Mazagon Dock Stock: 650% Returns & Rising FIIs - Time to Join the Voyage?

Mazagon Dock Shipbuilders Ltd. (MDL) has been around since 1774 and is a respected shipyard in India. It started as a small dry dock but has grown into a prominent shipbuilding company, making 801 vessels, like warships and submarines, since 1960. Nowadays, investors are buzzing about it because its stock has gone up by more than 650% in just two years.

Charting the Upward Trajectory

Glancing at the weekly chart, MDL's stock has embarked on a significant uptrend.

From trading near ₹270 per share in December 2021, the stock has climbed to ₹2280.90 per share by December 29, 2023. Notably, the range of ₹2400 to ₹2500 marks a crucial point, representing the previous all-time high and a psychological threshold. Sustaining at these levels could signal a higher trajectory. Contributing to this ascent are factors such as rising Foreign Institutional Investors (FIIs) interest, India's anticipated rise as the 3rd largest economy, robust fundamentals, a market cap of ₹46003 crore, and the company's nearly debt-free status.

Quarterly Triumphs

MDL's quarterly results unveil a commendable performance. Year on year, the topline surged by 7.36%, with profits witnessing an impressive 55.62% uptick. Despite a slight dip in revenue (15.88%) from the previous quarter, the profit margin continued its ascent, growing by 5.9%. Operating income displayed resilience, up by 2.95% quarterly and a staggering 57.52% annually. Notably, the earnings per share (EPS) for Q2 FY24 stands at ₹16.5, marking a substantial 55.51% YoY increase.

The Company's Winning Streak

MDL's merits are not confined to its stock performance alone. The company has diligently reduced its debt, positioning itself as virtually debt-free. Furthermore, it boasts an impressive 19.5% Compound Annual Growth Rate (CAGR) in profit over the last 5 years. Investors also find solace in MDL's commitment to a healthy dividend payout, currently at a robust 30.2%. The company's debtor days have witnessed a favorable shift from 66.0 to 46.7 days, reflecting improved financial efficiency.

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