1:2 Stock Split First Ever, Rs 23.19/Sh Dividend; BUY Debt-Free Defence PSU Mazagon Dock For Rs 5,483/TP

Zero-debt defence PSU giant with Navratna status, Mazagon Dock Shipbuilders recovered their previous losses on Wednesday, October 23, 2024, after the giant announced its first-ever stock split announcement and hefty interim dividend payout. This brings the opportunity to buy on dips. The recommendation in Mazagon Dock is to buy or hold.

Mazagon Dock Shipbuilders Share Price:

In the early trade, Mazagon Dock Shipbuilders witnessed a volatile start, however, rebounded soon after. Currently, the stock is up by 3.72% to trade at Rs 4322.20 apiece, up by Rs 162.25 or 3.90%. So far in the day, the stock is up by 4.4% to hit an intraday high of Rs 4344.55 apiece.

This is a strong recovery from its 10% drop on BSE on Tuesday.

Nonetheless, Mazagon Dock shares are still multi-baggers with gains of 137.5% on BSE compared to its 52-week low of Rs 1,742 apiece. While its 52-week high was at Rs 5,859.95 apiece. YTD, the stock is up by nearly 80% as of now.

Mazagon Dock Shipbuilders Stock Split:

The company has received approval for a stock split in the ratio of 1:2. This means the sub-division off of existing 1 (One) Equity Share of the face value of Rs.10/- (Rupees Ten Only) each fully paid up into 2 (Two) Equity Shares of the face value of Rs. 5/- (Rupees Five Only) each fully paid up.

Mazagon said the record date for above sub-division/ split of Equity Shares shall be decided after obtaining approval for sub-division/ split from the shareholders through postal ballot electronic voting process and will be intimated in due course.

The reason behind the stock split is to comply with DIPAM Guidelines on Capital Restructuring, encourage wider participation of small investors; and enhance liquidity of the Equity Shares of the Company in the Stock Market.

This is the first-ever stock split by Mazagon Dock.

Mazagon Dock Shipbuilders Dividend:

Apart from the stock split, the company has announced an interim dividend of Rs. 23.19 per equity share of Rs. 10 each fully paid up for the financial year 2024-25.

For the upcoming dividend, Mazagon Dock has fixed Wednesday, 30 October 2024 as the "Record Date" for payment of the Interim Dividend on equity shares for the Financial Year 2024-25 and the payment of the Interim Dividend will be completed on or before 20 November 2024.

In FY24, the company paid up to 274.50% dividend worth Rs 27.45 per share.

Currently, it has a dividend yield of 0.66%.

Mazagon Dock Shipbuilders Stock Recommendation:

As per the Trendline data, the consensus recommendation from 2 analysts for Mazagon Dock Shipbuilders Ltd. is HOLD. EPS is expected to grow by 67.5% in FY25.

On the other hand, broker Antique Stock Broking has suggested BUY for a target price of Rs 5,483 apiece.

About Mazagon Dock Shipbuilders:

Over the years, MDL has earned a reputation for quality work and established a tradition of skilled and resourceful service to the shipping world in general and the Indian Navy & Coast Guard. It was incorporated as a Private Limited Company in 1934.

After its takeover by the Government in 1960, Mazagon Dock grew rapidly to become the premier war-shipbuilding yard in India, producing warships for the Navy and offshore structures for the Bombay High. It has grown from a single unit, small ship repair company, into a multi-unit and multi-product company, with significant rise in production, use of modern technology and sophistication of products.