One of the Navratna Defence stocks engaged in the construction and repair of various types of vessels, including warships, submarines, and offshore platforms. The stock jumped 4.60 percent after receiving an order worth Rs. 1,990 crore from the Ministry of Defence
Stock Price Movement:
With a market capitalization of Rs. 92,142.08 crores, the shares of Mazagon Dock Shipbuilders Limited has reached an intraday high of Rs. 2,370.50 per equity share, rising nearly around 4.60 percent from its previous day’s close price of Rs. 2,266.25. Over the last five years, the company has delivered a return of 2592.79 percent.
What Happened:
Mazagon Dock Shipbuilders Limited has secured a Rs. 1,990 crore contract from the Ministry of Defence for the construction and integration of an air-independent propulsion (AIP) plug.
Developed by DRDO, this technology will enhance the underwater endurance of Indian submarines, particularly the Kalvari-class, improving stealth and operational efficiency. The integration of AIP systems supports India’s self-reliance in defense technology, aligning with the ‘Aatmanirbhar Bharat’ initiative.
Capacity Expansion Plans:
Mazagon Dock Shipbuilders Limited is undertaking two significant capex initiatives to enhance its capacity. The company has acquired 15 acres of land to build a shipbuilding and repair facility with a graving dry dock.
Additionally, it plans to develop a 40-acre site near Nhava Sheva for constructing large vessels, with an extended dry dock. These expansions will double the current capacity of 21 platforms, enabling increased production and operational efficiency.
Order Pipeline and Future Projects:
Mazagon Dock Shipbuilders Limited is poised for significant growth with a robust order pipeline. Key prospects include next-generation Corvette and Destroyers, an anticipated Rs. 27,000 crore Scorpène submarine order, and collaboration with TKMS for Project 75I submarines.
Currently, the company is executing 31 ship orders, including Indian Coast Guard and export projects, underscoring its maritime excellence
Operational Insights:
Mazagon Dock Shipbuilders Limited faced negative operating cash flow in the first half due to delayed payments but expects normalization by year-end. The company is executing six large platforms and smaller vessels, with margins stabilizing between 12%-15% for new projects.
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Project Deliveries:
Mazagon Dock Shipbuilders Limited’s ongoing projects include the delivery of five P-75 Scorpène submarines, with the sixth due by December 31, 2024. Three Project-15 Bravo destroyers have been delivered, with the fourth expected by year-end.
The first of 17 Alpha frigates is targeted for delivery by December 31, 2024. Three large vessels are set for delivery in FY25.
Recent quarter results and ratios:
Mazagon Dock Shipbuilders Limited’s revenue has increased from Rs. 1,828 crore in Q2 FY24 to Rs. 2,757 crore in Q2 FY25, which has grown by 50.82 percent. The net profit of Mazagon Dock Shipbuilders Limited has also grown by 75.68 percent, from Rs. 333 crore in Q2 FY24 to Rs. 585 crore in Q2 FY25.
Mazagon Dock Shipbuilders Limited’s revenue and net profit have grown at a CAGR of 32.74 percent and 55.62 percent, respectively, over the last three years.
In terms of return ratios, the company’s ROCE and ROE should be 44.2 percent and 35.2 percent, respectively. The debt-to-equity ratio of the company is to be 0.005x, which shows the company is almost debt-free. Mazagon Dock Shipbuilders Limited’s EPS is to be Rs. 63.7.
Company Overview:
Mazagon Dock Shipbuilders Limited (MDL) was established in 1774 in Mumbai and is a leading Indian shipbuilding company. Initially a small dry dock, MDL has transformed into a major shipyard and has constructed over 800 vessels, including warships, submarines, and offshore platforms since 1960.
Written By – Nikhil Naik
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