Mazagon Dock’s Stock Surges 5.4% Post ₹1,145.10 Crore ONGC Order

Mazagon Dock's Stock Surges 5.4% Post ₹1,145.10 Crore ONGC Order

VoM News Desk | December 11, 2023 | 03:25 PM IST | Breaking News | Follow on Google News

Mazagon Dock’s Stock Surges 5.4% Post ₹1,145.10 Crore ONGC Order Image/Print

Mazagon Dock’s Stock Surges 5.4% Post ₹1,145.10 Crore ONGC Order

Mazagon Dock’s share price experienced a 5.4% surge in Monday’s trading session following the reception of a ₹1,145.10 crore order from Oil and Natural Gas Corporation Limited (ONGC). On the BSE, the stock opened at ₹2,140 per share, hitting an intraday high of ₹2,166.90 and a low of ₹2,115.

According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, although Mazagon Dock’s stock witnessed a gap-up opening, significant traction post-opening was not observed. Nonetheless, the stock appears to be establishing a base and anticipates an upward movement in the near term, with ₹2,300 as the next resistance and ₹2,000 as support.

Ruchit Jain, Lead Research Analyst at 5paisa, noted that Mazagon Dock Shipbuilders’ stock has been consolidating within a range in recent weeks, viewed as a correction within an uptrend. Support levels are identified at ₹2,030 and ₹1,900, maintaining a positive longer-term trend as long as these levels hold.

The awarded contract involves the Part Replacement of Pipeline Project (PRPP), aiming to install approximately 44.4 km of subsea pipelines across 19 segments, with completion expected by May 2024, as per the company’s filing.

In an exchange filing, the company stated that ONGC has awarded a turnkey contract to Mazagon Dock Shipbuilders Limited for PRPP at a total lump sum price of ₹11,45,10,47,012.06 (₹Eleven Hundred Forty-Five Crores Ten Lakhs Forty-Seven Thousand and Twelve and Six Paisa only), encompassing all taxes and duties.

While defence shipbuilding has been Mazagon Dock’s primary focus, brokerage ICICI Direct Research indicated the company’s exploration into energy and other civil contracts sectors. The new ONGC contract, expected to have relatively lower margins due to its turnkey nature, contributes to an order book estimated at around ₹37,000 crore, providing healthy revenue visibility from FY24-26E.

The brokerage emphasized the crucial developments to watch, including timely placements of large orders in defence shipbuilding segments like new destroyers, frigates, corvettes, ship-repair, and submarines (P-75I and additional three Kalvari class submarines).

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