Mazagon Dock Shipbuilders hits new high on heavy volumes; up 27% in 2 days

Shares Mazagon Dock Shipbuilders Limited (MDL) hit a record high of Rs 397.95 as they rallied 12.5 per cent on the BSE in Monday’s intra-day trade on the back of heavy volumes. The stock has surged 27 per cent in the past two trading days.

At 10:49 am, MDL traded 12 per cent higher at Rs 396, as compared to 1.4 per cent decline in the S&P BSE Sensex. The average trading volumes on the counter more than doubled with a combined 7.9 million equity shares, representing 4 per cent of the total equity of MDL, changing hands on the NSE and BSE, data shows.

MDL is one of India's four strategic defence shipyards and the only one to manufacture destroyers and submarines in India. It is a Defence Public Sector Undertaking (DPSU) under the Ministry of Defence (MoD).

The company is engaged in construction and repair of warships and submarines for the MoD for use by the Indian Navy/ Indian Coast Guard, and vessels for commercial clients with a maximum shipbuilding and submarine capacity of 40,000-DWT (deadweight tonnage). It is India’s only shipyard to have built destroyers and conventional submarines for the Indian Navy.

MDL operates mainly through two divisions: shipbuilding and submarine or heavy engineering. The shipbuilding division includes building and repair of naval ships, while the submarine and heavy engineering division includes building, repair and refits of diesel-electric submarines.

Meanwhile, in the past one month, MDL has outperformed the market as it surged 40 per cent after the company reported a healthy set of earnings and strong order book position. In comparison, the S&P BSE Sensex was up 0.7 per cent, during the same period.

MDL made strong start to the current financial year 2022-23 (FY23) with spectacular performance and reported best ever quarterly performance for the June quarter (Q1FY23). The company reported highest ever profit after tax (PAT) of Rs 217 crore, up 134 per cent year-on-year (YoY) from Rs 93 crore, in the year-ago period. Revenue from operations, too, grew 84 per cent YoY to Rs 2,230 crore from Rs 1,214 crore, a year ago.

During the April-June quarter 2022, MDL bagged 2 orders from the Container Corporation of India (CONCOR) to manufacture 2,500 shipping containers. The company initiated design annd development of indigenous midget submarine. The company also developed 6 pax, hydrogen fuel cell powered electric vessel in collaboration with Tata Advanced Systems.

For FY23, the company has an order book worth Rs 43,343 crore, which essentially comprises of four 15 Bravo missile guided destroyers, four 17 Alpha Stealth Frigates and six Scorpene submarines, of which four are already delivered. Similarly one destroyer is already delivered and the second one will be end of this month or mid of next month," MDL said in their Q1FY23 earnings conference call.