Shares of Mazagon Dock Shipbuilders Ltd dropped over 3.3% to ₹2,695.50 on Tuesday, July 29, after the company reported a sharp 35% year-on-year drop in net profit for the June quarter of FY26.
The state-run defence shipbuilder posted a net profit of ₹452 crore, down from ₹696 crore in Q1 FY25. However, the company did see a 39% sequential improvement from ₹325 crore in the March quarter.
Despite the profit drop, revenue from operations grew over 11% YoY to ₹2,626 crore. Sequentially, though, revenue declined more than 17%, reflecting a slowdown in project execution.
Total expenses surged 35% YoY to ₹2,348 crore, eating into operating margins. Analysts flagged this spike in costs as a key concern, especially in light of the rising provisioning and project cost pressures.
The company’s associate firm, Goa Shipyard, contributed ₹32.9 crore to the net profit, partially softening the earnings impact.
Market experts noted that while Mazagon remains integral to India’s defence manufacturing roadmap, the stock may face valuation reset pressure following its sharp rally in FY25, unless there is visible margin recovery in upcoming quarters.
Management guidance on cost controls, margin trajectory, and project timelines will be crucial for investor sentiment going forward.
