Mazagon Dock shares hit record high, up 592% in a year; more upside likely?

Shares of Mazagon Dock Shipbuilders Ltd hit a record high in early deals despite a correction in the broader market today. The multibagger defence stock hit an intraday high of Rs 1910, rising 5% on BSE against the previous close of Rs 1819.85. Market cap of the firm climbed to Rs 37,887 crore.   

With today's rally, Mazagon Dock stock has risen 136.68% this year. In a year, the stock has delivered stellar returns of 592%. Total 1.87 lakh shares changed hands amounting to a turnover of Rs 35.10 crore on BSE. Mazagon Dock stock hit a 52-week low of Rs 261 on July 18, 2022.   

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In terms of technicals, the relative strength index (RSI) of Mazagon Dock stands at 81.3, signaling it's trading in the overbought territory. 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.   

Abhijeet from Tips2Trades said, "Mazagon Dock stock price is overbought on the Daily charts with strong resistance at Rs 1773. Investors should book profits at current levels as a close below support of Rs 1591 could lead to Rs 1160 level in the near term." 

Aamar Deo Singh, Head Advisory, Angel One Ltd said, "Mazagon Dock, a leading player in the shipbuilding industry, has witnessed a spectacular rally with the stock gaining almost 62% YTD, to trade at record levels (CMP - Rs.1289). The company has delivered a good profit growth of 19.5% CAGR over the past 5 years, clocking 37% growth in revenues for full year FY23. Further, net profit for full year FY23 grew by over 80% to Rs 1,073 crore, compared with Rs 586 crore in FY22. Investor confidence remains high in the stock but at current levels, booking partial profits is also recommended."

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Antique Stock Broking has assigned a target of Rs 1,944 on the stock. 

"The stock is still under-valued. Here are the reasons why: (1) Investors assume the Rs 430 bn P75(I) is a one-off project-with Mazagon Dock's best case of winning 4/6 orders; on the contrary, we argue submarine work is recurring. Add three units of the Scorpene class, followed by 12 units of the P76-and the TAM is over Rs 1.3 trn; (2) Moving to non-submarine work, there is Rs 345 bn order backlog that can support Rs 100 bn plus annual execution, which again has a recurring argument with a TAM of over Rs 1.3 trn. Thereby, for projections made using

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Earnings show

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.

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About the company

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. 

  

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