MAZDOCK - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.4

📊 Financial Overview

• Profitability: PAT rose to ₹715 Cr from ₹419 Cr — 26.9% quarterly growth
• Margins: ROCE at 48.8% and ROE at 36.5% — exceptional capital efficiency
• Debt Profile: Debt-to-equity ratio of 0.00 — completely debt-free
• EPS: ₹55.3 — strong earnings base
• Dividend Yield: 0.62% — modest but consistent

📈 Valuation Metrics

• P/E Ratio: 49.5 — slightly above industry average of 47.4
• P/B Ratio: ~13.7 — premium valuation relative to book value ₹200
• PEG Ratio: 0.86 — suggests fair valuation relative to growth
• Intrinsic Value: Estimated around ₹2,900–₹3,000 based on earnings and sector multiples

🏢 Business Model & Competitive Edge

• Core Operations: Mazagon Dock Shipbuilders is a leading defense PSU specializing in warship and submarine construction
• Moat: Strategic contracts with Indian Navy and Coast Guard; limited competition in defense shipbuilding
• Growth Drivers: Defense modernization, export opportunities, and Make in India initiatives

📌 Entry Zone Recommendation

• Suggested Entry: ₹2,650–₹2,750 — near DMA200 and RSI support zone
• Technical Indicators: RSI at 39.0 (oversold), MACD negative — short-term weakness, potential rebound

📈 Long-Term Holding Guidance

• Strong fundamentals, zero debt, and strategic importance make Mazdock a solid long-term hold
• Ideal for investors seeking exposure to defense and infrastructure themes

✅ Positive

• Exceptional ROCE and ROE
• Debt-free balance sheet
• Strong quarterly profit growth
• Strategic contracts and defense sector tailwinds

⚠️ Limitation

• High P/B ratio suggests premium valuation
• FII holding declined by 0.60%
• MACD and RSI indicate short-term bearish trend

📰 Company Negative News

• Stock corrected from ₹3,778 to ₹2,736 amid profit booking and technical weakness

🌟 Company Positive News

• Q4 PAT up 26.9%; strong execution of naval contracts
• Government push for defense indigenization supports long-term order visibility

🏭 Industry

• Defense manufacturing industry P/E at 47.4 — Mazdock trades slightly above average
• Sector driven by government spending, strategic autonomy, and export potential

🧾 Conclusion

• Mazagon Dock is a fundamentally strong defense PSU with high profitability and strategic relevance
• Accumulate near support zones for long-term growth; monitor order book and execution timelines