Dock Shipbuilders Ltd. is targeting Ebitda margins of 15% in FY26, according to Biju George, Director (Shipbuilding). This will be achieved with the help of the company’s healthy order book and improvement in performance in the second half of FY26.

“With the present data available and the way it is panning out, a fair figure would be around 15% we would be able to sustain. The current order book is around Rs 30,000 crore, which we intend to liquidate in the coming four years by 2029,” he said in an interview with NDTV Profit on Wednesday.

The defence PSU’s Ebitda margin contracted to 11.46% in Q1FY26, compared to 27.23% in the year-ago period.

The company reported a 35% year-on-year decline in consolidated net profit at Rs 452 crore in Q1FY26 from Rs 696 crore in Q1FY25. The top executive attributed this to a “surprising” quantum of provisions.

However, George confirmed that the provisioning issue is largely behind the company, with margins expected to normalise from the second quarter.

“We have done a very conservative provisioning to ensure that no further provisioning would be required in the subsequent quarters. On a yearly basis, our revenue and profitability can be maintained and sustained at the levels it was anticipated,” he explained.

George projected a normalised revenue growth rate of 8–10% due to the long gestation period of shipbuilding projects.

The company also expects a stronger performance in the second half of the financial year. Execution on key ONGC projects, which typically slows during the monsoon, is set to resume post-September.

“H2 of this financial year would look better as more revenues will trickle down from the ONGC projects,” he said.

The state-owned shipbuilding company is also a strong contender for several high-value upcoming projects. The top executive highlighted the P-75I submarine orders, next-generation destroyers and Project 17B frigates as major opportunities.

Despite global uncertainties, George downplayed concerns about execution, stating that most equipment is already secured, albeit at higher prices.

Mazagon Dock Shipbuilders has no immediate plans for debt or equity fundraising. George highlighted that the company’s internal accruals and cash flows are sufficient to fund its capital expenditure, which is spread over three to four years due to the long gestation period of civil works and projects.

“As of now, we’re not looking at equity fundraising. If growth accelerates significantly, we’ll reassess,” he added.

Shares of Mazagon Dock Shipbuilders closed 1.49% higher at Rs 2,761 apiece on the NSE on Wednesday, compared to the benchmark Nifty50 settling at 24,855.05, up 0.14%.