Shares of Mazagon Dock Shipbuilders shot up nearly 8% on Monday’s early trades to reach a fresh 52-week high of ₹ 1342.00 apiece after it signed a contract with the Indian Navy. At 11:37 AM, its shares were trading at ₹ 1320.00 apiece, up 5.91%.
The company informed the bourses that it signed a contract worth ₹ 2724.63 crores with the Indian Navy for Medium Refit cum Life Certification (MRLC) of second Shishumar class submarine INS SHANKUSH on 30 June 2023.
The Ministry of Defence stated that the MRLC submarine will be delivered in 2026. Once completed, the Indian Navy’s operational fleet will welcome the combat-ready INS Shankush with increased combat capabilities. Moreover, this project is a crucial milestone in the development of Mazagon Dock as a Maintenance, Repair and Overhaul MRO Hub to serve India’s industrial ecosystem, according to the Ministry.
This project will create 1200 man-days of employment every day for the life of the project and more than 30 MSMEs (Micro, Small & Medium Enterprises) will be involved.
Mazagon Dock Shipbuilders is primarily engaged in the building and repairing of ships, submarines and various types of vessels and related engineering products for various domestic and international clients. It was incorporated as a private company and was taken over by the Government of India in 1960.
In the past year, the company’s share price increased from ₹ 255.30 apiece to ₹ 1342.00 apiece, giving multibagger returns of 425%. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 5.25 lakhs today!
With a market capitalization of ₹ 25,139 crores, Mazagon Dock Shipbuilders is a mid-cap company. It has a high return on equity of 25.97% and is almost debt free. Its shares were trading at a price-to-earnings ratio (P/E) of 22.47, which is lower than the industry P/E of 33.16, indicating that the stock might be undervalued as compared to its peers. Moreover, it has a dividend yield of 1.43%.
Written By Simran Bafna
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