Mulitbagger Stock: Mazagon Dock share hits life high on strong Q2 results, dividend declaration – Expert answers whether investors should buy, sell or hold

Multibagger Stock, Interim Dividend, Record Date: Mazagon Dock Shipbuilders share price on Wednesday touched a new lifetime high of Rs 877.9 per share on the exchanges. The stock has gained nearly 11 per cent after surging for three sessions in a row amid strong second-quarter earnings this fiscal and a dividend announcement. 

This defense-related counter has given multibagger returns in the last six months. It surged over 195 per cent or around 3 times during the said period – from Rs 292.7 to Rs 866.25 apiece on the NSE.

To put it in perspective, if an investor could have bought around Rs 1 lakh shares of Mazagon Dock six months ago, he/she would have received nearly triple returns to Rs 3 lakh today.

Mazagon Dock: Q2 Performance

State-owned Mazagon Dock reported 58 per cent year-on-year growth in its consolidated profit after tax (PAT) to Rs 213.90 crore in the July-September quarter of the financial year 2022-23 (Q2FY23) as compared to Rs 135.03 crore in the same period a year ago.

The company’s revenue from operations, as per its exchange filing, surged over 8 per cent to Rs 1,702.36 crore in Q2FY23 as against Rs 1,570.11 crore in the corresponding period of last fiscal.

Mazagon Dock: Interim Dividend

Along with Q2 earnings, the company also announced an interim dividend, which is at 91 per cent, of Rs 9.10 per share, aggregating to Rs 183.54 crore. It declared – Tuesday, 22 November 2022 – as the record date for reckoning the eligibility of shareholders for payment of the dividend.

Mazagon Dock: Expert Analysis

TradeSwift Director Sandeep Jain is bullish on the overall defence sector, as well as on Mazagon Dock. According to him, the valuations of this stock are attractive, fundamentals are strong and likely to reach new highs in the coming months.

The market analyst suggests 'Hold' for existing investors and 'buy on declines' for new investors. He advises new investors should wait for the stock to consolidate at a level of Rs 600-700 apiece as the risk-reward ratio is not favorable according to analyst.

Mazagon Dock: Fundamentals

The company has a market capitalization of around 17,500 crores. The promoter – Government of India - holds around 84.83 per cent stake in the company, while the rest is held by non-institutional Investors and Qualified Institutional buyers (QIB).

The share trades at around 3-4 times the book value at a PE of 19.65 times as per the latest financials against the industry PE of around 18.96 times. The company has been continuously reporting an ROE (return on equity) in the range of 13-21 per cent and an ROCE (return on capital employed) of 18-34 per cent over the past few years. Mazagon Dock is a Debt Free company.

About Mazagon Dock

Mazagon Dock builds and repairs ships, submarines, engineering products, and vessels for domestic as well as international clients. It has grown to become a multi-unit and multi-product company, which uses modern techniques and sophisticated products. 

Since 1960, the company has built 799 vessels, which include 26 warships, from modern destroyers to missile boats and six submarines. The company has been actively delivering passenger ships, cargo ships, multipurpose support vessels, among others to India and the world.