Another interesting take is on Mazgaon Dockyard.
Mazgaon dockyard listing is quoting a premium of Rs.110. Expected to list at 235-240 with a 78% listing gain, we predict the investors will book profits in Mazgaon Dock.
Mazgaon being the only public sector defence shipyard constructing conventional submarines, the company is India’s only shipyard to have built destroyers and conventional submarines for the Indian Navy. The only risk associated with company is dependence on MOD for Defence orders, any decline, delay or reprioritization of funding under the Indian Defence budget or that of customers including the MoD for use by the Indian Navy could adversely affect its ability to grow or maintain its sales, earnings, and cash flow.
The revenues from the MoD contracts including the submarine refit contracts are subject to the satisfaction of certain milestones and are subject to termination. The company’s inability to fund such contracts at the time of inception or any termination of any of its contracts with the MoD could have a material adverse effect on its financial condition and results of operations.
Though the future growth and expansion of the company is limited by the location at which it operates.
Our view for Mazgaon Dockyard listing will have a gain of 78% list at around 235-240 we suggest to take listing gain in stock. Rationale for Listing gain profit booking in this company is predominantly depending on MOD. The revenues from the MoD contracts including the submarine refit contracts are subject to the satisfaction of certain milestones and are subject to termination. If we look at revenue of last 4 years which is grown at sluggish rate of 2.64% CAGR from 4886 Cr in 2016 to 5566 Cr in 2020 that was 568 in 2016 which fell down to 415 Cr due to fluctuation in costs of raw material. We are going positive on this in the wake of India’s take on strengthening the security measure, we recommend the investors will book profits. Our terminals are certainly going to be busy, says Ranjit Jha, Founder CEO Rurash Fin.