Mazagon Stocks Delivered 31% Returns in One Month; Crossed Rs 1000 Mark!

6 June 2023
3 mins read
Leading player in the shipbuilding industry in India, the company has delivered multi-bagger returns of over 268% in the past year.
Mazagon Stocks Delivered 31% Returns in One Month; Crossed Rs 1000 Mark!

Mazagon Dock Shipbuilders – Company profile

Mazagon Dock Shipbuilders Ltd’s main focus lies in the construction, repair, and manufacturing of ships, submarines, different types of vessels, and associated engineering products for clients both within India and abroad. Originally established as a private company in 1934, it later came under the ownership of the Government of India in 1960.

MDL holds the distinction of being India’s sole shipyard that has successfully constructed destroyers, conventional submarines, and corvettes for the Indian Navy. Since its inception in 1960, MDL has accomplished the delivery of 801 vessels, including 27 advanced warships ranging from destroyers to missile boats and seven submarines. Notably, between 2017 and 2022, the company also fulfilled the delivery of 5 Kalveri Class Submarines to the Indian Navy. MDL prides itself on its world-class infrastructure, which enables the simultaneous construction of up to 11 submarines and 10 warships. As of March 31, 2023, the company’s total order book stands at Rs 38,755 crore. Moreover, the management anticipates receiving additional orders from the Indian Navy for submarines in the upcoming financial year, FY24.

Share price movements

Today, the Mazagon Dock stock has opened at Rs 1019, 3.2% up from the previous day’s closing of Rs 986.55 on BSE. Currently stock is trading at around Rs 1024. Over the last one-month company has delivered a return of 31% and the return of the last year would leave 268%. Its 52-week high and 52-week lows are Rs 1062 and Rs 229.65 respectively.

Currently, the stock is trading at almost an all-time high. The total market cap of the company is Rs 20642 crore. Promoters hold 84.83% of the company whereas FIIs and DIIs hold 3.29% and 0.30%, respectively.

Business performance

In the fourth quarter of FY23, MDL witnessed a remarkable surge in revenue, experiencing a 48.85% YoY growth from Rs 1396 crore to Rs 2079 crore. The company achieved an operating profit of Rs 211 crore, resulting in an operating profit margin of 10%. Its net profit for the quarter amounted got doubled from Rs 182 crore to Rs 400 crore. The best part is the net profit of the company is above Rs 400 Crores in the last two quarters.

In FY23, the company’s revenue showed a growth of 36.52% YoY from Rs 5733 crore to Rs 7827 crore. The company’s operating profit increased from Rs 442 crore to Rs 799 crore, with an operating profit margin of 10%. It is the first time the company achieved a double-digit operating profit margin. The company has also achieved a four-digit net profit of Rs 1119 crore.

MDL exhibits robust financial performance, with a ROCE of 32.6% and ROE of 26%. Over the past three years, the company’s revenue has grown at a CAGR of 33%. The company is almost debt free with a debt of only Rs 6 crore in their balance sheet as of FY23.

With the Government of India actively promoting the “Make in India” initiative and making substantial investments in the defence sector, the company possesses significant potential. Moreover, the defence sector’s stock is currently experiencing a surge in activity. Given the company’s robust order book and the anticipated influx of submarine orders soon, investors should closely monitor this stock as it holds promising prospects.