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- 31 May 2023
- ICICI Securities
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MAZAGON DOCK REVENUE GROWTH, EBITDA MARGIN COME IN BETTER THAN EXPECTATIONS
MAZDOCK - 3291 Change: 14.60 (0.45 %)News: Revenue increased 48.9% YoY (+14.5% QoQ) to Rs 2078.6 crore led by strong execution. The growth was also better than expectation of ~29% YoY as guided by the company through provisional revenue number for FY23. EBITDA margin improved by 459 bps YoY to 10.1%; better than our estimate of 6.5%. This was primarily on account of lower than expected others cost which declined by 29.4% YoY and was at 9.1% of sales vs 19.3% of sales in Q4FY23. However, the margins contracted by 615 bps on sequential basis. EBITDA increased sharply by 172.3% YoY to Rs 210.6 crore led by strong revenue growth with improvement in margins. PAT increased by 105.1% YoY to Rs 326.2 crore led by strong growth in EBITDA and other income. For FY23, revenue growth was at 36.5% YoY with EBITDA margin at 10.2% vs 7.6% in FY22. PAT is up by 79.4% YoY to Rs 1096.1 crore in FY23.
Views: Overall performance has been better than expectations led by better than expected execution and lower others cost. The company’s order backlog was healthy at Rs 40600 crore as of March 2023 (5.2x FY23 revenues), mainly comprising the three major projects (P-75 submarines, P-15B destroyers and P-17A frigates). Moreover, there is also a strong pipeline of projects under consideration for Indian Navy (with an estimated cost of Rs 1.8 lakh crore) like next generation destroyers, next generation frigates, conventional submarines and next generation corvettes. We believe that though the current order backlog gives strong visibility for the next two to three years, placement of further orders on time by govt or Indian Navy will be the key to sustainable growth for the company.
Impact: Positive