Stock Of The Day: Mazagon Dock Hits Record On 'Navratna' Status—Key Levels

Shares of Mazagon Dock Shipbuilders Ltd. jumped nearly 8% to a record high on Wednesday after it was granted the status of a Navratna.

The Department of Public Enterprises has approved the proposal in a letter dated June 25, according to an exchange filing.

The company's total order book stood at Rs 38,561 crore as of March 2024, of which 82% is from the shipbuilding segment.

• Resistance: Rs 4,271.2 (Life-high)

• Support: Rs 3,840 (1-week low)

Shares of the company surged 7.47% to hit record high of Rs 4,271.20 apiece, before paring gains to trade 6.33% high at Rs 4,225.60 apiece as of 11:15 a.m. This compares with 0.26% gain in the benchmark Nifty 50.

The share price has risen 228.98% in the last 12 months and 82.21% on the year-to-date basis. The total traded volume so far in the day stood at 2.6 times its 30-day average. The relative strength index was at 71.17.

Three out of the four analysts tracking Mazagon have a 'buy' rating on the stock and one suggests a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 78.3%.

Navratna status is a prestigious designation given to some high-performing public sector enterprises in India. Here's what it signifies:

• Navratna companies enjoy greater financial and operational freedom when compared to the companies with Miniratna status.

• The companies can invest up to Rs 1,000 crore, or 15% of their net worth, on a single project without seeking approval from the Government of India.

• They can make investments up to 30% of their net worth in one year provided that it does not exceed Rs.1000 crores.

• They have the freedom to enter joint ventures, form alliances and float subsidiaries abroad.

The CPSEs which are Miniratna I, Schedule ‘A’ and have obtained an ‘excellent’ or 'very good’ MOU rating in three of the last five years and have a composite score of 60 or above in the following six selected performance indicators, are eligible to be considered for grant of Navratna status.

The six indicators include:

• Net Profit to Net worth.

• Manpower Cost to total Cost of Production or  Cost of Services

• PBDIT to Capital employed.

• PBIT to Turnover.

• Earning Per Share.

• Inter Sectoral Performance.