Mazagon Dock Q2: All you need to know about PSU shipbuilder's July-September business

Public sector undertaking Mazagon Dock Shipbuilders’ earnings weakened sharply in the September quarter, with lower revenue and a steep contraction in margins weighing on profitability. The state-owned shipbuilder reported a 71% year-on-year decline in net profit to Rs 199 crore in Q2 FY27, compared with Rs 695 crore in the corresponding quarter of the previous financial year.

Revenue from operations fell 16.5% year-on-year to Rs 2,446 crore from Rs 2,929 crore in the year-ago quarter. On a sequential basis, revenue declined 17% from Rs 2,942 crore in the preceding quarter.

The pressure on profitability was also reflected in the company’s margins, which contracted to 8.1% from 23.7% a year earlier, marking a decline of 1,560 basis points.

Board approves Rs 1,250 crore credit facility

In a separate development, the company’s board has approved additional credit facilities of Rs 1,250 crore from State Bank of India, Mumbai. The facility will support the issuance of a standby letter of credit (SBLC) in favour of SBI Sri Lanka for Colombo Dockyard PLC, Mazagon Dock’s subsidiary.

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The credit arrangement will operate under terms agreed upon by the bank and Colombo Dockyard.

Mazagon Dock Shipbuilders said it would initially bear the charges for issuing the SBLC, along with applicable taxes and directly attributable expenses, including out-of-pocket costs. Colombo Dockyard PLC will reimburse these expenses with a 10% markup.

Mazagon Dock will also be liable as the back-to-back SBLC provider if Colombo Dockyard PLC defaults on its bank guarantee.

Interim dividend declared; share capital expansion proposed

The company has announced an interim dividend of Rs 5 per equity share for FY27. The shares have a face value of Rs 5 each, and November 3, 2026, has been fixed as the record date. The dividend is scheduled to be paid on or before November 26, according to a regulatory filing.

Mazagon Dock has also proposed raising its authorised share capital to Rs 900 crore from Rs 323.72 crore. Under the proposal, the capital would comprise 180 crore equity shares with a face value of Rs 5 each, compared with the existing 64.744 crore shares.

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The proposed increase remains subject to the requisite consent from the Department of Investment and Public Asset Management (DIPAM), through the administrative ministry, and approval from the company’s shareholders.

Shares fall 10% after earnings announcement

Mazagon Dock Shipbuilders’ shares fell as much as 10% to an intraday low of Rs 1,691 on the BSE following the earnings announcement.

The company separately reported a 54% year-on-year decline in net profit attributable to owners to Rs 344 crore in Q2 FY27, against Rs 749 crore in the corresponding period last year.