Rs 254 to Rs 1,454: Multibagger Mazagon Dock shares jumped 472% from one-year low levels; time to buy, sell or hold?

Shares of Mazagon Dock Shipbuilders rose sharply on Monday amid heavy trading volumes. The stock jumped 10 per cent to hit its 52-week high of Rs 1,454.10. It eventually settled 9.26 per cent higher at Rs 1,444.35 yesterday. Considering Monday's high price, the multibagger scrip was up 472 per cent from its one-year low price of Rs 254, a level seen on July 15 last year. The counter has gained 83 per cent on a year-to-date (YTD) basis and 38 per cent in the past one month.

The company has recently bagged an order worth Rs 2,724 crore from Indian Navy. "Mazagon Dock signed a Contract with Indian Navy for Medium Refit cum Life Certification (MRLC) of second Shishumar class submarine INS Shankush," the company said.

HDFC Securities said Indian Navy's major projects in the pipeline are next-generation destroyers, frigates, corvettes and conventional submarines. "Mazagon is India's only shipyard which is engaged in building destroyers and conventional submarines for Indian Navy. The upcoming bids from the defence ministry could improve the order book and revenue visibility," it noted.

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Aamar Deo Singh, Head Advisory at Angel One Ltd, said, "Mazagon Dock has witnessed a spectacular rally. The company has delivered a good profit growth of 19.50 per cent CAGR (Compounded annual growth rate) over the past 5 years, clocking 37 per cent growth in revenues in 2022-23 (FY23). In addition, net profit for FY23 grew by more than 80 per cent to Rs 1,073 crore, compared with Rs 586 crore in FY22. Investor confidence remains high in the stock. But, booking part profits is also recommended at current levels."

Market Expert Ravi Singh said, "The stock price of the company is showing strong bullish candle on daily and weekly charts. Volume accumulation indicates further uptrend from current levels. Investors may enter the stock for a long-term perspective target of Rs 1,600."

Kush Ghodasara, CMT, said, "Mazagon Dock has touched a new lifetime high with heavy volumes, suggesting a fresh buying momentum. We have seen a breakout at Rs 1,332 which could be a trigger for a new target of Rs 1,605. Indicators are also supporting the momentum with internal crossover but strict stop loss should be kept at Rs 1,310."

VLA Ambala, Research Analyst at Stock Market Today, said "The multibagger stock, which was got listed at around Rs 215 in October 2020, made a high of Rs 1,454, giving more than 560 per cent returns in three years. The company's profitability has risen by almost two times from 513.86 in FY21 to 1,119.03 in FY23. In the last 5 years, net income has grown at a yearly rate of 17.66 per cent as against an industry average of 12.98 per cent, which is pretty attractive. The stock could be held further with a trailing stop loss placed at Rs 1,200. For a minimum 2-month to maximum one-year holding period, expected targets could be between Rs 1,500 and Rs 3,000."

Meanwhile, Indian equity benchmarks settled on a positive note in the previous session, led by strong gains in energy and metal stocks.

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