Mazagon Dock profit doubles year on year, but margin falls sharply sequentially
Costs grew much faster than revenue in Q4FY26, while other income contributed 38.9% of pre-tax profit.
Filed 30 Apr 2026, 21:05 IST · after market close · Mazagon Dock Shipbuilders Ltd (MAZDOCK)
Key takeaways
- Consolidated net profit rose 107.25% year on year as operating margin expanded 11.26 percentage points.
- Quarter on quarter, expenses grew 21.86% against revenue growth of 6.92%, cutting operating margin by 10.53 percentage points.
- The stock fell 4.45% on the reaction day, more than double its 1.85% median absolute move after the last eight results.
Price around the results
Year-on-year profit rebound loses sequential momentum
Mazagon Dock's consolidated revenue grew 21.29% year on year, while expenses rose 7.23%, lifting operating margin by 11.26 percentage points. That drove a 107.25% increase in net profit and a 108.93% rise in EPS. The sequential picture was weaker: revenue increased 6.92%, but net profit fell 23.37%.
Expense acceleration cut Q4 operating margin
Quarter-on-quarter expense growth of 21.86% far exceeded revenue growth of 6.92%, reducing operating margin by 10.53 percentage points. Interest expense also rose 68.24%, adding to the pressure. A 5.07-percentage-point fall in the tax rate partly cushioned the decline in profit after tax.
Margin remains below the Industrials peer median
Operating margin rose from 11.49% in Q1FY26 to 23.71% in Q2FY26 and 24.63% in Q3FY26, before falling to 14.10% in Q4FY26. It was 1.56 percentage points below the 15.66% median for the 71 Industrials peers that had reported the quarter. Other income accounted for 38.9% of pre-tax profit, making the reported profit mix less dependent on operations.
Management outlined capacity and expansion moves
Management said MDL can build 11 submarines and 10 warships concurrently. The company said it had secured a 51% controlling stake in Colombo Dockyard PLC for approximately Rs 236.95 crore, bringing the Sri Lankan shipyard under its operational control. Management also said MDL had signed a teaming agreement with Swan Defence and Heavy Industries to work on Landing Platform Docks for the Indian Navy.
Market reaction was unusually negative for the stock
The stock fell 4.45% on the reaction day, with volume at 1.8 times the reference level, and was down 9.72% by t+30. Across the last eight results, the stock rose twice and fell six times, but the latest reaction exceeded its 1.85% median absolute move.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,850 cr | ₹3,601 cr | +6.92% | +21.29% |
| Other income | ₹325 cr | ₹304 cr | +6.66% | -5.71% |
| Expenses | ₹3,308 cr | ₹2,714 cr | +21.86% | +7.23% |
| Operating profit | ₹543 cr | ₹887 cr | -38.79% | +503.14% |
| Operating margin (%) | 14.10% | 24.63% | — | — |
| Interest | ₹10 cr | ₹6 cr | +68.24% | +801.80% |
| Depreciation | ₹23 cr | ₹23 cr | -1.42% | -20.00% |
| Profit before tax | ₹835 cr | ₹1,162 cr | -28.18% | +106.27% |
| Tax | ₹161 cr | ₹283 cr | -43.16% | +102.25% |
| Net profit | ₹674 cr | ₹880 cr | -23.37% | +107.25% |
| EPS (₹) | ₹16.84 | ₹21.81 | -22.79% | +108.93% |
Operating margin of 14.10% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.45% | -4.96% |
| Next session | -3.65% | — |
| 5 sessions | -6.12% | -5.37% |
| 15 sessions | -9.62% | — |
| 30 sessions | -9.72% | — |
Volume on the results session was 1.80× 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.
Expansion
- MDL can build 11 submarines and 10 warships concurrently.
- MDL secured a 51% controlling stake in Colombo Dockyard PLC for approximately Rs 236.95 crore.
- The Colombo Dockyard acquisition brings Sri Lanka's largest shipyard under MDL's operational control.
New initiatives
- MDL signed a teaming agreement with Swan Defence to collaborate on Landing Platform Docks for the Indian Navy.
- MDL conducted a vendor development programme for SC/ST and women MSE suppliers.
Competition
- MDL is the only public sector defence shipyard constructing destroyers and submarines.
What to watch
- Whether operating margin recovers from 14.10% after the 10.53-percentage-point sequential decline.
- Whether expense growth moderates from +21.86% quarter on quarter against revenue growth of +6.92%.
- Whether other income remains close to 38.9% of pre-tax profit.