Mazagon Dock Shipbuilders hits 52-week high on bagging 'Navratna' status

Shares of Mazagon Dock Shipbuilders soared up to 7.36 per cent, hitting its 52-week high of Rs 4269.75 per share on the BSE Wednesday’s early morning deals. The stock had hit it a 52-week low of Rs 1,223.05 on June 27, 2023. 

However, today’s uptick in the stock price came after the company bagged "Navratna" status from the Department of Public Enterprises, becoming India's 18th public sector undertaking (PSU) to receive this recognition.

With its recent financial performance, the company has now joined the ranks of other Navratna Indian companies such as NMDC, RVNL, IRCON and IREDA among others. 

As a Navratna company, Mazagon Dock has the authority to make investments up to Rs 1,000 crore without requiring approval from the central government. These companies can also invest up to 30 per cent of their net worth within a year, as long as it does not exceed Rs 1,000 crore.

Additionally, Navratna status grants Mazagon Dock the privilege to form joint ventures, alliances, and establish subsidiaries abroad, providing them with greater flexibility and autonomy in their business operations.

To achieve Navratna status, a company must meet strict financial criteria over three consecutive years. This includes reporting a net profit exceeding Rs 5,000 crore annually, maintaining an average annual turnover of Rs 25,000 crore, or demonstrating an average annual net worth exceeding Rs 15,000 crore.

Mazagon Dock Shipbuilders., the state-run ship manufacturer, reported significant financial growth for the March quarter compared to the previous year. 

The company's revenue surged by 50 per cent to Rs 3,103.6 crore from Rs 2,078.6 crore in the same period last year. Net profit more than doubled to Rs 663 crore, up from Rs 326 crore a year ago.

At 09:48 PM; the share of the company pared some of its gains and was 4.49 per cent higher at Rs 4155 per share on the BSE. By comparison, the BSE Sensex was trading flat, down marginally by 0.05 per cent higher.

The shares of the company are presently trading at a price to earnings multiple of 43.46 times with an earning per share of Rs 91.50.