Mazagon Dock bags ₹1,600 cr contract; share surges 5%

Shares of Mazagon Dock Shipbuilders Ltd surged as much as 4.8% at ₹2108.45 apiece on the BSE today. The surge followed after it inked a contract with the Ministry of Defence's acquisition wing for over ₹1,600 cr. In contrast to this, the broader BSE exchange was trading 0.50% or 354.74 lower at ₹70151.57.

In the past week, the share has risen 0.51%, while it gained 5.73% in a month. In the  past 6 months, YTD period and 1 year, the stock has risen 72.49%, 167.02%, and 149.53% respectively.

Mazagon Dock Shipbuilders Limited (MDL) has entered into an agreement with the Ministry of Defence's Acquisition Wing for a substantial contract valued at ₹1,600 crore for  the construction and delivery of six Next Generation Offshore Patrol Vessels (NGOPVs) intended for the Indian Coast Guard (ICG).

As per the contract, the initial vessel is expected to be delivered within 41 months from the advance payment release date. Subsequent vessels are scheduled for delivery at intervals of five months.

In en exchange filing on December 8, Mazagon Dock said, “Oil and Natural Gas Corporation Limited (ONGC) has placed a notification of award of contract on December 07, 2023 on Mazagon Dock Shipbuilders for part replacement of pipeline project (PRPP) on turnkey basis at a total lump sum price of ₹1,145.06 crore, including all taxes and duties.”

In the recent quarterly financial update, Mazagon Dock Shipbuilders unveiled robust performance figures for the September quarter. The consolidated net profit surged by an impressive 56%, reaching ₹333 crore, marking a substantial growth from the ₹214 crore reported in the same quarter of the previous year. The company also experienced a 7% year-on-year increase in revenue from operations, totaling ₹1,828 crore in comparison to ₹1,702 crore in the corresponding period last year.

Furthermore, the firm reported a noteworthy 50% year-on-year rise in operating profit or EBITDA, reaching ₹177 crore during Q2 FY24. This growth in profitability also translated into improved margins, with the margin rate now standing at 9.7%. These financial indicators underscore Mazagon Dock's strong performance and financial health during the specified quarter.

It reported that in the past 12 months, Mazagon Dock has declared an equity dividend amounting to ₹22.20 per share, while it has declared 7 dividends since February 2021.

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