Mazagon Dock trades 3% higher on bagging Rs 310-crore defence order

Shares of Mazagon Dock gained 3.2 percent after the shipbuilder signed a deal with the defence ministry to build a training ship for the Indian Coast Guard (ICG) at a cost of Rs 310 crore.

As of 11.05am, Mazagon Dock Shipbuilders shares were trading at Rs 2,173.9, higher by 0.93 percent, on the NSE.

“This is the first dedicated training platform with integral helicopter capabilities that will provide basic sea training to 70 Coast Guard and other international under-trainee officers to prepare these budding mariners on the multi-dimensional maritime aspects of Coast Guard life,” The ministry said in a press release.

The training ship will have advanced and modern high-tech surveillance and monitoring systems. This will provide insight and expertise to the ICG cadets on challenges at sea while ensuring the security of coastline and offshore assets.

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For this project, the defence ministry said that the majority of equipment and systems will be sourced from indigenous manufacturers, including MSMEs, in an attempt to generate significant employment over a period of three years.

“While meeting the objectives of ‘Aatmanirbhar Bharat’, the contract would also boost the indigenous shipbuilding capability and help in bolstering maritime economic capabilities,” the release added.

Shareholding pattern, stock price movement

From its 52-week low of Rs 611.5 on October 17, 2022, the Mazagon Dock Shipbuilders stock price has surged 254.75 percent. During the same time period, the benchmark blue-chip Nifty 50 has risen 13.02 percent. However, the counter sees very high volatility, as indicated by its one-year beta of 1.81. With the current share price, the shipbuilder’s market cap is Rs 43,787.9 crore.

In an interaction with CNBC-TV18, the company’s Chairman and Managing Director Sanjeev Singhal said that the current order book stands at Rs 39,000 crore as of June 30 which will last 4-5 years. In June 2023, the firm reported a revenue of Rs 2,405.4 crore.

The firm’s promoter is the Centre, that has a 84.8 percent stake. As of the September quarter shareholding data, FIIs and DIIs have 3.7 percent and 0.4 percent stake in the company, while the public has a stake of 11.1 percent.