Shares of multibagger Mazagon Dock Shipbuilders Ltd have zoomed over 450% from their 52-week low to their 52 week high in a period of merely a year. The stock which fell to a 52 week low of Rs 241.60 on July 1, 2022 touched a 52-week high of Rs 1341 on July 3, 2023 this year, translating into returns of 455% in a year. The stock of the war shipbuilding firm in which the government has 84% stake, surged 7.55% to a fresh high on Monday after it inked a Rs 2725 crore contract for Medium Refit with Life Certification (MRLC) of Sub-Surface Killer (SSK) Class of Submarine “INS Shankush” with the Ministry of Defence.
With the recent rally, the defence stock has surged 100% in three months and zoomed 57% in a month. However, on the daily charts, the stock is overbought, said Abhijeet from Tips2trades.
“Mazagon Dock stock price is overbought and bullish on the daily charts and a close above Rs 1310 could lead to Rs 1430 in the near term. Investors should book profits at current levels or keep a strict stop loss of support of Rs 1230 to hold buy positions,” added Abhijeet.
In terms of technicals, Mazagon Dock stock has a one-year beta of 1.5, indicating very high volatility during the period. Mazagon Dock shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
Gaurav Bissa, VP, InCred Equities said, “Mazagon Dock has been one of the strongest and most consistent defence names in the last few months. It has been the most outperforming shipping defence stock for a while now. The stock recently witnessed a swing high breakout on the weekly charts at Rs 945 and has achieved the immediate target price around Rs 1300. Further, the trend as well as the momentum remains strong, supported by strong volumes in the last few weeks which can push the stock towards Rs 1550 levels. One can trail the stop loss to Rs 1170 for the existing positions and continue to hold for higher levels. Fresh entry is not advised in the stock at current levels as the risk reward is not favorable."
In the fourth quarter of the previous fiscal, net profit more than doubled to Rs 326 crore against Rs 159 crore in the corresponding quarter of the last year. Other income rose to Rs 211 crore in Q4 against Rs 129 crore year on year. Revenue climbed 49 percent to Rs 2,078 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) zoomed nearly three times to Rs 211 crore in Q4 against Rs 77 crore year on year. EBITDA margins doubled to 10.1 percent versus 5.5 percent in the corresponding quarter of last year.
Mazagon Dock Shipbuilders Ltd (MDS) is a shipbuilding and offshore fabrication yard. The company's major activities include shipbuilding, ship repairs and fabrication of offshore structures. It provides warships, merchant ships, submarines, support vessels, offshore platforms, passenger cum cargo vessels, trawlers, main and helidecks and barges.