Mazagon Dock Shipbuilders witnessed a 5.4% increase in its share price during Monday’s trading session following the announcement of a ₹1,145.10 crore order from Oil and Natural Gas Corporation Limited (ONGC). The stock opened at ₹2,140 on BSE, reaching an intraday high of ₹2,166.90 and a low of ₹2,115.
Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, noted that Mazagon Dock’s share price exhibited a gap-up opening but lacked significant traction afterward. Despite the consolidation, Bhosale suggested a potential upswing in the near term, with ₹2,300 as the next resistance and ₹2,000 as support.
Ruchit Jain, Lead Research Analyst at 5paisa, stated that Mazagon Dock Shipbuilders’ stock has been consolidating within a range, representing a time-wise correction within an uptrend. The stock is expected to remain positive as long as it stays above ₹2,030 and ₹1,900.
The newly awarded contract, known as the Part Replacement of Pipeline Project (PRPP), involves installing approximately 44.4 km of subsea pipelines divided into 19 segments. The contract, valued at ₹11,45,10,47,012.06 (₹1,145.10 crore), is on a turnkey basis and must be completed by May 2024, as per the company’s filing.
While Mazagon Dock primarily operates in defence shipbuilding, ICICI Direct Research suggests that the company is exploring expansion into the energy and other civil contracts sectors. Despite potentially lower margins for turnkey contracts, the new order boosts the company’s order book to around ₹37,000 crore, providing robust revenue visibility for FY24-26E.
ICICI Direct Research highlighted that future developments to watch include the timely placement of large orders in defence shipbuilding, ship repair, and submarines (such as P-75I and additional three Kalvari-class submarines).”
