'Buy' Mazagon Dock Shares Maintains Nirmal Bang Post Q1 Results; Sees Upto 27% Upside
Nirmal Bang maintains Buy rating on the stock, implying an upside of 27%
Mazagon Dock's Q1 FY26 earnings reflect continued momentum in project execution with key program updates highlighting strong delivery progress and robust order visibility. Mazagon Dock's revenue grew 11.4% YoY to Rs 26.2 billion, but both Ebitda/PAT declined sharply by 53%/35% YoY to Rs 3 billion/Rs 4.5 billion. 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.
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Nirmal Bang Report
We expect Mazagon Dock Shipbuilders Ltd. to deliver robust growth with 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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