Mazagon Dock shares: Brokerages see up to 37% upside after Q1 FY27 results; check latest target prices

Shares of Mazagon Dock Shipbuilders Ltd rose 2.69 per cent to settle at Rs 2,382.15 on Friday after the state-run defence shipbuilder reported its June quarter (Q1 FY27) earnings. Following the results, select brokerages largely maintained their positive view on the stock.

Antique Stock Broking reiterated its 'BUY' rating on the stock with an unchanged 12-month target price of Rs 3,275, implying a potential upside of 37.48 per cent.

The brokerage said Mazagon Dock delivered an in-line Q1 FY27 performance, with revenue, EBITDA and profit after tax (PAT) rising 12 per cent, 48 per cent and 22 per cent year-on-year (YoY), respectively. Revenue growth was driven by execution of Project 17A frigates, submarine refits and the ONGC order.

Antique expects revenue growth to moderate during FY27-28E but believes execution of large-ticket contracts could lead to meaningful acceleration in subsequent years. It also expects the Project 75I (P75I) submarine programme to be finalised in the coming weeks, which, according to the brokerage, could reverse the declining trend in the company's order book.

It added that the medium-term outlook remains positive as the Indian Navy is approaching a significant ordering cycle, with opportunities across P75I submarines, three additional submarines under Project 75, landing platform docks (LPDs), Project 17B frigates, mine countermeasure vessels (MCMVs) and destroyers.

Choice Institutional Equities also maintained a 'BUY' rating, with an unchanged target price of Rs 3,100, suggesting an upside potential of 30.13 per cent.

The brokerage described the quarterly performance as broadly mixed but margin-accretive. While revenue growth of around 12.1 per cent YoY came in below its estimates, EBITDA margin expanded sharply to 15.2 per cent, well above expectations, supported by normalisation of provisions and a favourable cost mix.

Choice said the margin improvement was the key positive takeaway, although its sustainability would depend on project mix and provisioning cycles, making near-term volatility possible. It remains constructive on Mazagon Dock's long-term prospects, citing the company's strategic position in high-complexity defence platforms with limited domestic competition. The brokerage also highlighted management's aspiration to expand the order book to around Rs 1 lakh crore by FY27E, which it believes could drive multi-year earnings growth, subject to timely execution and award of large projects.

Meanwhile, HDFC Securities maintained its 'ADD' rating but reduced its target price to Rs 2,625 from Rs 3,000 earlier.

The brokerage expects Mazagon Dock to sustain revenue growth over the next few years, supported by a healthy pipeline of submarines, frigates and destroyers, which are long-cycle projects. It noted that the expected order value for six next-generation submarines is around Rs 99,000 crore, while frigates and destroyers could together add another Rs 1.5 lakh crore to the company's order book.

HDFC Securities expects revenue from these platforms to begin contributing from FY28. It also said shorter build times for large platforms are compressing the revenue recognition cycle, supporting future growth. However, it now estimates a 7 per cent PAT CAGR over FY26-FY29E, compared with its earlier expectation of 8 per cent PAT CAGR over FY25-FY28E, leading it to lower its valuation multiple while retaining a constructive long-term view on the stock.