Multibagger stock: Up 955%, Mazagon Dock shares turned ₹10,000 into ₹1 lakh in 3 years; should you buy? | Mint
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Business News/ Markets / Stock Markets/  Multibagger stock: Up 955%, Mazagon Dock shares turned 10,000 into 1 lakh in 3 years; should you buy?
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Multibagger stock: Up 955%, Mazagon Dock shares turned ₹10,000 into ₹1 lakh in 3 years; should you buy?

Shares of defence firm Mazagon Dock Shipbuilders have given exceptional returns to their investors in the last 3 years. The stock surged from ₹218 in January 2021 to around ₹2,300 currently, rallying almost 955 percent in 3 years.

Mazagon Dock Shipbuilders: The stock surged from ₹218 in January 2021 to around ₹2,300 currently, rallying almost 955 percent in 3 years.Premium
Mazagon Dock Shipbuilders: The stock surged from 218 in January 2021 to around 2,300 currently, rallying almost 955 percent in 3 years.

Shares of defence firm Mazagon Dock Shipbuilders have given exceptional returns to their investors in the last 3 years.

The stock surged from 218 in January 2021 to around 2,300 currently, rallying almost 955 percent in 3 years.

This implies that an investment of 10,000 in this penny stock in January 2021 would have turned into 1.05 lakh this year.

Mazagon Dock stock price trend

The stock has been flat in January so far, up just half a percent, but extended gains for the third straight month. Before this, it rose over 13 percent in December 2023.

Read here: Praveg: This small-cap stock gained 47% in just 3 sessions amid ‘Chalo Lakshadweep’ wave

In 2023, the stock gave positive returns in eight months and was in the red in 4 months (February, March, August and October). It gave double-digit returns in 5 of those 8 months it was positive in.

The stock rallied the most in June, up over 54 percent, followed by July, up over 52 percent and September, up 18.5 percent.

Meanwhile, it shed the most in October, down 10.3 percent, followed by February, down 9.3 percent, and March, down 7.8 percent.

Currently trading around 2,300, the stock is over 7 percent away from its record high of 2,483, hit on September 8, 2023. Meanwhile, it has skyrocketed over 275 percent from its 52-week low of 612.80, hit on March 27, 2023.

Read here: Titagarh Rail: The stock gained 367% in 2023; is there more upside ahead?

Meanwhile, in the last 1 year, it has surged 175 percent.

Amid the Indian government's concerted efforts to bolster self-reliance in defence, particularly through initiatives like 'Make in India,' the defence sector has become a focal point of heightened market interest. 

Notably, Mazagon Dock, a key player in the sector, has emerged as a standout performer, garnering attention for its role in advancing indigenous manufacturing and contributing to the country's defence capabilities. The government's emphasis on domestic production and self-sufficiency has spurred a positive trajectory for companies like Mazagon Dock, reflecting a broader commitment to fostering a robust defense ecosystem within the country.

Recently, the shipbuilding company inked a contract worth 1,600 crore with the acquisition wing of the Ministry of Defence for the construction and delivery of six next-generation offshore patrol vessels (NGOPVs) for the Indian Coast Guard (ICG).

Read here: 12.65 to 62.28: Penny stock turns multibagger in one year

The defence firm reported a 56 percent rise in consolidated net profit at 333 crore in Q2 against 214 crore in the corresponding quarter of the previous year. Revenue from operations in Q2 rose 7 percent year-on-year to 1,828 crore against 1702 crore a year ago. The board also approved an interim dividend of 15.34 per share for the financial year 2023-24.

About Mazagon Dock

Mazagon Dock Shipbuilders Ltd is a shipbuilding and offshore fabrication yard. The company's major activities include shipbuilding, ship repairs and fabrication of offshore structures. It provides warships, merchant ships, submarines, support vessels, offshore platforms, passenger cum cargo vessels, trawlers, main and helidecks and barges.

Read here: Multibagger stock: Sadhana Nitro Chem shares delivered over 550% returns in 3 years

Brokerage view

Antique Stock Broking continues to remain optimistic about Mazagon Dock Shipbuilders. For the current order backlog, it estimates 27 percent capacity utilisation in submarine till FY25E as against the optionality of winning new orders (like P75I) and ramping up utilisation to 81 percent.

There are 1.3 lakh crore non-submarine works, where the company has an upper hand in winning repeat of P17A and NGD; and there are 100 billion+ medium-life refit orders that will keep the repair revenue intact, the brokerage noted.

With 3 units of the Scorpene class add-on orders, the brokerage forecasts a 21 percent/22 percent CAGR for revenue/ net profit over FY23– 26E. Margins were favorable in FY23, which could be headed for a decline in FY24, it said.

Read here: A 'must have' quality to buy 100x stocks in 2024

It has a ‘buy’ call on the stock with a target price of 2,774, implying a 20.6 percent upside.

 

Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.

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Published: 10 Jan 2024, 04:02 PM IST
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