Mazagon Dock Shipbuilders shares crash 10% after Q2 net profit tumbles 54%; firm
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Mazagon Dock Shipbuilders shares plunged 10% after the state-owned company reported a 54% year-on-year decline in Q2 FY27 net profit to Rs 344 crore. Revenue from operations fell 16.5% to Rs 2,446 crore, while margins contracted sharply. The company also declared an interim dividend of Rs 5 per share.
Shares of public sector undertaking Mazagon Dock Shipbuilders plunged as much as 10% to a day’s low of Rs 1,691 on the BSE on Tuesday. The decline came after the company reported a 54% drop in net profit attributable to owners to Rs 344 crore in Q2 FY27, from Rs 749 crore in the year-ago period.The company has declared an interim dividend of Rs 5 per equity share of face value Rs 5 for FY27, with November 3, 2026, set as the record date. The dividend payment will be completed on or before November 26, the company said in a regulatory filing.
The company has also proposed increasing its authorised share capital to Rs 900 crore from Rs 323.72 crore, comprising 180 crore equity shares of Rs 5 each, compared with 64.744 crore shares currently. The proposal is subject to the requisite consent from the Department of Investment and Public Asset Management (DIPAM) through the administrative ministry, as well as approval from the company's shareholders.
The company’s revenue from operations came in at Rs 2,446 crore, marking a 16.5% drop from Rs 2,929 crore posted in the corresponding quarter of the previous financial year. On a sequential basis, revenue is down 17% from Rs 2,942 crore in the previous quarter.
For the quarter under review, the state-owned Mazagon reported a net profit of Rs 199 crore translating a massive 71% plunge from Rs 695 crore posted in the second quarter of the previous financial year. Margins for the quarter nosedived 1,560 basis points to 8.1% from 23.7% in the year-ago period.
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In a separate disclosure, the company’s board has approved additional credit facilities of Rs 1,250 crore from State Bank of India, Mumbai, to issue a standby letter of credit (SBLC) in favour of SBI Sri Lanka for its subsidiary, Colombo Dockyard PLC. The facility will be available on terms agreed upon with Colombo Dockyard and the bank.
Mazagon Dock Shipbuilders said the SBLC issuance charges, taxes and directly attributable costs, including out-of-pocket expenses, will be borne by the company and reimbursed by its subsidiary, Colombo Dockyard PLC (CDPLC), with a 10% markup.
If CDPLC defaults on its bank guarantee, Mazagon Dock Shipbuilders will be liable as the back-to-back SBLC provider.
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Mazagon Dock share price is down 30% since the beginning of this year. However, on a five year basis, the stock has rocketed 1,267%.
Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
