Mazagon Dock Shipbuilders Ltd (MDSL) is Indias leading defence public sector
undertaking shipyard under the Ministry of Defence (MoD). Mazagon Dock is
primarily engaged in constructing and repairing warships and submarines for
MoD and other types of vessels i.e. cargo ships, multipurpose support vessels,
barges and border outposts, tugs, dredgers, water tankers, etc. for commercial

Outlook & Valuation: In terms of valuations, the pre-issue P/E works out to 6.1x
FY20 earnings (at the upper end of the issue price band), which is lower vs.
peers like Garden Reach Shipbuilders and Cochin Shipyard (trading at 12.2x
and 6.6x of its FY20 earnings, respectively). Further, MDSL has healthy ROE of
~16% coupled with highest dividend yield (7.4%) and higher cash on balance
sheet among its peers. Hence, considering the above positive factors, we
recommend SUBSCRIBE to the issue with a long-term horizon.

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