Mazagon Dock shares tank 5%; defence PSU stock MDL still a buy?
The Mazagon Dock stock fell 5.19 per cent to hit a low of Rs 2,644.90. With this, MDL is down 18 per cent in the past one month, cutting its year-to-date gains to 19 per cent.
- Jul 29, 2025,
- Updated Jul 29, 2025 9:40 AM IST
Mazagon Dock Shipbuilders Ltd (MDL) saw its shares tumbling 5 per cent in Tuesday's trade, as the defence PSU failed to impress Dalal Street with its June quarter results. The quarterly earnings call by Mazagon Dock will not be held due to the management being on official travel, but brokerages such as Nirmal Bang Institutional Equities and Antique Stock Broking kept their target prices on the defence stock in tact.
The stock fell 5.19 per cent to hit a low of Rs 2,644.90. With this, stock is down 18 per cent in the past one month, cutting its year-to-date gains to 19 per cent.
Nirmal Bang said it expects MDL to deliver robust growth with CAGR of 21 per cent in revenue, 22 per cent in Ebitda, and 17 per cent in PAT over FY25–FY27E, as MDL is confident about securing the P75 additional submarine and P75I submarine contracts in FY26, which is expected to expand its order book from Rs 32,000 crore to over Rs 1.25 lakh crore.
"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," Nirmal Bang said.
The valuation implies a target price of Rs 3,540, thereby offering an upside of 26.9 per cent, Nirmal Bang said while maintaining 'Buy' rating on the stock.
Antique Stock Broking also 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 believes the feels follow-on order for three Scorpene submarines and six P75I submarines would significantly elevate the order book and drive medium-term growth in revenue.
"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 Shipbuilders Ltd (MDL) saw its shares tumbling 5 per cent in Tuesday's trade, as the defence PSU failed to impress Dalal Street with its June quarter results. The quarterly earnings call by Mazagon Dock will not be held due to the management being on official travel, but brokerages such as Nirmal Bang Institutional Equities and Antique Stock Broking kept their target prices on the defence stock in tact.
The stock fell 5.19 per cent to hit a low of Rs 2,644.90. With this, stock is down 18 per cent in the past one month, cutting its year-to-date gains to 19 per cent.
Nirmal Bang said it expects MDL to deliver robust growth with CAGR of 21 per cent in revenue, 22 per cent in Ebitda, and 17 per cent in PAT over FY25–FY27E, as MDL is confident about securing the P75 additional submarine and P75I submarine contracts in FY26, which is expected to expand its order book from Rs 32,000 crore to over Rs 1.25 lakh crore.
"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," Nirmal Bang said.
The valuation implies a target price of Rs 3,540, thereby offering an upside of 26.9 per cent, Nirmal Bang said while maintaining 'Buy' rating on the stock.
Antique Stock Broking also 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 believes the feels follow-on order for three Scorpene submarines and six P75I submarines would significantly elevate the order book and drive medium-term growth in revenue.
"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.