Mazagon Dock share: Buy, target retained; cut FY26 EPS by 8%, says Antique; here's why
Mazagon Dock Shipbuilders: Antique maintained its 'Buy' as it feels follow-on order for three Scorpene submarines and six P75I submarines can elevate the order book and drive medium-term growth in revenue.
- Jul 29, 2025,
- Updated Jul 29, 2025 8:07 AM IST
Defence PSU stock: Antique Stock Broking on Tuesday retained its 'Buy' recommendation and target price on Mazagon Dock Shipbuilders Ltd but cut its FY26 earnings estimates by 8.3 per cent as elevated provisions hurt profit margin in the June quarter, second in a row.
Antique Stock Broking maintained its 'Buy' as it feels follow-on order for three Scorpene submarines and six P75I submarines can significantly elevate the order book and drive medium-term growth in revenue. It also believes the quarterly volatility in margins due to spike in provisions is now largely behind us.
"We maintain BUY rating with an unchanged target of Rs 3,858 at a target P/E multiple of 47x 1HFY28 core earnings (earlier 50x FY27 core earnings)," Antique Stock Broking said.
Starting September quarter, Antique expects the elevated provisioning to taper off sharply. Additionally, there is a possibility of write-backs related to provisions for liquidated damages, warranty, and others, it said.
"While we are revising our FY26 margin estimates downward, we remain constructive on the medium-term margin outlook," the brokerage said.
Mazagon Dock reported Q1 standalone revenue growth at 11.4 per cent YoY. Standalone Ebitda was below the consensus estimates, declining sharply 53 per cent YoY.
On the order book front, the major catalyst will be the order for three additional Scorpene submarines, which is expected to be awarded to Mazdock on a nominated basis, Antique said.
"This order can potentially more than double the company's order book. Further, awarding of the P75I (estimated value of Rs 70,000 crore) and P17B (est. value of Rs 70,000 crore) orders are also on the anvil. Hence the company's order pipeline is very strong. However, we note a risk of delay in awarding of these orders," Antique said.
Overall, Antique remained positive on the Mazagon Dock stock given the large order pipeline, unmatched position in submarine building, and government's focus on developing the shipbuilding sector. The brokerage decreased its FY26 EPS estimate by 8.3 per cent while largely maintaining the FY27 estimate, valuing the stock at multiple of 47 times 1HFY28 core earnings against 50 times FY27 core earnings earlier.
Defence PSU stock: Antique Stock Broking on Tuesday retained its 'Buy' recommendation and target price on Mazagon Dock Shipbuilders Ltd but cut its FY26 earnings estimates by 8.3 per cent as elevated provisions hurt profit margin in the June quarter, second in a row.
Antique Stock Broking maintained its 'Buy' as it feels follow-on order for three Scorpene submarines and six P75I submarines can significantly elevate the order book and drive medium-term growth in revenue. It also believes the quarterly volatility in margins due to spike in provisions is now largely behind us.
"We maintain BUY rating with an unchanged target of Rs 3,858 at a target P/E multiple of 47x 1HFY28 core earnings (earlier 50x FY27 core earnings)," Antique Stock Broking said.
Starting September quarter, Antique expects the elevated provisioning to taper off sharply. Additionally, there is a possibility of write-backs related to provisions for liquidated damages, warranty, and others, it said.
"While we are revising our FY26 margin estimates downward, we remain constructive on the medium-term margin outlook," the brokerage said.
Mazagon Dock reported Q1 standalone revenue growth at 11.4 per cent YoY. Standalone Ebitda was below the consensus estimates, declining sharply 53 per cent YoY.
On the order book front, the major catalyst will be the order for three additional Scorpene submarines, which is expected to be awarded to Mazdock on a nominated basis, Antique said.
"This order can potentially more than double the company's order book. Further, awarding of the P75I (estimated value of Rs 70,000 crore) and P17B (est. value of Rs 70,000 crore) orders are also on the anvil. Hence the company's order pipeline is very strong. However, we note a risk of delay in awarding of these orders," Antique said.
Overall, Antique remained positive on the Mazagon Dock stock given the large order pipeline, unmatched position in submarine building, and government's focus on developing the shipbuilding sector. The brokerage decreased its FY26 EPS estimate by 8.3 per cent while largely maintaining the FY27 estimate, valuing the stock at multiple of 47 times 1HFY28 core earnings against 50 times FY27 core earnings earlier.