New Delhi: On July 4, shares of Mazagon Dock Shipbuilders Ltd. jumped more than 20 percent, reaching a new high of Rs 5621 on the National Stock Exchange (NSE). This increase pushed the company’s market value over Rs 1 lakh crore.
Shipping companies like Cochin Shipyard and Mazagon Dock saw their shares rise up to 10% and 20% respectively. These public sector units (PSUs) have been rallying recently as investors expect positive news from the upcoming Budget 2024. Veteran investor Raamdeo Agrawal pointed out that even with the recent rise, PSUs are still trading at low price-to-earnings (PE) ratios.
The stocks also gained due to strong expectations for the first quarter earnings. According to Antique Stock Broking’s preview for the June quarter, the combined sales of eight defense companies, including Mazagon Dock, Cochin Shipyard, Bharat Dynamics, BEML, Hindustan Aeronautics, Bharat Electronics, PTC Industries, and Garden Reach Shipbuilders & Engineers Ltd., might increase by 27 percent compared to last year. This growth is due to better supply chains, faster execution, and record-high order books.
The defense sector is benefiting from the government’s focus on defense manufacturing under the ‘Make in India’ program. Mazagon Dock Shipbuilders Ltd. shares rose 20 percent to a new record high of Rs 5,621 on the NSE, boosting its market value to over Rs 1 lakh crore. The stock has has given investors a 140 percent return in 2024, with a 328 percent gain over the past year.
Cochin Shipyard shares surged over 10 percent, reaching a new high of Rs 2,679.00 on the NSE, giving an impressive 820 percent return over the past 12 months. Garden Reach Shipbuilders & Engineers shares rose over 4 percent to Rs 2,574.95.
Additionally, shares of the Shipping Corporation of India (SCI) increased by more than one percent, the Dredging Corporation of India rose by 1.4 percent, and SEAMEC shares went up by 1.6 percent.
