This shipbuilding company delivered over 169% returns in a year; do you hold it?

An investment of Rs 1 lakh in the shares of this company 1 year ago would have turned to Rs 2.69 lakh today. 

Mazagon Dock Shipbuilders Ltd, an S&P BSE SmallCap company, has delivered multibagger returns to its shareholders in the last one year. During this period, the company’s share price jumped from Rs 293.3 on 2nd May 2022 to Rs 790 on 3rd May 2023, an increase of 169% in the one-year holding period.    

Recent performance highlights 

In the recent quarter Q3FY23, on a consolidated basis, the company’s net profit increased by 68.68% YoY to Rs 337.26 crore. The company’s net sales increased by 16.97% YoY to Rs 1,815.91 from Rs 1,552.50 crore. 

The company is currently trading at a PE of 17.6X against the industry PE of 36.4X. In FY23, the company delivered an ROE and ROCE of 25.5% and 19.1%, respectively. The company is a constituent of Group A stocks and commands a market capitalization of Rs 15,861 crore. 

Company Profile 

Mazagon Dock Shipbuilders was incorporated in Bombay as a private limited company on February 26, 1934, as Mazagon Dock Private Limited with the Registrar of Companies, Bombay under the Indian Companies Act, 1913. The company is a defence public sector undertaking shipyard under the Department of Defence Production, MoD with a maximum shipbuilding and submarine capacity of 40,000 DWT, engaged in the construction and repair of warships and submarines for the MoD for use by the Indian Navy and other vessels for commercial clients. It is a wholly-owned GoI company, conferred with the 'Mini-Ratna-I' status in 2006, by the DPE.  

Growth Drivers 

Mazagon Dock Shipbuilders' business divisions in which the company operates are (i) shipbuilding and (ii) submarine and heavy engineering. Its shipbuilding division includes the building and repair of naval ships. It is currently building four P-15 B destroyers and four P-17A stealth frigates and undertaking the repair and refit of a ship for the MoD for use by the Indian Navy. Its submarine and heavy engineering division include building, repairing and refits of diesel-electric submarines. It is currently building/ in the process of delivering four Scorpene class submarines under a transfer of technology agreement with Naval Group as well as one medium refit and life certification of a submarine for the MoD for use by the Indian Navy. 

Share price movements 

Today, the share of Mazagon Dock Shipbuilders opened at Rs 781.90 and has touched a high and low of Rs 798 and Rs 774.85, respectively. So far 22,860 shares have been traded on the bourses. 

At the time of writing, the shares of Mazagon Dock Shipbuilders were trading at Rs 781.60, a decrease of 0.01% from the previous day’s closing price of Rs 781.65 on BSE. The stock has a 52-week high and low of Rs 936.85 and Rs 229.65 respectively on BSE.