Rs 246 to Rs 5,600: This defence stock turned into a multibagger in three years, hit record high today

Shares of Mazagon Dock gained 20% to a record high amid a rally in the broader market today. The defence sector stock hit a record high of Rs 5,623.50 on BSE. Market cap of the firm climbed to Rs 1.12 lakh crore. The stock saw the highest turnover of Rs 741.32 crore with 14.20 lakh shares changing hands in the afternoon session. Later, the stock closed 19.52% higher at Rs 5,600.80 on BSE.

Mazagon Dock shares have a one-year beta of 1.3, indicating very high volatility during the period. In  terms of technicals, the relative strength index (RSI) of Mazagon Dock stands at 74.4 , signaling it's trading in the overbought zone. Mazagon Dock share price has risen 338% in a year and gained 2,101% in two years. The stock zoomed 2183% in three years. It closed at Rs 245.85 on July 2, 2021.

Mandar Bhojane, Equity Research Analyst, Choice Broking said the stock can reach Rs 6,000 in the near term.

"This upward momentum is supported by a consistent pattern of higher highs and higher lows on the daily chart, accompanied by robust trading volume. These patterns underscore a strong upward trajectory in the stock. The overall trend for Mazagon Dock is bullish, with confluence from various technical indicators reinforcing the optimistic outlook. One can consider buying on dips, particularly around Rs 4500, capitalizing on potential retracements in the stock price. A stop loss at Rs 4,200 is recommended,"said Bhojane.

Shiju Koothupalakkal - Technology Research Analyst, Prabhudas Lilladher has given a price target of Rs 5,740 levels in coming days.

"The stock has witnessed a strong bullrun in the last 2 months with series of higher lows and higher top formation on the daily chart. The near-term support zone would be near Rs 4300 levels below which the bias can turn little bit weak. With the overall bias maintained strong, we can expect further gains till the budget session expected in the next two weeks time," said Koothupalakkal.

Avdhut Bagkar, Derivatives & Technical Analyst at StoxBox said, "Immediate support exists at Rs 4000, which must be honoured on the closing basis. The 'Higher High, Higher Low' formation remains intact, and the overall trend stays bullish. The price is demonstrating strength in the overbought category of the relative strength index, signifying continuation of the upward trend."

Net profit in Q4 of the last fiscal more than doubled to Rs 663 crore compared to Rs 326 crore during the year-ago quarter. Mazagon Dock reported a revenue of Rs 3,103.6 crore in Q4 against Rs 2,078.6 crore during the same period last year.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) in Q4 surged to Rs 525 crore, from Rs 211 crore during the same figure last year. EBITDA margin rose nearly 700 basis points to 17%.

Mazagon Dock declared a final dividend of Rs 12.11 per share, which is in addition to the interim dividend of Rs 15.34 per share it announced earlier in financial year 2024.

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.