Rs 6.86/Share Dividend, 1200% Return: Defense Stock At Record High, Turns Rs 1 Lakh To Rs 13 Lakh In 3 Years

Mazagon Dock Shipbuilders is the leading shipbuilder in the nation. And strong order wins have made this defense stock an eye candy. In the trading week from September 4th to 8th, Mazagon Dock's share price recorded a nearly 17% rise on BSE. The stock also touched back-to-back new 52-week highs. On the back of strong bulls, investors of Mazagon Dock are sitting on a hefty wealth, especially the ones who invested during the listing period a little less than 3 years ago. Because Mazagon Dock shares have given more than 1,200% returns since listing. In 2023, so far alone, the stock rallied by over 180%. For instance, an investment of Rs 1 lakh in Mazagon Dock in October 2020, is now valued at nearly Rs 13 lakh.

On September 8, Mazagon Dock touched a record high of Rs 2,483 apiece. After the market hours, the stock ended at Rs 2,209.40 apiece, up by 5.83% on BSE. On this day, the stock rallied to as much as 18.9% before correcting as investors booked profits.

The strong surge can be attributed to the company's Master Ship Repair Agreement (MSRA) which it signed with the US Government represented by NAVSUP Fleet Logistics Center (FLC) Yokosuka. It is a non-financial agreement.

In the filing, it said, there are only two shipyards in the country including MDL that have signed MSRA. The agreement is expected to open up voyage repairs of US Navy Ships at MDL.

The deal also comes ahead of US President Joe Biden's arrival on September 8 to hold a bilateral discussion with Prime Minister Narendra Modi and attend the G20 summit.

As per the PMO's statement on Friday, both leaders applauded the conclusion of a second Master Ship Repair Agreement, with the most recent agreement signed by the U.S. Navy and Mazgaon Dock Shipbuilders, Ltd., in August 2023. Both sides recommitted to advancing India's emergence as a hub for the maintenance and repair of forward-deployed U.S. Navy assets and other aircraft and vessels. The leaders also welcomed further commitments from the U.S. industry to invest more in India's maintenance, repair, and overhaul capabilities and facilities for aircraft.

Mazagon Dock's shares have been gaining impressively since the start of the current year. So far in 2023, the stock zoomed by Rs 1,421.30 or 180.35%. But since its listing in October 2020, the stock breathtakingly skyrocketed by Rs 2,041.35 or 1,214.73%. From its IPO issue price of Rs 145, the stock has soared mightily by 1,423.72% or 15.2-fold till now.

For example, those investors let's say pumped in Rs 1 lakh in Mazagon Dock in October 2020, then currently, their investment value has jumped to over Rs 13.14 lakh. This mindblowing surge in corpus is in a matter of less than 3 years.

Mazagon Dock has a strong order pipeline ahead.

As of June 30, 2023, Mazagon Dock sits on an unexecuted order book of Rs 39,117 crore --- of which --- Rs 14,713 crore order value is in P15B destroyers, and Rs 17,843 crore in P17A Stealth Frigates. By the end of FY23, the company's operational order book stood at Rs 38,755 crore.

In the annual report of FY23, the company also announced its future outlook. In the infrastructure segment, Sanjeev Singhal Chairman & Managing Director said that the company plans to set up a green field shipyard at its Nhava Yard in a phased manner with short-term and long term development plans based on better visibility concerning large ticket orders.

Also, Mazagon Dock would be building a New Floating Dry Dock of 12000T capacity to undertake the construction of advanced and next-generation vessels.

Among the ongoing projects, Singhal said, " All efforts are being made to complete the balance vessels under each of these Projects, i.e., Project 75, Project 15B and Project 17A, MRLC of
SSK Submarines on priority."

He highlighted in the annual report that Mazagon Dock successfully delivered five Kalvari Class Conventional Submarines to the Indian Navy between 2017 and 2022. Further, the company also successfully delivered two Missile Destroyers to the Indian Navy one each in FY 2021-22 and FY 2022-23, the highlight being that both these Ships were delivered to the Indian Navy within the contractual timelines.

Earlier, on September 1, the company marked its 250 glorious years of existence with excellence and expertise with the launch of the fourth Stealth Frigate of Project 17A 'MAHENDRAGIRI'. With the launch of this mighty frigate, MDL continues its triumphant march towards self-reliance turning Aatmanirbhar Bharat into a reality.

Hence, a strong order book has made investors optimistic about this defense stock.

Furthermore, Mazagon Dock is set to pay a final dividend of Rs per equity share of Rs 10/- each (i.e. @ 68.60 %) for the financial year ending on March 31, 2023. The final dividend payout would be Rs 138.36 crore. Earlier, the company paid an interim dividend of Rs 9.10 per equity share of Rs 10/- each (i.e. @ 91 %) aggregating to Rs 183.54 crore in November last year.

For the final dividend, as per the regulatory filing, the Register of Members and the Transfer of Shares of the Company will be closed for the AGM and Dividend from 21 September 2023 to 27 September 2023 (both days inclusive) and the Company has fixed Record Date i.e. Wednesday 20 September 2023 for determining the eligible shareholders entitled to receive the final dividend.

Thereby, Mazagon Dock shares will turn ex-dividend on September 20, 2023.

Mazagon Dock Shipbuilders is one of the leading shipbuilding yards in India. 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.

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