Mazagon Dock Stock Split: Upcoming Corporate Action for Zero-Debt Defence Firm

Shares of Mazagon Dock Shipbuilders Ltd, a multibagger defence stock, surged 4.14% intraday to ₹5,051 in today’s session, up from its previous close of ₹4,849.80 on the BSE. The stock is trading well above its 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day moving averages, indicating strong momentum.

Details of the Stock Split

For the first time in its history, Mazagon Dock will undergo a stock split at the end of this month. The stock will trade ex-split in a 1:2 ratio, meaning each fully paid equity share with a face value of ₹10 will be subdivided into 2 equity shares with a face value of ₹5 each. The record date to determine shareholder eligibility for the split is set for Friday, December 27, 2024.

This corporate action comes after a stellar performance by the stock, which has delivered 139% returns in a year and a whopping 499.35% returns over two years. Year-to-date, the stock is up 119%.

Market Activity and Technical Insights

In today’s session, approximately 0.54 lakh shares changed hands, generating a turnover of ₹27.05 crore. The stock has nearly tripled from its 52-week low of ₹1,797.10, recorded on March 14, 2024.

Relative Strength Index (RSI): At 65.5, the RSI signals that the stock is neither overbought nor oversold.
Beta: The stock’s beta of 1.6 indicates high volatility.
Support & Resistance: Analysts like Jigar S Patel from Anand Rathi suggest a support level at ₹4,700 and resistance at ₹4,900. A decisive move above ₹4,900 could propel the stock towards ₹5,100, with the expected short-term trading range between ₹4,650 and ₹5,100.

Brokerage Recommendations

Axis Securities included Mazagon Dock in its top technical picks, highlighting a medium-term support base around ₹3,830, at the 50% Fibonacci retracement of its rally from ₹1,795 to ₹5,830. Axis Securities projects short-term target levels of ₹4,965 and ₹5,085.

JP Morgan, however, maintains a neutral stance with a price target of ₹4,248, reflecting a cautious outlook.

About Mazagon Dock Shipbuilders

Mazagon Dock Shipbuilders Ltd (MDSL) is a leading defence public sector undertaking under the Ministry of Defence (MoD). It specializes in constructing and repairing warships, submarines, and other vessels, including cargo ships, multipurpose support vessels, tugs, dredgers, and water tankers for commercial clients.

Should You Buy?

Mazagon Dock’s robust performance, upcoming stock split, and strong technical outlook make it an attractive option for many investors. However, the stock’s high volatility and recent rally warrant caution. As always, potential investors should align their decisions with their risk appetite and consult a financial advisor.