Mazagon Dock Shares Jump 3.6% on Rs 70,000 Cr Submarine Deal Talks; Gains 30% In 6 Month; BUY This PSU Stock?

Mazagon Dock shares jumped about 3.6% at the opening bell today as both benchmarks also traded in the positive zone. This PSU defence stock is in sharp focus today after the government approved cost negotiations with Thyssenkrupp for building six submarines under the P-75(I) project, a deal estimated at nearly Rs 70,000 crore. Sensex and Nifty opened higher, helping this defence sector stocks outperform in today's trading.

Mazagon Dock Share Price Movement

At around 10:00 am, the Mazagon Dock share price was trading at Rs. 2,753.90 per share, up 1.98% on the BSE. The stock opened at Rs. 2,798, rising 3.6% from Friday's closing levels. On a monthly basis, Mazagon Dock shares have corrected about 4.4%, but they remain up almost 30% over the last six months.

Why Mazagon Dock Share Price Is Rising Today?

According to sources cited by CNBC-TV18, the Ministry of Defence has cleared Mazagon Dock Shipbuilders to begin cost talks with Germany's Thyssenkrupp Marine Systems for building six submarines under the prestigious Project 75(I).
The discussions, worth nearly Rs. 70,000 crore, are expected to start soon. If negotiations are successful, the contract is likely to be awarded to Mazagon Dock and Thyssenkrupp within six months.This is a major win for Mazagon Dock & Defence Sector, as it is expected to boost India's naval power.

A major boost for Mazagon Dock shares comes from its upcoming inclusion in the Nifty Next 50 index. As part of its semi-annual reshuffle, the NSE has announced changes to the Nifty Next 50, bringing in Hindustan Zinc, Mazagon Dock Shipbuilders, Siemens Energy, and Solar Industries. Meanwhile, InterGlobe Aviation (IndiGo), Swiggy, Dabur, and ICICI Prudential Life Insurance will exit the index. These changes will take effect from September 30, as per reports.

Mazagon Dock Share Price Target: 26% upside expected

Analysts believe the Mazagon Dock share price target could see further upside.

"The leverage from these large-scale contracts, combined with operational efficiencies from initiatives like Shipyard 4.0 and its digital transformation roadmap, should enhance margins and overall profitability. This valuation implies a target price of Rs3,540, thereby offering an upside of 26.9%. We maintain our BUY rating on the stock." As per an analyst from Nirmal Bang Institutional Equities.

Mazagon Dock Q1 FY26 Result

State-run shipbuilder Mazagon Dock Shipbuilders Ltd reported mixed earnings for the first quarter. The company's revenue rose 11.4% year-on-year to Rs 26.2 billion, showing steady business growth. However, profits didn't keep pace. The company's operating profit (EBITDA) dropped 53% YoY to Rs 3 billion, while net profit (PAT) fell 35% YoY to Rs 4.5 billion.

Nirmal Bang Institutional Equities, in its report, stated, "Mazagon Dock may face a weak first half of FY26, but performance is expected to improve from the third quarter onwards as key defence projects and submarine deliveries are scheduled.

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