Mazagon Dock shares snap winning streak, tumble 8%. Here's why
Shares of Mazagon Dock Shipbuilders tumbled 8% in early trade on Friday, May 30, snapping a six-day winning streak after the defence PSU reported a sharp drop in March quarter earnings.The stock fell to an intraday low of Rs 3,450, retracing from Thursday's close of Rs 3,749. Around 10:07 am, shares of the company were trading 4.75% lower at Rs 3,574.40.advertisementThe Mumbai-based shipbuilder, which constructs warships and submarines for the Indian Navy, reported a 51% year-on-year decline in consolidated net profit for Q4 FY25. Net profit came in at Rs 325.3 crore, down from Rs 663 crore in the same period last year.
Revenue showed a marginal uptick, rising 2.3% to Rs 3,174.4 crore from Rs 3,103.7 crore a year ago. However, the biggest disappointment was on the operational front. EBITDA plunged 83% to Rs 90 crore in the March quarter, compared to Rs 524 crore in the corresponding quarter of FY24.The earnings miss triggered a sharp reaction in the stock, which had been on a strong run. Over the past year, Mazagon Dock shares have surged 123%, while the two-year and three-year gains stand at 868% and 2,497%, respectively.advertisementAs of the previous trading session, the company's market capitalisation stood at Rs 1.51 lakh crore. Around 2.99 lakh shares changed hands on the BSE on Thursday, generating a turnover of Rs 111.18 crore.The company also proposed a final dividend of Rs 2.71 per share, pending shareholder approval at the upcoming Annual General Meeting. This follows an interim dividend of Rs 11.595 per share (adjusted from Rs 23.19 due to a stock split) and a second interim dividend of Rs 3.00 per share paid earlier in the year.Mazagon Dock Shipbuilders Ltd, under the Ministry of Defence, is a critical player in India's shipbuilding ecosystem, catering to both defence and commercial clients. While long-term fundamentals remain tied to defence contracts, the latest results underscore the earnings volatility that can weigh on even high-performing PSUs.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
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