The warships and submarines manufacturer Mazagon Dock Shipbuilders Ltd its shares were trading at Rs 1,309 apiece on Wednesday, up 0.16 percent from the previous close price of Rs 1,299.
In a span of one month, the share price has spiralled over 75.60 percent. Over a year, it has generated returns of 436.89 percent. The company has a market capitalization of Rs 26,401 crores. Over the last year, FIIs have increased their stake from 2.06 in March 2022 to 3.29 in March 2023,
Based on current geo-political conflicts Defense shipbuilding is an emerging area for public and private sector shipyards, defence shipbuilding is expected to grow 8-10% CAGR over the next five years.
Mazagon Dock Shipbuilders Ltd is the only company that has immense expertise in building warships and submarines for the Indian Navy, as well as it caters to international clients also. HDFC Securities gave strong buy potential on Mazagon Dock Shipbuilder.
The company has received several orders from the defence industry, giving it a competitive advantage over its competitors such as,
- The company has an order book of about Rs one lakh crore, led by new generation destroyers and submarines.
- Defence Acquisition Council is expected to hand over a contract of Rs 36000 crore.
- Signed with Concor to manufacture 2,500 shipping containers.
- Indian Navy and Coast Guard’s ship have the plan to place orders for 200 ships each and 165 warships in the coming years
The company has signed multiple agreements with various private businesses in order to boost defence exports from $1.5 billion to $5 billion by the end of 2024–25.
- To support the Make in India concept, the company has commenced the development of indigenous components in warships.
- The company has an agreement with Thyssenkrupp of Germany for the upgrading of vessels and the sharing of technologies.
- Along with TATA Advanced Systems, the company has constructed six Pax hydrogen fuel cell-powered electric vessels.
The company has signed multiple agreements with various private businesses in order to boost defence exports from $1.5 billion to $5 billion by the end of 2024–25.
During the quarter that ended March 2023, net sales jumped 49 percent year-on-year to Rs 2,078.59 crore, whereas net profit soared 120 percent on-year to Rs 318 crore.
Profitability ratios are improving, for the fiscal year 2023, ROE is 25.67 percent, ROCE is 30.28 percent, and the debt-to-equity ratio is 0.02.
The company’s price-to-earnings ratio is 21.96, which is lower than the industry P/E of 32.66, signifying that the stock is trading at a lower price, and it has an EPS of 55.48.
Written by Omkar C
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