Antique cuts Mazagon Dock target price, earnings on procedural delays

Antique Stock Broking has cut its target price on Mazagon Dock Shipbuilders Ltd, citing procedural delays in the awarding of large defence orders, even as it remains positive on the company's long-term prospects, given a strong order pipeline.

 

The brokerage lowered its target price to ₹3,407 per share from ₹3,858, while maintaining a 'Buy' rating on the stock. 

 

The revision follows a downward cut in earnings estimates by 1.9 per cent for the financial year 2025-26 (FY26), 6.9 per cent for FY27, and 12.7 per cent for FY28, largely due to delays in the estimated timelines for the awarding of mega orders.

 

 

Antique noted that the Indian defence shipbuilding industry is poised for significant order inflows, supported by the Indian Navy and Indian Coast Guard's fleet expansion plans, with each targeting around 200 ships. In addition, India's commercial shipbuilding segment offers a sizeable opportunity of ₹12,000-15,000 crore per year, spanning container vessels, coastal shipping, dredgers, ferries and cruise ships, and oil and gas carriers.  ALSO READ | Ola Electric share price zooms 9% on January 2; should you hold or sell? 

However, in the case of Mazagon Dock, the brokerage flagged delays in key defence orders. The order for three additional submarines under Project-75, for which contractual negotiations were completed several months ago, is yet to be finalised. Management, however, expects progress on this order by the first quarter of FY27. Similarly, the request for proposal for the P17B frigates, earlier expected by December 2025, has yet to materialise, Antique said.

 

The brokerage said Mazagon Dock expects to conclude contractual negotiations for the P-75I submarine project in the coming weeks, with the contract, estimated at around ₹70,000 crore, likely to be signed before the end of the current financial year. This could take the company’s order book from the current ₹25,000 crore to nearly ₹1 trillion.

 

The brokerage added that the total order funnel is estimated at over ₹2.5 trillion, nearly 10 times the current order book, excluding potential orders from the commercial shipbuilding segment, exports, and small and mid-sized vessels. Despite near-term delays, Antique remains constructive on the stock, citing Mazagon Dock's strong position in submarine construction and sustained policy support for the domestic shipbuilding sector.  ALSO READ | Tata Motors, TMPV rally up to 4% post Dec sales; brokerages remain upbeat

Mazagon Dock share price history

Shares of the company rose as much as 1.4 per cent on Friday to ₹2,511.4 per share. The counter has risen 10.7 per cent this year, compared to a 10.5 per cent advance in the benchmark Nifty 50. Mazagon Dock has a total market capitalisation of ₹1 trillion.   ======

 

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