Indian Defence Stocks: Mazagon Dock Up 6% As ICICI Securities Warns Of Potential 70% Drop

Last updated on August 26th, 2024 at 10:56 pm

Indian Defence Stocks News

Indian Defence Stocks News — https://x.com/MazagonDockLtd/media

After falling for three days, shipbuilding stocks are going up today. Mazagon Dock Shipbuilding has risen by 6%, and Cochin Shipyard and Garden Reach Shipbuilders have both increased by up to 5%.

Recently, defense stocks dropped after a long period of rising and reaching high levels, which had given shareholders strong returns. This drop is partly due to investors taking profits by selling their shares.

Mazagon Dock’s Q1 Margin Hits 27%, But Sustainability in Question: FY25 Forecast and Key Updates

The sell-off in defense stocks worsened after ICICI Securities released a report on August 16. The report suggested that shares of Mazagon Dock and Garden Reach Shipbuilders could potentially drop by more than 70% from their current prices.

Even though ICICI Securities has raised its target price for Mazagon Dock to ₹1,165 from ₹900, this still suggests a potential drop of 73% from Tuesday’s closing price. For Garden Reach Shipbuilders, the new target price is ₹515, indicating a 71% possible decrease from Tuesday’s closing price.

ICICI Securities expects Mazagon Dock’s EBITDA margin to stay strong in FY2025 and FY2026, especially if deliveries happen earlier than planned. However, they anticipate that the margins will drop once the current contracts are finished. In the June quarter, ” Mazagon Dock’s EBITDA margin was 27.3%, up from 7.9% the previous year, due to lower operating costs “.

ICICI Securities predicts that Garden Reach Shipbuilders’ earnings per share (EPS) will range from ₹55 to ₹65 up to FY2032. They also expect delays in fulfilling orders from Bangladesh because of current geopolitical tensions .

Disclaimer: This information is for educational purposes only and not investment advice. Always consult with a financial advisor before making any investment decisions.

Orient Technologies IPO Details: Valuation, OFS, and Grey Market Premium Insights