Multibagger Mazagon Dock Shipbuilders' share price jumps 14.5% to hit all-time high: Should you buy, sell or hold?

Stock Market Today: Multibagger Mazagon Dock Shipbuilders' share price rose 14.5 per cent to scale an all- time high of ₹2,794 on Friday on the NSE, before closing with gains of 12.18 per cent at ₹2,737. The Mazagon Dock Shipbuilders' share price, having risen 250 per cent in a year and 1529 per cent in five years, has given multibagger returns to investors.

The confidence in defence stocks remains high with rising capex and the government's ‘Make in India’ initiative, along with rising export orders. These factors seem to have boosted Mazagon Dock Shipbuilders' share price. 

Also Read- HPCL , BPCL, IOC share price decline 9-15% from their 52-week high: Buy, Sell, or Hold the stocks post soft Q4 results?

Strong Q4 expectations

Expectations remain high from Mazagon Dock Shipbuilders. Analysts at Antique Stock Broking expect 19 per cent year-on-year growth in net profit to ₹378 crore in Q4 with strong improvement in operating performance. The Earnings before Interest Tax Depreciation and Amortisation (EBITDA) are likely to grow 45 per cent year on year to ₹304.4 even though the revenue may remain flat. 

Mazagon Dock Shipbuilders remains among the four top picks of Antique Stock Broking in the defence sector.

Strong order book

Analysts at Anand Rathi Research say Mazagon Dock Shipbuilders' order backlog of about ₹40,000 crore, which translates to five times trailing twelve-month revenues, could imply earnings growth at a CAGR of 20 per cent over FY23-26. 

Also Read- ICICI Securities is bullish on these 2 Tata Group stocks, sees up to 27% upside

Mazagon Dock Shipbuilders is well placed in the defence shipyards industry in terms of getting large-scale contracts for warships in future from the Indian Navy.

Anand Rathi analysts further noted that large-scale orders of next-generation destroyers (with an expected value of ₹50,000 crore) and the next phase of conventional submarines (with an expected value of ₹43,000 crore) give comfort in terms of future order inflows.

Top Edge pick of Anand Rathi 

Mazagon Dock Shipbuilder is a Top Edge pick of Anand Rathi with a target price of ₹3,400, indicating a 24 per cent upside from current levels of Mazagon Dock Shipbuilders share price at ₹2,737. They have given a time frame of 6-9 months and stop loss at ₹2,200. 

As per Anand Rathi Research, for the past 3-4 quarters, the Mazagon Dock Shipbuilders share price was consolidating in a rectangle band of ₹1,800  to ₹2,500.  Finally, there is a breakout from this range, and that too with exceptional volumes.

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