Stock of this state-run shipbuilder has zoomed nearly 100% in last 6 weeks- QHN

Shares of state-owned shipbuilding company Mazagon Dock Shipbuilders (MDL) continued their northward movement on Monday as they gained 5 per cent to hit a new high of Rs 819.25 on the BSE.

The stock was quoting higher for the fifth straight trading day, having surging 29 per cent during this period. In the past six weeks, the market price of MDL has nearly doubled (up 99 per cent) from a level of Rs 412.25 on September 27, 2022, BSE data shows.

In the last three months, it has zoomed 196 per cent as compared to a 4.5 per cent rise in the S&P BSE Sensex.

At 12:23 pm; MDC was trading 2.4 per cent higher at Rs 800 vs a 0.02 per cent gain in the Sensex benchmark index. A combined 7.2 million shares had changed hands on the counter on the NSE and BSE till this time.

MDL is principally engaged in building and repairing of ships, submarines, various types of vessels and related engineering products for its customers. The company is India’s only shipyard to have built destroyers and conventional submarines for the Indian Navy; one of the initial shipyards in India to manufacture Corvettes (Veer & Khukri Class) in India.

The board of directors of the company are scheduled to meet on Thursday, November 10 to consider and approve unaudited financial results for the quarter and half year ended September 30, 2022. The board will also consider declaration of interim dividend, if any, for the financial year 2022-23 (FY23).

For the April-June quarter of FY23 (Q1FY23), MDL had reported a 134 per cent year-on-year (YoY) jump in its standalone profit after tax (PAT) at Rs 217 crore. Revenue from operations grew 84 per cent YoY to Rs 2,230 crore.

For Q2FY23, analysts expect MDC to post YoY revenue growth of 20 per cent to Rs 1,884 crore led by better execution of existing projects of P-75 submarines, P-15B destroyers and P – 17A frigates.

EBITDA margin is expected to be at 5.5 per cent (similar to Q2FY22) as better operating leverage will be negated by higher sub-contracting charges to DCNS Naval Group, resulting in an absolute EBITDA growth of 21.7 per cent YoY to Rs 103.6 crore.

Order backlog was at Rs 43,343 crore as of August 2022 (6.4x TTM revenues), of which Rs 19,795 crore of backlog is in project-17A (Nilgiri class frigates), Rs 18,897 crore in Project-15B (Visakhapatnam class Destroyers), Rs 4,400 crore in Project-75 (Kalvari class submarines), ICICI Securities said in its result preview.