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Mazagon Dock Shipbuilders surges 5% on robust quarterly show

Mazagon Dock Shipbuilders also recorded its highest ever revenue and net profit for FY23.

May 31, 2023 / 10:38 AM IST
Mazagon Dock Shipbuilders also recorded its highest ever revenue and net profit for FY23.

In the recent years the company has benefited significantly from the government's push towards indigenisation of warships as part of its 'Make in India' campaign.

Shares of Mazagon Dock Shipbuilders rose over 5 percent in early trade on May 31, buoyed by the company's strong earnings for the January-March quarter.

Despite facing increased input costs, Mazagon Dock Shipbuilders achieved over twofold year-on-year growth in consolidated profit for the fourth quarter of FY23 at Rs 326.2 crore. This outstanding performance can be attributed to robust revenue and strong operating metrics.

The financials

During the quarter, the company generated a revenue of Rs 2,079 crore, reflecting a significant growth of 49 percent compared to Rs 1,396.4 crore in the same period the previous fiscal.

Operational performance also improved significantly as EBITDA ( Earnings before interest, taxes, depreciation, and amortisation) margin expanded sharply to 10.1 percent from 5.5 percent in the base quarter.

At 10.19 am, shares of Mazagon Dock Shipbuilders were trading at Rs 821.47, up 2.71 percent on the National Stock Exchange. Volumes were also high as 21 lakh shares changed hands on the exchanges, as against the one-month daily traded average of 14 lakh shares.

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In the recent years the company has benefited significantly from the government's push towards indigenisation of warships as part of its 'Make in India' campaign. Being a key beneficiary of the campaign, the stock has also soared around 200 percent in just the past year.

The strong stock performance was also back by a robust earnings show. The company recorded its highest ever revenue and net profit for FY23. The topline grew 37 percent on year to Rs 7,827 crore while net profit jumped 83 percent to Rs 1,073 crore in FY23.

What analysts are saying

Brokerage firm ICICI Securities is also positive about the company's earnings and believes the overall performance was better than its expectations led by better-than-expected execution and lower other costs.

"The company’s order backlog was healthy at Rs 40,600 crore as of March 2023. Moreover, there is also a strong pipeline of projects under consideration for the Indian Navy (with an estimated cost of Rs 1.8 lakh crore)," the firm stated in its report.

"We believe that through the current order backlog gives strong visibility for the next two to three years, placement of further orders on time by govt or Indian Navy will be the key to sustainable growth for the company," ICICI Securities highlighted.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​​​​​​​​​​​​​​​​​​​​

Vaibhavi Ranjan
first published: May 31, 2023 10:38 am

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