Shares of Mazagon Dock Shipbuilders Ltd extended their strong run for the second straight session in Wednesday's trade. The stock jumped 6.90 per cent to hit a day high of Rs 4,763. At this price, it has climbed 13.40 per cent in just two trading days. On a year-to-date (YTD) basis, the multibagger PSU has rallied over 110 per cent.
Defence counters, including Mazagon, have been buzzing after the Defence Acquisition Council (DAC) approved proposals worth Rs 1.4 lakh crore to enhance the operational capabilities of the Indian Armed Forces.
Analysts at Antique Stock Broking have maintained a 'Buy' call on Mazagon Dock. "The company is planning seven deliveries in the next two years (FY27 to witness delivery of one fast patrol vessel). This additional AoN could translate to a larger order book for MDL," they stated. The defence PSU's order book, as of August 14, stood at Rs 40,400 crore.
"The stock has been a phenomenal performer in the past 18 months and has rallied significantly. It went on to a consolidation phase after touching its lifetime high. Given the kind of earnings visibility and focus on the defence sector, some value buying is coming back. If we go by the company's earnings and order book, the stock is fairly valued at this point of time. Investors with a high-risk appetite can buy this stock. Those with a long-term view can hold on to it," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
Technically, support on the counter could be seen at Rs 4,600. And, a decisive close above Rs 4,800 is required for more upside.
"Mazagon Dock Shipbuilders stock price is bullish on daily charts. A decisive close above Rs 4,800 level could lead to a further rally towards Rs 5,500 in the near term," said Sebi-registered research analyst AR Ramachandran.
Near-term support will be at Rs 4,600 and resistance at Rs 4,800, said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.
The scrip traded higher than the 5-day, 10-, 20-, 100-, 150-day and 200-day simple moving averages (SMAs) but lower than the 30-day and 50-day SMAs. The stock's 14-day relative strength index (RSI) came at 53.76. A level below 30 is defined as oversold while a value above 70 is considered overbought.
As per BSE, the stock has a price-to-equity (P/E) ratio of 40.39 against a price-to-book (P/B) value of 16.13. Earnings per share (EPS) stood at 110.31 with a return on equity (RoE) of 39.94.