Mazagon Dock’s share price bounced back by nearly 8 per cent on Wednesday after a prolonged downward streak. The multibagger defence stock has been trading in the red territory since the beginning of August, declining by almost 14 per cent on the National Stock Exchange.
The larger fall in the share price also came after brokerage firm, ICICI Securities projected a 77 per cent downside from its current market price. The brokerage maintained its "Sell" rating, citing concerns that the stock is overvalued at its present price.
At 01:45, Mazagon Dock shares were trading at Rs 4,587 price level, up by 6.69 per cent on the National Stock Exchange.
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However, the shipbuilder boasts a strong order book. The company secured a contract worth Rs 46.8 billion from ONGC in Q2FY25, which is expected to be completed by May 2026. It also won an export contract to build three multipurpose hybrid-powered vessels, valued at $43 million.
Margins appear strong and are expected to remain healthy through FY27E, as major deliveries are scheduled over the next 2-3 years, as per the report.
"Despite factoring in the potential orders of P75 (three additional submarines), P75I and next-gen destroyers, and margins at an elevated level in the near term, we believe the stock is overvalued at the CMP. In our view, while EPS is likely to be range bound at INR 95-120/share from FY28-32E, there are risks to ordering/execution timelines," the brokerage firm stated in its report.
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On year-to-date basis, Mazagon Dock has delivered robust triple-digit returns on the bourses.
However, the share price is down by nearly 20 per cent from its all-time high of Rs 5,860.
