Stock in Action - Mazagon Dock

Stock in Action - Mazagon Dock
Stock in Action - Mazagon Dock

Fundamental & Technical Analysis
by Tanushree Jaiswal Last Updated: Apr 03, 2024 - 04:03 pm 188 Views
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Mazagon Dock Movement of the Day


Shipping company shares soared about 12% on Wednesday, headed by Mazagon Dock Shipbuilders, which reached a day high of Rs 2,225.25 on the NSE.

Why Mazagon Dock in Buzz?

Shares of shipbuilding and allied services businesses such as Cochin Shipyard, Mazagon Dock Shipbuilders, and Garden Reach Shipbuilders rose up to 10% on April 3 due to following:

1- High volumes,
2- Forecasts of solid Q4 profitability and 
3- Healthy order Book positions

The spike also follows a thematic analysis by domestic stockbroker Prabhudas Lilladher, which stated that technical indicate additional gain in these companies.

Why Defence Stocks Surging?

1.    Global geopolitical risks and India's growing emphasis on self-reliance are driving order flow and revenue growth for local defense industries, according to Jefferies analysts in their most recent study. 
2.    According to the brokerage, another advantage in the defense sector is the government's emphasis on developing country-to-country relationships to encourage exports. 
3.    Furthermore, the roughly twofold increase in domestic defense spending from FY24E to FY30E should continue to support market gains. 
4.    "We believe India's capital defence spend should continue at the 7-8 percent CAGR seen in the last decade while an indigenisation focus will drive double-digit growth in domestic defence spend," Jefferies said in a statement. 
5.    Exports are another potential possibility for the market, according to the international brokerage. According to the report, export defense opportunities might grow at a CAGR of 21 percent between FY23 and FY30E.

India's defense exports increased 16 times in FY17-24E to $3 billion, and Jefferies expects them to reach $7 billion by FY30E, with potential in the UAE, Bhutan, Ethiopia, Italy, and Egypt, among others.

Mazagon Dock shares rose 12% today; here's what experts think

1.    One should expect a further upward movement in the next days. 
2.    The RSI (Relative Strength Index) has risen sharply from the oversold zone, signaling a bullish trend reversal. 
3.    Experts recommend purchasing it with an upside objective of around Rs 2,500. "Keep the stop loss at around Rs 1,780,” advised.
4.    other analysts also shared positive views on Mazagon Dock. 
5.    Mazagon has recouped with strong volumes, suggesting a reversal from its short-term trend.

Expansion & Conclusion

1.    Orders booked more than 7,000 crores including Coast Guard, ONGC, and export orders
2.    Plans to develop Nhava yard, including Floating Dry Dock project
3.    Investment of approximately 500 crores for Floating Dry Dock over 2.5 years
4.    Expenditure of 300-350 crores per annum for infrastructures at Nhava yard
 

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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