Multibagger Mazagon Dock share price rises 8%. Should you Buy, Sell or Hold the stock that has risen 2500% in 5 years?

Stock Market Today: Multibagger Mazagon Dock Shipbuilders Ltd share price gained 8% in the morning trades on Tuesday.

Mazagon Dock Shipbuilders share price opened at ₹4,322.90 on Tuesday on the NSE , 2.9% higher than previous close of ₹4,199.80. The Mazagon Dock Shipbuilders share price thereafter gained further to ₹4,561.15 levels, marking gains of more than 8%.

Mazagon Dock Shipbuilders share price has risen around 130% in a year almost 2500% in 5 years giving Multibagger returns to the investors.

Strong order inflows and earnings growth

The confidence of investors remains strong looking at robust orderbook.

The earnings also have continues to improve regularly. The Earnings Before Interest Tax Depreciation and Amortisation during previous three quarters (Q3FY24, Q4 FY24 and Q1FY25) at ₹539 crore, ₹524 Crore and ₹642 crore respectively have improved regularly as per analysts data. The Net profit growth also has remained strong at 75.4% 97.1% 132.3% respectively during the last three quarters.

Due to the large amount of unmet demand, the business outlook for defense manufacturers is still positive, feel experts. Along with strong domestic demand, India intends to boost defense product exports, which might result in significant development for businesses in these companies.

Experts as Sunil Damania, Chief Investment Officer, MojoPMS however have said that the market has already factored in much of the positive news, as reflected in current valuations for Defence companies.

Not surprising the Defence stocks had seen some correction , however are rebounding now.

The Mazagon Dock share price also had corrected from closing highs of close to ₹5000 in Mid-August to closing lows of close to ₹4200 by start of September, before rebounding.

Valuations

Analysts at Axis Securities expect Mazagon Dock earnings per share to rise at 38.4% CAGR (compound annual Growth rate) from ₹96.0 in FY24 to estimated ₹144.9 in FY25 and ₹184.0 in FY26. The Mazagon Dock share thereby is trading at close to 24 time FY26 earnings estimates.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

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