Mazagon Dock shares sank 10% to a low of Rs 1,687.50 on 27 Oct after Q2 net profit plunged 54% year-on-year.

Mazagon Dock Shipbuilders Ltd announced its second-quarter (July–September) financial results on Tuesday afternoon.

Compared to the Rs 750 crore earned during the same quarter a year ago, consolidated net income dropped by 54% to around Rs 344 crore.

Sales fell too. Revenue from operations slipped 16.5% to Rs 2,446 crore from Rs 2,929 crore.

Operating profit took the hardest hit. Operating earnings before interest, tax, depreciation, and amortization (EBITDA) dropped 71.4% to Rs 199 crore.

The company saw its operating margin narrow to 8.1% from 23.7% year-on-year; as a result, operating profit per rupee of sales fell from around 24 paise to nearly 8 paise.

The April to June quarter looked far better. Consolidated profit then stood at about Rs 550 crore.

The board also announced an interim dividend of Rs 5 per share. The record date is 3 November, and payment is due by 26 November. It proposed more room to issue shares as well.

The ceiling on authorized equity capital is proposed to increase to Rs 900 crore from Rs 323.72 crore, expanding the allowable share count from 64.744 crore to 180 crore.

DIPAM, the government’s investment department, and shareholders must still approve it. A third decision involves its Sri Lankan subsidiary, Colombo Dockyard.

Mazagon Dock approved Rs 1,250 crore of credit facilities from State Bank of India in Mumbai, so SBI in Sri Lanka can issue bank guarantees to the subsidiary’s customers.

Mazagon Dock becomes liable if the subsidiary defaults, and the subsidiary will repay the charges plus a 10% markup.

On NSE, the stock opened at Rs 1,890.00 and reached a high of Rs 1,935.60 before the results.

Intense selling pressure toward the close pushed equity prices to a fresh one-year low of Rs 1,687.50.

Mazagon Dock shares closed at Rs 1,754.00, down Rs 121.00 or 6.45% from Monday’s close of Rs 1,875.00.

About 41.40 lakh shares worth Rs 731.16 crore changed hands. The stock is down 29.18% so far this year.

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