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Defence PSU Mazagon Dock Shipbuilders Ltd stayed in focus on Wednesday after its September-quarter earnings impressed the street. The company not only managed a steady growth in topline but also delivered a sharp jump in operating margins — a sign that execution and efficiency have improved meaningfully in recent months.

Brokerage firm Antique Stock Broking maintained a ‘buy’ rating on the counter with a target price of Rs 3,858, implying an upside of almost 40 per cent from current levels. Shares of Mazagon Dock were last trading around Rs 2,750 apiece on the BSE.

In the second quarter, the company’s consolidated revenue rose 12 per cent year-on-year to Rs 2,929 crore, compared with Rs 2,757 crore a year earlier. What stood out was profitability. The EBITDA jumped 54 per cent to Rs 965 crore, and net profit surged 65 per cent to Rs 934 crore, driven by better cost control and favourable project execution. Operating margins expanded to 23 per cent, up sharply from 9 per cent in the June quarter and 18 per cent a year ago. The company said its order book stood at Rs 27,145 crore as of September 30, giving it healthy visibility for the next few years.

For the first half of FY26, revenue grew 9 per cent year-on-year to Rs 5,555 crore. However, both EBITDA and net profit declined 6 per cent each to Rs 1,591 crore and Rs 1,202 crore, respectively. Margins softened to 16 per cent from 21 per cent a year ago, largely due to higher material costs and timing mismatches in project deliveries.

The stock has cooled off from its record high of Rs 3,778, hit in May 2025. Despite that, it remains one of the best-performing PSU defence names. It has delivered a 22 per cent gain so far in 2025, 37 per cent in the past year, and an eye-popping 760 per cent return since its October 2020 listing at Rs 145.

Antique Stock Broking said Mazagon Dock’s long-term prospects remain strong, even if revenue growth moderates in FY26–FY27. The firm expects a rebound once the next phase of submarine and warship contracts begins.

Analysts believe the company stands to benefit from the government’s Make in India push in defence production, along with high barriers to entry in submarine building. They also said there is buzz around likely fresh orders for three Kalvari-class submarines that could further strengthen its order pipeline.

Senior Sub-editor at Zee Business English

shweta.shukla@India.com

Shweta Birendra Shukla is a journalist covering the stock market and corporate aff