Investors can avoid the IPO of Mazagon Dock Shipbuilders (Mazagon). A defence PSU, Mazagon manufactures and supplies destroyers, submarines and other warships to the Indian Navy and the Coast Guard.

Despite being a dominant player in the warship-building industry, the company’s financial metrics are mediocre.

Over FY17 to FY20, while the top-line grew by 12 per cent (CAGR) to ₹4,978 crore, the growth in the bottom-line has not been too inspiring.

Also, given its sole dependence on the Ministry of Defence, the company’s revenue growth hinges on the Centre’s defence outlay, which has seen tepid growth in recent years.

The management plans to tap export and repair orders to utilise the excess capacity. However, the company has not bagged any export orders yet, and repairs and refit constitute only about 2 per cent of the current outstanding order book (as of July 2020).

Its position as a key supplier, a

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