Mazagon Dock stock split: Upcoming corporate action for zero-debt defence firm, time to buy?

Mazagon Dock share price today: Shares of Mazagon Dock Shipbuilders Ltd will see a stock split for the first time time in their history at the end of this month. The stock of the BSE 200 firm will trade ex-split in a ratio of 1:2 as part of the corporate action. This implies the sub-division of the existing 1 equity share of the face value of Rs 10 each fully paid up into 2 equity shares of the face value of Rs 5 each fully paid up.

The record date to determine the eligibility of shareholders for the stock split has also been fixed on Friday, December 27, 2024. The stock has delivered multibagger returns of 139% in a year and gained 499.35% in two years. This year, the stokc has gained 119%. 

In the current session, the multibagger defence stock rose 4.14% intraday to Rs 5051 against the previous close of Rs 4849.80 on BSE. Total 0.54 lakh shares of the firm changed hands amounting to a turnover of Rs 27.05 crore. The stock has risen nearly three times from its 52 week low of Rs 1,797.10 touched on March 14 this year. 

In terms of technicals, the relative strength index (RSI) of Mazagon Dock stands at 65.5, signaling it's trading neither in the overbought nor in the oversold zone. It has a beta of 1.6 indicating high volatility during the year. Mazagon Dock shares are trading higher than the 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

Jigar S Patel, manager at Anand Rathi said, "Support will be Rs 4,700 and resistance Rs 4,900. A decisive move above the Rs 4,900 level may trigger a further upside of Rs 5100. The expected trading range will be between Rs 4,650-Rs 5,100 for the short-term."

The stock is among Axis Securities' top technical picks. 

"The stock found support at the 50% Fibonacci retracement of the rally from Rs 1795 to  Rs 5830, positioned at Rs 3830, confirming a mediumterm support base. The daily Relative Strength Index (RSI) is sustaining above its reference line, indicating a positive bias. The RSI has broken above the downward-sloping trendline, further confirming the validity of the breakout in price action. Following the pattern breakout, the stock is expected to commence an uptrend, with target levels projected at Rs 4965 &  Rs 5085," said Axis Securities. 

JP Morgan has a neutral rating on the stock with a price target of Rs 4248. 

Mazagon Dock Shipbuilders Ltd (MDSL) is a leading defence public sector undertaking shipyard under the Ministry of Defence (MoD). Mazagon Dock is primarily engaged in constructing and repairing warships and submarines for MoD and other types of vessels i.e. cargo ships, multipurpose support vessels, barges and border outposts, tugs, dredgers, water tankers, etc. for commercial clients.