Will Mazagon Dock Shipyard Stock Rise After Q4 FY25 Results?
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Mazagon Dock Shipyard Stock Faces Margin and Sub-contracting Cost Concerns
By S JHA
MUMBAI, June 2, 2025 — All eyes will be on Mazagon Dock Shipbuilders Ltd., a leading defence PSU, stock on Monday after the earnings call of the management on Friday in which it has been clarified that higher provisioning for ongoing projects impacted margins in Q4 FY25 results. The stock had crashed 7% after the announcement of the result, with investors rushing to book profits after a stellar run in the stock prices in recent weeks.
In the earnings call, the management is hoping that the order book will swell by four times by next fiscal, from the current ₹32000 crores to ₹1.25 lakh crore. The defence major is hopeful of bagging key projects soon.
The management also clarified that margins were affected in Q4 FY25 due to a sharp jump in the sub-contracting cost. It said that the management will reassess the provisioning for projects each quarter.
The company reported a sharp 51% year-on-year decline in net profit for Q4 FY25, dropping to ₹325 crore from ₹663 crore in the same period last year, despite a modest 2.3% revenue increase to ₹3,174 crore. The disappointing quarterly performance, coupled with an 83% plunge in EBITDA to ₹90 crore, has sparked varied reactions from market experts regarding the stock’s future prospects.
Mayuresh Joshi, Head of Equity Research at William O’Neil India, remains cautiously optimistic. “Despite the weak Q4 numbers, tailwinds for Mazagon Dock persist, driven by a robust order book of ₹34,787 crore and potential new contracts from the Indian Navy,” Joshi told Business Today. He emphasized that “execution of orders will be critical to monitor, as delays or cost pressures could weigh on margins.” The stock had crashed by 7.18% to ₹3,480.10 on Friday. The Mazagaon Dock Shipyard stock price had hit an all-time high of ₹3,778 ahead of the announcement of Q4 FY25 results. The stock had split in 1:1 ratio last year. In a span of two years, the Mazagaon Dock Shipyard stock has given extraordinary returns to investors.
ICICI Securities highlighted a silver lining in a recent report, stating, “The provisional revenue growth of ~14% YoY for FY25 is below expectations, with implied Q4 revenue at ~₹2,500 crore, down 20% YoY. However, the order backlog of ~₹34,000 crore, three times FY25 revenue, signals strong execution potential over the next 2-2.5 years.”
The brokerage added that contracts like additional Kalvari-class submarines and the P-75I project could bolster the pipeline, as reported by ICICIdirect. Groww.in captured the market’s initial reaction, noting, “Mazagon Dock shares plunged 8% after Q4 FY25 results revealed a 51% profit drop and 83% fall in EBITDA, ending a six-day rally.”
Analysts attributed the decline to high employee and subcontracting costs pressuring margins, which shrank to 3% from 17% a year ago. Yet, the outlet also highlighted optimism, with the stock having climbed over 65% in 2025, fueled by “robust earnings, dividends, and defence contracts.”
Mazagon Dock’s projects’ execution challenges are likely to be in the spotlight as the company pursues growth via projects like P-75I.
(Disclaimer: This article makes no recommendation for buy or sell of shares of any company)
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