Mazagon Dock leads defense sector rally with 250% annual return

  • Stock Market News
Mazagon Dock leads defense sector rally with 250% annual return
Credit: © Reuters.

State-run Mazagon Dock Shipbuilders (NS: MAZG ) led a surge in Indian defense sector stocks on Tuesday, breaking a three-session losing streak. The company's shares reached Rs 2,219.90 ($1= Rs 83.15) on the National Stock Exchange (NSE), trading above their 50-day and 200-day moving averages despite market volatility. This followed the receipt of a Letter of Intent (LOI) for constructing Deadweight Tonnage (DWT) Multi-Purpose Hybrid Power Vessels from a European client.

Other defense stocks, including Bharat Electronics (NS: BAJE ) Ltd (BEL), Hindustan Aeronautics Ltd (NS: HIAE ) (HAL), Bharat Dynamics (NS: BARA ), Bharat Heavy Electricals Ltd (NS: BHEL ), BEML (NS: BEML ), Paras Defence and Space Technologies (NS: PRAF ), and Bharat Forge (NS: BFRG ), also rallied up to 3% as overall markets traded in the green.

Over 1.150 million shares of Mazagon Dock were traded on Tuesday, with a total value of Rs 25,1.52 crore (Rs 1 crore = $120,132). Momentum indicators such as the Relative Strength Index (RSI) and Money Flow Index (MFI) suggest potential for further upside in this multibagger stock, which has a one-year beta of 1.9.

The stock has delivered impressive returns of 250% over the past year, significantly outperforming the Nifty50 's gain of 14%. Year-to-date returns for Mazagon Dock stand at 176%.

This surge in defense stocks is attributed to the Indian government's emphasis on indigenization of the domestic sector, encouraging local manufacturing and reducing dependence on imports for defense equipment.

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