Mazagon Dock shares nearly triple from 52-week low in a year; is the upside capped?

Shares of Mazagon Dock Shipbuilders Ltd have nearly tripled from their 52-week low in a year. The multibagger stock zoomed 162% in a year from its yearly low of Rs 986 reached on April 2 last year. In the current session, the defence sector stock was trading on a flat note at 2,580.55. Mazagon Dock's market cap stood at Rs 1.04 lakh crore on BSE. 

Antique Broking is bullish on Mazagon Dock stock with a target of Rs 2757. 

The brokerage said Q3 of the firm witnessed a margin-led beat on the operation front. The brokerage said Mazagon has a strong order book position and its execution is likely to lead to steady topline growth. 

It maintained a 'Buy' rating on the defence sector stock. 

In its report, the brokerage said that Mazagon is the only company technically qualified for the supply of 6 units of P75-I submarines. 

"The order, when placed, could be over INR 500bn. additionally, there is pending order of over Rs 250 bn plus for the supply of 3 scorpene class submarine. Post award of these orders, the company's order-book will shoot to over Rs 1.1 lakh crore," added the brokerage. 

In the current session, total 3.12 lakh shares of the firm changed hands amounting to a turnover of Rs 73.45 crore. Market cap of the firm climbed to Rs 1.04 lakh crore. 

The defence stock has gained 677% in two years and risen 1952% in three years. 

Ameya Ranadive, Chartered Market Technician, CFTe, Sr Technical Analyst, StoxBox said, "Mazagon Dock Shipbuilders stock is currently trading at Rs 2,580, having retested its breakout level around Rs 2,550. The stock has been consolidating in the Rs 2,000–Rs 2,500 range for an extended period and is now trading above the 20, 50, 100, and 200 EMAs, confirming bullish momentum. Technical indicators further support the uptrend—RSI is above 60, indicating strength, while ADX above 29 signals a strong trend. The MACD is in positive territory, confirming bullish momentum. A mid-term target of Rs 2,950 is expected, backed by increasing volumes. However, a break below Rs 2,400 would negate the bullish view."

Om Mehra, Technical Research Analyst, SAMCO Securities said, "Mazagon Dock has witnessed some correction after a decisive breakout above a descending trendline. Following the breakout, the stock rallied to a high of around Rs 2763 but is now undergoing a healthy pullback, which appears to be a classic retest of the breakout zone that previously acted as resistance and may now offer strong support. The stock holds above all key moving averages, including the 20 SMA and 100 SMA, reinforcing the strength of the ongoing trend. The breakout was accompanied by a noticeable rise in volume, adding further credibility to the move and indicating active participation. The daily RSI stands at the 62 level, and a bounce from this level could revive upward momentum. Mazagon Dock Shipbuilders has formed a hammer candle on the daily chart, which may pause the correction and allow the stock to inch higher. As long as the stock sustains above the Rs 2,470 support zone, the bullish structure remains intact. A strong rebound from current levels could lead to a retest of the recent high, and a breakout above that may open the gates toward the Rs 2800– Rs 2860 zone."

Ravi Singh, SVP - Retail Research, Religare Broking said, "The stock has been trading at higher levels since testing its major support zone of Rs 1,900– Rs 1,950. On the weekly charts, the stock has given a breakout from a bullish flag pattern and has held this level for two consecutive weeks, suggesting further bullishness. A fresh buying opportunity can be initiated at the current market price, with potential targets of Rs 3,000 and a stop-loss of approximately 8–10%. The stock has a 50-day EMA support, which is placed at Rs 2,365. Additionally, the firm's Q3 results demonstrated margin-driven outperformance on the operational front. With a robust order book, Mazagon is well-positioned for steady topline growth, driven by strong execution."

In terms of technicals, the relative strength index (RSI) of Mazagon Dock stands at 60.7, signaling it's trading neither in the overbought nor in the oversold zone. Mazagon Dock shares are trading lower than the 5 day, 10 day but higher than the 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

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.