Mazagon Dock Shipbuilders' shares surged over 2% in early trade. Order book strengthened by follow-on orders for the P-75(I) submarine project. Brokerage initiated BUY rating with a target price of Rs 3,858.
Mazagon Dock Stock: Shares of Mazagon Dock Shipbuilders, a prominent company in the defense sector, rose by over two percent in early trading on Thursday. This surge was observed after the commencement of discussions for the Indian Navy's submarine project P-75(I). The company informed the stock market that six indigenous submarines will be constructed under this project.
Significance of Submarine Project P-75(I)
The P-75(I) submarine project is strategically important for the Indian Navy. This project will strengthen India's indigenous defense production capabilities. Mazagon Dock Shipbuilders has initiated discussions with the Indian Navy for this project, which has boosted investor confidence.
Brokerage's BUY Rating and Target Price
Antik Stock Broking has maintained its 'BUY' rating on Mazagon Dock Shipbuilders. The brokerage has set a target price of Rs 3,858 for the stock, which is approximately 40 percent higher than the current trading price of Rs 2,755. The rationale behind this rating is that the follow-on orders for submarines will strengthen the company's order book and drive revenue growth in the medium term.
Stock Performance and Past Returns
Mazagon Dock Shipbuilders' stock has shown b performance in recent months. The share price has increased by 6.56 percent in two weeks. It moved up by approximately 4 percent in one month, while a decline of 15 percent was observed over three months. In six months, the stock has given a return of 24 percent, and 30 percent in one year. In the long term, this stock has provided good returns to investors.
Long-Term Returns and Market Cap
In the last two years, the stock has delivered a return of 146 percent. Whereas, an impressive return of 1,230 percent has been recorded in three years. On May 29 of this year, the stock touched its 52-week high of Rs 3,778. Its 52-week low was Rs 1,917. The company's total market capitalization on BSE stands at Rs 1,12,139 crore.
Order Book Strengthened by Follow-On Orders
According to the brokerage, follow-on orders for three Scorpene submarines and six P-75(I) submarines can significantly boost the company's order book. This will lead to increased revenue growth in the medium term. Previous quarterly margin volatility is now a thing of the past, and the stock has the potential for a long-term upward trend.
The brokerage clarified that their BUY rating on the stock is maintained with a target price of Rs 3,858. This is based on a P/E multiple of 44 times core earnings for H1FY28. Investors have been advised to invest in the stock by adopting a stop-loss strategy.
Current Status of the Stock
The company's share is trading in the range of Rs 2,780. Recently, buying interest has been observed in the market for this stock. Investor confidence has increased after a 27 percent correction in this stock. Experts suggest that if follow-on orders are received from the Indian Navy, the stock could surge by up to 40 percent.
