Mazagon Dock Shipbuilders Limited

Industrials — Aerospace & Defense · NSE

₹2,092.00−₹13.00 (−0.62%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, negative free cash flow.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Mazagon Dock Shipbuilders Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Mazagon Dock Shipbuilders Limited engages in the building and repairing of ships, submarines, vessels, and related engineering products in India and internationally. The company operates in two segments, Shipbuilding, and Submarine and Heavy Engineering.

IndustryAerospace & Defense

SectorIndustrials

Employees2,782

Annual revenue₹12,973 Cr

How does it make money?

Turns over ₹12,973 Cr a year. Of every ₹100 of sales, about ₹20 reaches shareholders as profit, with ₹30 left at the operating level before interest, tax and depreciation. Each of its 2,782 employees supports ₹4.66 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.66 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 28.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 26.5% against a peer median of 15.2% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE15.2%

What is the outlook?

13 analysts covering the stock expect revenue to grow about 4.6% and earnings to grow about 10.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+4.6%

Est. earnings growth+10.3%

Analysts13

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +71% while net margin moved +35% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+71%

Margin effect+35%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 4.48x is high — earnings must service borrowings before shareholders see anything
• Current ratio of 1.40 covers short-term liabilities, without much slack
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
✓ Operating profit covers interest 46.1x over
✗ Debt has grown 320.0% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

72/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

71/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

29.5x

3Y Median

43.0x

40 monthly readings · mean 46.2x · range 32.7x–94.5x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 31% below its 3y median of 43.0x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 67% below the peer median of 88.8x.

vs. its own history

Cheap

43.0x median over 40 months · -31%

vs. sector peers

Cheap

88.8x median of 3 peers · -67%

vs. generic bands

Fair

15x–35x

EV/EBITDA

20.8x

PEG

0.92

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 19.5% to 30.4% over 3 years.
High return on capital employed
ROCE of 28.5% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 7307% over 3 years, from ₹6 Cr to ₹447 Cr.
🔴High leverageFinancial
Debt/Equity of 4.48x — earnings must service borrowings before shareholders see anything.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 160% against revenue up 71% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2,830 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 28.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 19.5% to 30.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 31% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 67% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 4.48x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 160% against revenue up 71%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 15% a year✓ 19.6% CAGR
Latest reported year was 12.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 28%✓ 30.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹2,830 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 26%✓ 28.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹84,387 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

29.5x

Fair

Fairly valued against the generic band

P/B Ratio

8.65x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹70.85

Profitable

Profitable on a per-share basis

ROE

26.5%

Strong

Strong capital efficiency

ROCE

28.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

4.48x

High

High leverage

Revenue Growth (YoY)

12.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

21.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.87%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹2,830 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

27.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

14.2%

Average

Average margins

Net Margin

20.1%

Good

Strong bottom-line conversion

Current Ratio

1.40

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.64

Defensive

Steadier than the market

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

2121.9 / 2343.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7,584 Cr	₹9,068 Cr	₹11,196 Cr	₹12,973 Cr	+19.6%
EBITDA	₹1,482 Cr	₹2,515 Cr	₹3,736 Cr	₹3,941 Cr	+38.5%
EBITDA Margin	19.5%	27.7%	33.4%	30.4%	—
PAT (Net Profit)	₹1,119 Cr	₹1,937 Cr	₹2,414 Cr	₹2,583 Cr	+32.2%
EPS	₹27.74	₹48.02	₹59.83	₹64.04	+32.2%
ROE	23.5%	31.0%	30.4%	26.5%	—
ROCE	26.5%	35.6%	34.7%	28.5%	—
Total Debt	₹6 Cr	₹17 Cr	₹20 Cr	₹447 Cr	+320.0%
Free Cash Flow	₹1,380 Cr	₹674 Cr	₹1,297 Cr	-₹2,830 Cr	—

🟢 Revenue has grown at 19.6% a year over 3 years.

🟢 EBITDA has grown at 38.5% a year over 3 years.

🟢 EBITDA Margin has risen from 19.5% to 30.4% over 3 years (+10.8 pts).

🟢 PAT (Net Profit) has grown at 32.2% a year over 3 years.

🟢 EPS has grown at 32.2% a year over 3 years.

🟢 ROE has risen from 23.5% to 26.5% over 3 years (+3.0 pts).

🟢 ROCE has risen from 26.5% to 28.5% over 3 years (+2.0 pts).

🔴 Total Debt has grown at 320.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1,380 Cr to -₹2,830 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹27,458 Cr

Total Liabilities

₹17,474 Cr

Cash & Equivalents

₹2,731 Cr

Operating Cash Flow

-₹2,654 Cr

Capex

-₹176 Cr

Shareholding (proxy)

Institutional Holding

6.1%

Insider Holding

81.2%

Corporate Actions

Dividend Rate

₹18.12

Ex-Dividend Date

20 Aug 2026

Analyst Consensus

Recommendations

6 Buy · 2 Hold · 5 Sell

Target Price (Mean)

₹2,509.77

+20.0% vs CMP

Target Range

₹1,860 – ₹3,275

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

2 mixed4 general

Top Midcap Stocks To Buy: Why Expert Sees Up to 67% Upside in HPCL, NALCO, Mazagon Dock, Siemens, More

Goodreturns, 17 Oct

What Mazagon Dock Doubters Saw Before The Drop

Simply Wall Street, 16 Oct

Mazagon Dock Share Price Rise Streak: 2.22% move, valuation

Univest, 13 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Millworks Technologies Limited Share Price

Business Today, 15 Oct

The Shipyard Revenue Recognition Puzzle: What the Milestone Billing Test Really Reveals

Kalkine India, 16 Oct

Mazagon Dock Shipbuilders shares gain 2.15% to Rs 2,569.00

Moneycontrol.com, 10 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingValuation · Risk

WeakFinancial Health

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 4 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑