Mazagon Dock profit falls 53.78% as operating margin slides to 8.14%
Revenue fell 16.49% YoY while expenses rose 0.55%, and other income made up 66.85% of pre-tax profit.
Filed 27 Oct 2026, 14:46 IST · Mazagon Dock Shipbuilders Ltd (MAZDOCK)
Key takeaways
- Consolidated net profit fell 53.78% YoY to Rs 346.40 cr as revenue declined 16.49% while expenses rose 0.55%.
- Operating margin narrowed 15.57 percentage points YoY to 8.14%, 2.80 percentage points below the Industrials peer median.
- Other income contributed 66.85% of pre-tax profit, while the stock fell 6.45% on result day versus a 2.49% median move after the last eight results.
Price around the results
Revenue contraction drove the profit decline
Mazagon Dock’s consolidated revenue fell 16.49% YoY and 16.88% QoQ to Rs 2,446.09 cr. Expenses still rose 0.55% YoY, so operating profit dropped 71.33% and operating margin narrowed 15.57 percentage points. Sequentially, the 16.88% revenue decline was larger than the 9.98% fall in expenses, causing a further 7.04-percentage-point margin contraction.
Other income supported reported profit
Other income contributed 66.85% of pre-tax profit, making the Rs 346.40 cr net profit less reflective of operating earnings. The tax rate fell only 0.35 percentage points YoY, so the lower tax rate provided limited support to net profit. Interest expense rose 166.62% YoY, although it fell 52.98% QoQ.
Margin remains below recent levels and peers
Operating margin fell from 24.63% in Q3FY26 to 14.10% in Q4FY26, recovered to 15.18% in Q1FY27, and then dropped to 8.14% in Q2FY27. Among 37 Industrials companies that have reported, Mazagon Dock’s margin was 2.80 percentage points below the 10.94% sector median and ranked 10th from the bottom.
Capacity expansion is moving beyond naval work
Management said warship capacity had increased from 8 to 10 and submarine capacity from 6 to 11. The company told investors that the 15-acre South Yard Annex is being developed to nearly double shipbuilding and refit capacity, while a 37-acre Nhava facility is being developed for larger ships and offshore naval platforms. Management also said it plans Rs 1,006.0 million of FY26 concept-and-design investment for future bids, versus Rs 357.2 million in the prior year, with such spending charged to profit and loss pending contract finalisation.
The market reaction was unusually negative
The stock fell 6.45% on the result day, with trading volume at 6.72 times the reference level. That move was materially larger than the 2.49% median absolute move after the company’s last eight results, when five reactions were negative and three were positive.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,446 cr | ₹2,943 cr | -16.88% | -16.49% |
| Other income | ₹299 cr | ₹352 cr | -14.83% | -3.47% |
| Expenses | ₹2,247 cr | ₹2,496 cr | -9.98% | +0.55% |
| Operating profit | ₹199 cr | ₹447 cr | -55.40% | -71.33% |
| Operating margin (%) | 8.14% | 15.18% | — | — |
| Interest | ₹21 cr | ₹44 cr | -52.98% | +166.62% |
| Depreciation | ₹30 cr | ₹29 cr | +3.00% | +26.82% |
| Profit before tax | ₹448 cr | ₹725 cr | -38.20% | -53.99% |
| Tax | ₹102 cr | ₹174 cr | -41.78% | -54.68% |
| Net profit | ₹346 cr | ₹550 cr | -37.07% | -53.78% |
| EPS (₹) | ₹8.53 | ₹13.62 | -37.37% | -54.09% |
Operating margin of 8.14% compares with a Industrials sector median of 10.94% across 37 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -6.45% | -6.44% |
Volume on the results session was 6.72× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- MDL plans ₹1,006.0 million of FY26 investment in concept and design for future bids, compared with ₹357.2 million in the prior year.
- MDL's outlook is naval modernisation and diversification across domestic and international maritime and defence sectors.
Expansion
- Warship capacity increased from 8 to 10, while submarine capacity increased from 6 to 11.
- The South Yard Annex is being developed on 15 acres of MbPA land to nearly double shipbuilding and refit capacity.
- A 12,000-tonne floating dry dock is under construction and targeted for completion in July 2026.
- MDL is developing a 37-acre Nhava greenfield shipyard for larger ships and offshore naval platforms.
- MDL acquired 15 acres adjacent to its existing land from Mumbai Port Authority for infrastructure and capacity augmentation.
New orders
- MDL bagged an export order for six Multi Purpose Hybrid Power Vessels for Navi Merchants in Denmark.
New initiatives
- MDL is developing various autonomous underwater platforms using modern technology and artificial intelligence.
Competition
- MDL says its extensive expertise gives it a significant edge over domestic peers.
Problems & risks
- The concept and design investment is charged to profit and loss pending contract finalisation.
What to watch
- Whether operating margin recovers from 8.14% after the 7.04-percentage-point QoQ decline.
- Whether revenue moves above Rs 2,446.09 cr without expenses growing faster than revenue.
- Progress on the 15-acre South Yard Annex and 37-acre Nhava greenfield shipyard.