Three dimensional steady multistage calculations, using mixing plane approach, are presented for two different blade geometries in a two stage axial test turbine with shrouded blades. A 3D multiblock Navier-Stokes finite volume solver (TBLOCK) has been used in all the simulations. In order to study shroud leakage flow effects the whole shroud cavity geometry has been modeled, overcoming most of the limitations of simple shroud leakage model in calculating fluid flow over complex geometries. Numerical investigations are mainly focused on assessing the ability of the solver to be used as multistage design tool for modeling leakage-mainstream flow interaction. Several calculations are compared. The first computes the main blade flow path with no modeling of the shroud cavities. The second includes the modeling of the shroud cavities for a zero leakage mass flow rate. Finally a multiblock calculation which models all the leakage flow paths and shroud cavities has been carried out for two different levels of shroud seal clearance. It is found that neglecting shroud leakage significantly alters the computed velocity profiles and loss distributions, for both the computed blade geometries. A numerically predicted shroud leakage offset loss is presented for the two considered blade geometries, focusing on the relative importance of the leakage flow, re-entry mixing losses, and inlet and exit shroud cavity effect. Results demonstrates that full calculation of leakage flow paths and cavities is required to obtain reliable results, indicating the different effects of the leakage-to-mainstream flow interaction on the blade geometries computed. Despite a slight increase in the computational time, multiblock approach in handling leakage flow problem can now-days be used as a practical tool in the blade design process and routine shroud leakage calculations.