Mazagon Dock shares tumble 13% from day's high as Q2 profit tanks 54%

Mazagon Dock Shipbuilders Ltd (MDL) saw its shares tumbling 13 per cent from day's high after the shipbuilder's less-than-expected quarterly numbers. The scrip hit a day's low of Rs 1,691.10 apiece so far, after hitting a level of Rs 1,935 earlier in the day, as the defence PSU reported a massive 54.08 per cent slide in its consolidated net profit at Rs 344.12  crore in the September quarter from Rs 749.48  crore in the same quarter last year. The consensus profit estimate stood at Rs 616 crore, as per Bloomberg data.

Revenues from operator for the quarter declined 16.48 per cent YoY to Rs 2,446.09 crore compared with Rs 2,929.24 crore in the corresponding quarter last year.

The board of directors at its meeting declared an interim dividend of Rs 5 per equity share.

The PSU in another exchange filing said its board has accorded approval for availing additional credit facilities of Rs 1,250 crore with SBI, Mumbai for issuing SBLC in favour of SBI, Sri Lanka for the subsidiary company Colombo Dockyard PLC, Sri Lanka, as per the terms agreed with CDPLC and the bank.

Mazagon Dock said CDPLC is required to furnish bank guarantee (BG) to its clients against the advance received for the shipbuilding contracts. However, owing to limited resources, vis a vis orders
received, CDPLC had requested MDL (Holding company) to offer necessary comfort to the BG issuing bank.

"Accordingly, back-to-brief details of such guarantee or indemnity back Standby Letter of Credit (SBLC) facility or becoming a surety viz, brief details of has been arranged for the bank in Colombo to
c) agreement entered (if any) including enable it to issue BGs in favour of CDPLC’s significara terms and conditions, including clients as and when, it is required," MDL said.