Mazagon Dock Shipbuilders Q4 Results: Net Profit Drops 51% to ₹325.3 Cr, Revenue Rises Marginally; Dividend Announced

State-owned defence shipbuilder Mazagon Dock Shipbuilders Ltd (MDL) reported a sharp 51% year-on-year (YoY) decline in its net profit for the fourth quarter ended March 31, 2025. The company posted a net profit of ₹325.3 crore, down from ₹659.3 crore in the same period last year, despite a modest 2.3% rise in revenue.

The company’s total revenue from operations rose slightly to ₹2,073.6 crore, compared to ₹2,027.3 crore in Q4 FY24, reflecting tepid top-line growth. However, the sharp drop in profitability indicates pressure on margins and execution bottlenecks in a competitive defence manufacturing environment.

Dividend Declared Amid Profit Dip

Despite the slump in bottom-line earnings, Mazagon Dock announced a final dividend of ₹10.11 per equity share for FY25, showcasing management’s confidence in the company’s long-term fundamentals and healthy cash reserves. This brings the total dividend payout for the fiscal year to ₹20.61 per share, including the earlier interim dividend.

Earnings Breakdown

• Revenue (Q4 FY25): ₹2,073.6 crore (up 2.3% YoY)

• Net Profit (Q4 FY25): ₹325.3 crore (down 51% YoY)

• EBITDA: ₹370 crore (approximate), EBITDA margin stood at ~17.8%

• Final Dividend: ₹10.11 per share

• Order Book: Over ₹38,000 crore as of March 31, 2025

The company cited lower margin recognition and project-specific cost escalations as key reasons for the decline in profit, while maintaining strong execution in ongoing projects, particularly the Scorpene-class submarines under the Indian Navy’s P75 program.

Analysts React: "Temporary Margin Pressure, Long-Term Story Intact"

Market analysts view the results as disappointing on the profit front, but not entirely surprising given the lumpy nature of defence contracts.

“The Q4 results were below street expectations, especially due to compressed margins,” said Rahul Choudhary, defence sector analyst at Anand Rathi Securities. “However, Mazagon Dock’s order book remains robust, and with ongoing and upcoming submarine and destroyer programs, the long-term growth story is intact.”

Some analysts also pointed to the timing of milestone payments and cost adjustments that can cause volatility in quarterly performance.

“These fluctuations are common in shipbuilding PSUs. Investors should evaluate the annual trajectory rather than quarterly swings,” added Roshni Patel, equity strategist at Motilal Oswal.

Stock Market Response

Ahead of the results announcement, Mazagon Dock shares closed 2.1% lower at ₹2,012.40 on the NSE on Wednesday. Following the earnings release, the stock may witness short-term pressure, but many brokerages maintain a “Buy” or “Hold” rating owing to its strategic importance in India’s defence indigenization drive.

Over the past year, Mazagon Dock shares have surged over 110%, driven by investor optimism around Make in India initiatives and strong defence capex in the Union Budget.

Industry Context: Rising Strategic Importance

As India continues to ramp up its naval capabilities amid maritime challenges in the Indo-Pacific, Mazagon Dock has emerged as a key player in the defence production ecosystem. The company is executing multiple high-value contracts for the Indian Navy, including Scorpene submarines, destroyers, and frigates.

The Ministry of Defence has recently announced fresh bids under Project-75 Alpha and other initiatives to build next-gen submarines and warships domestically, potentially offering further visibility to MDL’s revenue pipeline.

Investor Outlook: Volatility vs Long-Term Value

While the sharp dip in quarterly profit might cause short-term market jitters, analysts urge long-term investors to focus on the broader growth trajectory.

The management, in its post-results call, reaffirmed its commitment to capacity expansion, technology partnerships, and faster execution cycles to improve margin visibility over the next few years.

Conclusion

Mazagon Dock’s Q4 results reflect the inherent challenges in the defence manufacturing sector—especially in large, milestone-based projects where profit realization often lags behind execution. However, with a healthy order book, strategic government backing, and dividend payouts signaling financial resilience, the company remains well-positioned for long-term growth.

Investors may expect near-term stock volatility, but the fundamentals—backed by India’s defence modernization efforts—continue to offer compelling value.