Mazagon Dock Shipbuilders shares jump 7.5% to touch new record high after receiving ’Navratna’ status

Shares of Mazagon Dock Shipbuilders, a leading defence public-sector shipyard under the Ministry of Defence (MoD) in India, surged nearly 7.5% to reach an all-time high of ₹4,271 per share.

This jump followed the company's announcement via an exchange filing that the Department of Public Enterprises (DPE) has approved the proposal to grant Navratna status to Mazagon Dock Shipbuilders. This makes the company the 18th Navratna company among the public sector enterprises.

The company received Miniratna Category I status in 2006 from the Department of Public Enterprises.

Navratna status is granted to public sector enterprises (PSEs) in India based on a combination of financial performance, operational efficiency, and autonomy. To qualify, a company must first be a Miniratna Category I PSE, demonstrating consistent profitability and meeting specific financial benchmarks.

Navratna companies enjoy enhanced financial autonomy, allowing them to invest up to ₹1,000 crore, or 15% of their net worth, on a single project without needing government approval, which facilitates quicker decision-making and project implementation.

According to recent data, 17 public sector enterprises in India have been granted Navratna status. Companies including Bharat Electronics, Container Corporation of India, Engineers India, HAL, MTNL, NALCO, NBCC, NMDC, Oil India, PFC, RINL, REC, RITES, IREDA, IRCON International, and Shipping Corporation of India.

The company has demonstrated consistent growth in its net profit over the last five financial years. Net profit, which was ₹471 crore in FY20, has significantly improved to ₹1,845 crore in FY24. Concurrently, its revenue from operations has surged from ₹4,905 crore in FY20 to ₹9,467 crore in FY24. Reflecting this growth, MDL distributed an interim dividend of Rs. 262.45 crore for FY 2023–24.

As of March 31, 2024, the company's order book stands at ₹38,561 crore. During FY24, it secured contracts to build three 7,500 DWT multi-purpose hybrid-powered vessels for a European client, valued at ₹353 crore.

MDL is a prominent defense public-sector undertaking shipyard under the Ministry of Defence (MoD), specializing in shipbuilding, submarine construction, and various engineering products. Since its establishment in 1934, the company has delivered 802 vessels, including 28 warships and 7 submarines, according to the Q4 FY24 earnings report.

Over the past three years, the company's shares have surged by 1541%. The shares are now trading 2774% above their issue price of ₹145 per share in October 2020.

It took nearly 34 months for the stock to surpass the ₹1,000 mark after its listing. Subsequently, it took just four months to cross the ₹2,000 mark in September 2023. By May, it had reached the ₹3,000 mark and then surged to ₹4,000 in June.

Meanwhile, Garden Reach Shipbuilders stock also jumped another 9.8% in today's trade to hit a new lifetime high of ₹2,137 apiece.

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