This defence stock is in action on September 16; do you own it?

Shares of Mishra Dhatu Nigam are trading at 11% higher on the day. 

On September 16, the market is trading in red. At 1:15 pm, the S&P BSE Sensex is trading at 59037, 1.5% down. About Sectoral performance, Utilities and Power are outperforming, while IT is the top loser on the day. Regarding stock-specific action, Mishra Dhatu Nigam is among the top gainers in BSE group ‘A’. 

The shares of Mishra Dhatu Nigam are trading at Rs 225.85, as of 1:16 pm, 11% higher on the day. The stock opened at Rs 201.1 and so far, has made an intraday high and low of Rs 233 and Rs 201.1, respectively. 

Mishra Dhatu Nigam manufactures superalloys, titanium, special purpose steel and other special metals which are generally used in defence and aerospace applications. It is PSU where the central government controls 74% of the company’s stake. 

The government established Mishra Dhatu Nigam Ltd in 1974 primarily to achieve self-sufficiency in the production of special metals and super alloys critical to the growth of the defence, space, and atomic energy sectors. 

For FY22, the company reported a revenue of Rs 859 crore and generated a net profit of Rs 176 crore, while maintaining a healthy net profit margin of 20%. The company is available to achieve high profitability due to its highly customised value-added offerings. 

As per FY22, the company has ROE and ROCE of 15.6% and 19.4%, respectively. It also has a healthy dividend yield of 1.38%. 

About the shareholding pattern, 74% is owned by the Central government, 14.59% by DIIs, 0.51 by FIIs, and the rest 10.91 by non-institutional investors. 

The company has a market capitalisation of Rs 4117 crore and is currently trading at a PE multiple of 21.76. The stock has a 52-week high and low of Rs 233 and Rs 155.65, respectively. 

The company is able to achieve high profitability due to its highly customised value-added offerings.