Mazagon Dock shares rise nearly 6% as firm places bid for submarine deal

Shares of Mazagon Dock Shipbuilders Ltd rose nearly 6% today amid a report that the shipping firm was in race to win a Rs 40,000 crore ($4.8 billion) order to build submarines in India.

According to a Bloomberg report, German defence manufacturing firm Thyssenkrupp AG along with Mazagon Dock Shipbuilders has placed a bid for the order. Spain’s Navantia and Indian engineering conglomerate Larsen & Toubro have jointly submitted a bid for the submarine manufacturing deal.

Subsequently, the multibagger stock hit an intraday high of Rs 1968.70, rising 5.68% on BSE against the previous close of Rs 1862.75. Market cap of the firm climbed to Rs 39,490 crore.

With today's rally, Mazagon Dock stock has risen 149% this year. In a year, the stock has delivered stellar returns of 515.07%. Total 1.59 lakh shares changed hands amounting to a turnover of Rs 30.58 crore on BSE. Mazagon Dock stock hit a 52-week low of Rs 300.90 on August 23, 2022 and an all-time high of Rs 2040 on July 25, 2023.

In terms of technicals, 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.

The defence stock is trading neither in the overbought zone nor in the oversold zone, signaled by the relative strength index (RSI) of 62.1. A stock having a RSI above 70 mark is referred to as overbought.

In July 2022, Ministry of Defense issued a tender inviting global defence manufacturers to design, develop and manufacture conventional diesel-electric-powered submarines with either government-owned Mazagon Dock Shipyard Limited or Larsen & Toubro, one of India’s biggest construction companies.

In the first quarter of the current fiscal, net profit rose 40% to Rs 314.3 crore against Rs 224.8 crore in the corresponding quarter of the last year. Revenue climbed to Rs 2405 crore in Q1 against Rs 2366.5 crore revenue in the June 2022 quarter. However, earnings before interest, tax, depreciation and amortisation (EBITDA) fell to Rs 171.7 crore in Q1 against Rs 173.7 crore year on year. EBITDA margins rose marginally to 7.9 percent versus 7.79 percent in the corresponding quarter of last year.

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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