Defence PSU Stock PAT Rises 55%, ICICI Direct Assigns Hold Call, 1-Year Return 185%

Leading Defence public sector undertaking stock, Mazagon Dock Shipbuilders declared its Q3 results on January 30, 2023. The miniratna company reported a jump of 55% in its standalone net profit to Rs 337 crore on a 17% increase in revenue from operations to Rs 1,816 crore in Q3 FY 2023 over Q3 FY 2022.

Brokerage firm ICICI Direct has assigned hold call to Mazagon Dock Shipbuilders with a target price of Rs 1025 apiece showing an upside of 35%. Check details below:

1. Mazagon Dock Shipbuilders Q3 Result

The company's EBITDA (Earnings before interest, taxes, depreciation, and amortization) soared 46% to Rs 472 crore in Q3 from Rs 323 crore reported in the same quarter last year. The profit before tax of Mazagon Dock Shipbuilders for Q3 FY 2023 is declared at Rs 452 crore, up 49% from Rs 304 crore reported in Q3 FY 2022.

2. Mazagon Dock Shipbuilders Stock Performance & Return

The last trading price of Mazagon Dock Shipbuilders is Rs 761.30 apiece with an intraday gain of 5.54%. The stock's 52-week high is Rs 936.85 apiece and 52-week low is Rs 224.00 apiece on BSE, respectively.

The company has a market capitalisation of Rs 15,354.66 crore. The stock gave a return of 19% in last 3-months, 185% in last 1-year, and declined 3% in last 3-months.

3. Valuation

According to ICICI Direct in its December 6, 2022 report, "We expect MDL to deliver earnings CAGR of 24% in FY22-24E led by 18% revenue CAGR (on better execution) and sustainable margins. We downgrade our recommendation on the stock from BUY to HOLD. We value MDL at Rs 1025 on 22x P/E on FY24E EPS basis.

4. About Mazagon Dock Shipbuilders

Mazagon Dock Shipbuilders (MDL) is engaged in the construction and repair of warships and submarines for the Ministry of Defence (MoD) to be used by the Indian Navy along with other vessels for commercial clients. MDL is India's only shipyard to have built destroyers and conventional submarines for the Indian Navy.

Over the last 10 years, MDL's revenue increased at 10.5% CAGR over FY13- 22 while EBITDA and PAT increased at 3.6% and 3.9% CAGR, respectively, during the same period due to a fall in operating margins.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.