Mazagon Dock Shipbuilders, a zero-debt defence PSU stock, is going to be in focus in the next weeks of December as the heavyweight company will be splitting for the first time in its history. The stock split ratio is 1:2. Ahead of the sub-division, the multi-bagger PSU is recommended to BUY for an attractive target of Rs 5,513. The stock has rallied by more than 110% YTD.
Mazagon Dock Shipbuilders Share Price:
The PSU stock is currently at Rs 4849.80 apiece, with a market cap of Rs 97,815.62 crore. Its 52-week high and low are at Rs 5,859.95 apiece and Rs 1,797.10 apiece respectively.
YTD, the stock has zoomed by 112.35% on BSE, while in a year, the upside is strong by 133.01%. Mazagon Dock has been a multi bagger of BSE and NSE since last year.
BUY Mazagon Dock Shipbuilders:
As per Antique Stock Broking, It currently can construct 21 platforms concurrently (11 submarines and 10 ships across various stages) and is planning a long-term capex to develop the recently acquired 15 acres of land parcel into a shipbuilding and ship repair facility that would nearly double its capacity in about 4-5 years.
Further, the brokerage pointed out that the company's present order book stands at INR 398.7 bn with major projects on track to be executed in the next 2-3 years. The company has been nominated for three follow-on orders of Scorpene submarines (the first submarine expected to be delivered in six years, followed by the remaining two in the next two years). On the non-defence front, the focus is on shipbuilding and green energy platforms such as hybrid ferries, and green tugs, which offer decent opportunities for growth.
That being said, on the valuation, Mazagon Dock's note said, "The company's present order book stands at INR 398.7 bn with major projects on track to be executed in the next 2-3 years. Next-generation corvettes, follow-on orders for three Scorpene submarines, and six P75-I submarines might significantly push the order book higher and aid in topline growth visibility in the long term. We like the company's growth prospects and maintain a BUY rating with a TP of INR 5,513 (earlier INR 5,483) at a core target P/E multiple of 28x FY27 earnings."
Mazagon Dock Shipbuilders Stock Split:
The defence giant has announced a stock split in the ratio of 1:2. This means the sub-division off of existing 1 (One) Equity Share of the face value of Rs.10/- (Rupees Ten Only) each fully paid up into 2 (Two) Equity Shares of the face value of Rs. 5/- (Rupees Five Only) each fully paid up.
The record date to determine the eligibility of shareholders for the stock split is fixed on Friday 27 December, 2024.
About Mazagon Dock Shipbuilders:
Mazagon Dock Shipbuilders Limited, Mumbai, is one of the leading shipbuilding yard companies in India. Over the years, MDL has earned a reputation for quality work and established a tradition of skilled and resourceful service to the shipping world in general and the Indian Navy & Coast Guard. It was incorporated as a Private Limited Company in 1934. The company's current portfolio of designs spans a wide range of products for both domestic and overseas clients. Since 1960, MDL has built a total of 802 vessels including 28 warships, from advanced destroyers to missile boats and 7 submarines. MDL has also delivered cargo ships, passenger ships, supply vessels, multipurpose support vessels, water tankers, tugs, dredgers, fishing trawlers, barges & border outposts for various customers in India as well as abroad. MDL has also fabricated and delivered jackets, main decks of wellhead platforms, process platforms, jack-up rigs etc.
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