Shun the narrative on Mazagon

Choppy waters Mazagon Dock's Ebitda margin in Q4FY25 fell to a low as provisions for losses on fast patrol vessels surged.

- Manish Joshi

Mazagon Dock Shipbuilders Ltd's shares rose 5% on Tuesday to ₹3,306. This is the first significant bounce after the stock dropped almost every day from its all-time high of ₹3,775 seen in May, just before the dismal March quarter (Q4FY25) results were declared.

What might have rekindled some interest in the stock is JM Financial's note indicating a medium probability that the stock may be included in the MSCI India Index. The rebalancing may be announced on 7 August.

Investors must be cautious of the news flow and narrative surrounding the Mazagon stock, which is being viewed as a defence sector play. However, this does not necessarily mean superior profitability versus the global shipbuilding industry. Its management has clarified that their sustainable profitability margin will be in line with the global shipbuilding industry at about 15% at the profit before tax (PBT) level.