The shares of the only Indian company with decades of expertise of building warships and submarines for the Indian Navy hit an all-time high and upper circuit of Rs 1,591.82 or 10 percent on Tuesday’s first half session after the Ministry of Defence agreed on the purchase of submarines.
At 10:10 a.m. on the NSE, Mazagon Dock Shipbuilders Ltd was trading at Rs 1,570.95, up 8 percent before reaching the upper circuit. As the firm is expecting to get new contracts for submarine construction from the Ministry of Defence, this will assist company to restore its depleting order book.
As per reports, The Ministry of Defence have cleared the procurement of three additional Scorpene or Kalvari class submarines ahead of the Prime Minister’s visit to France. The submarines will be constructed at the facility of Mazagon Dock Shipbuilders in collaboration with France-based Naval Group. The deal is expected to be signed with the Naval group during PM Modi’s visit on July 13- 14. The deal for these three new submarines is anticipated to be worth between Rs 20,000 and Rs 22,000 crore.
The company’s share has delivered multibagger returns of 505 percent in a year and 102 percent in six months. If a shareholder had invested Rs 1 lakh in the company that would be worth Rs 5.05 lakhs in a year and Rs 2.02 lakhs in six months.
Mazagon Dock Shipbuilders Ltd is primarily involved in the construction and repair of ships, submarines, and different types of Naval vessels, as well as associated engineering equipment, for domestic and foreign clients.
FIIs increased their investment from 2.06 in March 2022 to 3.29 in March 2023 during the past year.
In the March 2023 quarter, net sales climbed by 49 percent from the previous quarter to Rs 2,078.59 crore, while net profit increased by 120 percent to Rs 318 crore.
For fiscal year 2023, the company’s financial ratios are improving: the ROE is 25.67%, the ROCE is 30.28%, and the net profit margin is 13.70%.
Other warship manufacturing stocks rose in today’s session as well, with Cochin Shipyard Ltd up 8% and Bharat Dynamics Ltd up 18%.
Written by Omkar Chitnis
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