Mazagon Dock Shipbuilders Slumps 7percent as Q4 FY25 Profit Plunges 51percent Despite Annual Growth

Shares of state-run defence major Mazagon Dock Shipbuilders Ltd (MDL) fell sharply by over 7 percent in early trade on May 30, following a disappointing set of earnings for the fourth quarter of FY25. The company reported a steep 51 percent year-on-year decline in net profit for the March quarter, sending investor sentiment into reverse despite strong full-year performance.

Highlights:

• Q4 FY25 net profit fell 51% YoY to ₹325.3 crore.

• EBITDA dropped 83% YoY to ₹90 crore.

• Revenue rose just 2.3% to ₹3,174.4 crore in Q4.

• Stock declined 7.6% to ₹3,485.4 on NSE at 9:18 am.

Weak Operational Metrics Undermine Quarterly Performance

Mazagon Dock Shipbuilders, a leading public sector defence shipbuilder, reported that its Q4 FY25 consolidated net profit plummeted to ₹325.3 crore from ₹663 crore in Q4 FY24, indicating significant margin pressure despite moderate revenue growth. Total revenue for the March quarter edged up by just 2.3 percent to ₹3,174.4 crore, compared to ₹3,103.7 crore in the same period last year.

The sharpest drag came from EBITDA, which plunged 83 percent year-on-year to ₹90 crore from ₹524 crore, pointing to elevated cost structures or a less profitable project mix. Despite ongoing defence sector momentum, the company’s operational profitability faced considerable erosion in the final quarter of the fiscal year.

Highlights:

• Operating margin deterioration weighed on Q4 earnings.

• EBITDA margin declined drastically from 16.9% to just 2.8%.

• Revenue growth failed to translate into bottom-line strength.

Strong FY25 Performance Masked by Q4 Slump

Despite the weak quarterly showing, Mazagon Dock Shipbuilders delivered robust full-year results, with net profit for FY25 increasing 25 percent YoY to ₹2,414 crore, up from ₹1,937 crore in FY24. Annual revenues also jumped 21 percent to ₹11,432 crore, highlighting successful execution of large defence contracts and sustained naval orders.

The full-year strength underscores the company’s strategic position in India’s naval shipbuilding program, though quarterly volatility continues to pose a risk for investors tracking near-term performance. This contrast between annual and quarterly performance weighed on investor sentiment, sparking sharp selloffs in the stock despite longer-term tailwinds.

Highlights:

• FY25 net profit up 25% YoY despite weak Q4.

• Annual revenue crossed ₹11,000 crore for the first time.

• Earnings volatility indicates lumpy revenue recognition cycle.

Stock Corrects After Stellar 1-Year Rally; Focus Shifts to Upcoming Orders

Mazagon Dock shares had more than doubled over the past 12 months, rallying nearly 130 percent versus a 10.4 percent gain in the Nifty 50 during the same period. However, the poor Q4 show triggered profit booking, with shares falling by 7.6 percent to ₹3,485.4 on the NSE as of 9:18 am, marking one of the steepest intraday declines in recent months.

Investor focus now shifts to future order flows, particularly the anticipated ₹44,000 crore procurement plan for 12 advanced mine countermeasure vessels (MCMVs) for the Indian Navy. The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, is expected to consider granting “acceptance of necessity” (AoN) for the project soon, according to sources cited by the Times of India.

Highlights:

• Stock down sharply after a 130% 1-year rally.

• Market awaiting clarity on ₹44,000 crore MCMV deal.

• MCMVs to strengthen India’s undersea defence capability.