Defence stock jumps 3% after its management targets 37% increase in revenue 

Shares of a defence company zoomed 3.31 per cent on Friday to reach an intraday high of ₹ 424.40 apiece on the National Stock Exchange (NSE) after Its management’s positive commentary on revenue. Its shares settled at ₹ 420.95 apiece. 

Mishra Dhatu Nigam Ltd. has been assisting ISRO since the start of the Chandrayaan-3 mission. The company produces diverse alloys, including titanium and specialised steels. Moreover, it provides metallurgical testing and consultancy, which is endorsed by the National Accreditation Board of Laboratories. 

According to a report, Sanjay Kumar Jha, Chairman & Managing Director, Mishra Dhatu Nigam, told CNBC-TV18 in an interaction that the company has already booked orders of ₹ 600 crore with a target revenue of ₹ 1,200 crore in FY24. This target is 37.62 per cent higher than ₹ 871.94 crores reported in FY23. 

He added that the FY24 contribution from the space segment will be approximately 30 per cent and that he sees incremental revenue of ₹ 300 crore from newly commissioned facilities. He said that the margin range is 30-35 per cent currently and is likely to remain in the same range. 

The company’s share price increased by a whopping 121 per cent in the past six months, as its share price increased from ₹ 190.45 to ₹ 420.95. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares five years ago, the value of their holdings would have been ₹ 2.21 lakh today! 

With a market capitalization of ₹ 7,694 crores, Mishra Dhatu Nigam is a small-cap company. It has a low return on equity of 10.28 per cent and an ideal debt-to-equity ratio of 0.38. Its shares were trading at a price-to-earnings ratio (P/E) of 48.95, which is higher than the industry P/E of 23.28, indicating that the stock might be overvalued as compared to its peers. 

The Government of India holds a 74 per cent stake in it, followed by retail investors with 11.94 per cent, mutual funds with 11.33 per cent, domestic institutions with 1.78 per cent and foreign institutions with 0.95 per cent. 

Written by Simran Bafna 

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