Shares of shipping firms like Cochin Shipyard, Mazagon Dock surged up to 17 percent on July 4. They were among the PSU stocks that have seen a sharp rally lately as investors expect Budget 2024 announcements to boost the stocks further.
Veteran investor Raamdeo Agrawal believes that despite the recent upmove, PSUs are still trading in single-digit PE multiples.
The stocks also gained on account of strong Q1 earnings expectations. Antique Stock Broking in its June quarter earnings preview note said the combined sales of eight defence companies including Mazagon Dock, Cochin Shipyard, Bharat Dynamics, BEML, Hindustan Aeronautics, Bharat Electronics, PTC Industries and Garden Reach Shipbuilders & Engineers Ltd may jump 27 percent YoY.
The rise is expected, given the improvement in supply chain and swifter execution, supported by all-time high order book of multiple companies.
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The defence sector is currently enjoying a favorable environment, marked by government focus on defence indigenisation under the 'Make in India' initiative.
Shares of Mazagon Dock Shipbuilders Ltd. gained 17 percent to hit a fresh record high of Rs 5,550 on the National Stock Exchange (NSE), pushing the company's market cap beyond Rs 1 lakh crore. The stock has around 10 percent in the last five trading sessions.
The multibagger stock has more than doubled investors' money so far 2024, with gains of 138 percent. In the last one year, the stock has gained over 326 percent.
Cochin Shipyard shares jumped over 8 percent to hit a fresh record high of Rs 2,643.00 on NSE. The stock has clocked astronomical returns of over 820 percent in the last 12 months. Garden Reach Shipbuilders & Engineers shares rose over 4 percent to hit a high of Rs 2,574.95.
Shipping Corporation of India (SCI) stock gained over one percent, Dredging Corporation of India rose over 1.4 percent and SEAMEC shares were up 1.6 percent.
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