The management, in a media interaction, has given the revenue guidance of 25-30% growth for FY23E. They said the current order-backlog of | 42000 crore will get executed over the next three to three and a half years
Please share where they have said 3-3.5 years. Last time i heard they said by 2026-2027. looks impossible in 3 years
Discl: Invested and may be biased
Key takeaway from concall -
Current order book - 39000 to be completed by FY 2028
Prospective order for which the company might get in near future - 80000+60000=140000 cr
Rarely do we see a company guiding for revenue visibility for next 10 years with fixed margins! Thats Mazagon Dock for you!
Invested since RK damani and Ramesh Damani sir entered in 2021
These are all future plans. The stock has run up very fast…
You may exercise caution for fresh buy at such high level.
Moreover, L&T also has such an agreement with US Navy. It is not very clear what is the kind of jobs to be done by both MDL & LnT for US Navy.
And the maintenance contract size , value not known
Discl: invested at low
level .Not a buy or sell recommendation
Pak gets Chinese Submarine. India flexes it’s muscle with 2,00,000 Crore plan to counter Dragon in Indian Ocean.
India is forced to augment it’s Navy fleet. While this may Augur well for defence stocks for next one decade, if Modi Govt’s Strategy of Atma nirbhar Bharat and increased defence budget continues.
In my view , even if there is change in Govt at center , i don’t think anyone will ignore our nation’s defence capability and cut defence spends.
However , the stocks have run up quite a lot during last one year when the stocks were available @10-12 P/E. Currently all the 3 shipping stocks are trading at near to all time high @ 40 P/E discounting future earnings and market would like to watch next few quarters to re-rate.
(1) Though the Q1 performance was very good. we should not expect the same performance Sequentially though annual growth could be expected due to long gestation period of ships.
Any degrowth could lead to drop in price could be a buying opportunity or any sharp correction in mid cap sector could lead to price drop.
(2) The plan to augment the fleet need to get converted in to order from Navy and the order needs to be executed and execution should result in to profit for which market would like to see.
(3) PSU’s normally slow in execution, but these 3 companies have capability to execute and urgent defence requirement could force them to execute.
discl: invested at low level and still holding, no transaction since last 2 months. not a buy sell recommendation. Pl do your own assessment before buying & selling
Mazagon Dock Shipbuilders to construct Defence Ministry’s Coast Guard Training Ship for Rs 2,310 crore.
Mazgaon Dock successfully commissions its latest Stealth Guided Missile Destroyer ‘INS Imphal’ at the Naval Dockyard in Mumbai
Discl : Invested at lower level in my basket of defence stocks that include Shipping stocks, holding since last two and half years. Not a buy or sell recommendation. PL do your own assessment before investing. PSU stocks carry an inherent risk of frequent changes in govt policy. However market is discounting the election results in favour of ruling party and hence continuance of govt policy of Atma Nirbhar Bharat.