By Aritra Banerjee
In a remarkable development that echoes the buoyancy of India’s defence sector, shares of the government-owned Mazagon Dock Shipbuilders Limited (MDL) surged 7.7%, hitting a fresh 52-week high of INR 1,342 per share in Monday’s trading. This surge follows the shipbuilding major’s announcement of a lucrative contract with the Indian Navy, worth INR 2,724.63 crore, which sparked a flurry of investor enthusiasm in the market.
The leading defence public sector undertaking (PSU) saw its stock rocket upon signing this significant contract for the Medium Refit cum Life Certification (MRLC) of the Shishumar class submarine INS Shankush. The submarine, a formidable Sub-Surface Killer (SSK) class member, is set to be re-fitted at MDL facilities. This venture will enhance its combat capability and reconfirm the company’s pivotal role in India’s defence apparatus.
MDL, a Ministry of Defence (MoD) undertaking, is renowned for producing warships and submarines for the Indian Navy. This contract is a testament to its capabilities and an affirmation of the Indian government’s faith in the domestic shipbuilding giant.
The company’s stock performance has been stellar, with a remarkable gain of nearly 102% over the past three months alone. The stock has jumped 67.4%, and in one year, the shares of MDL have escalated a staggering 435.2%, marking the defence stock as a multi-bagger.
The refit of INS Shankush is expected to bring about a wave of economic benefits beyond the immediate surge in MDL’s stock. The project involves more than 30 Micro, Small and Medium Enterprises (MSMEs), with the company as the lead contractor. This multi-faceted participation is estimated to generate employment of 1200 man-days per day for the project duration, offering a much-needed boost to the employment landscape.
The Indian Navy, in its statement, anticipates that INS Shankush will rejoin its active fleet with upgraded combat capability. “This project is an important step towards the development of MDL as a Maintenance, Repair and Overhaul (MRO) Hub for supporting the industrial ecosystem of India,” asserted a navy spokesperson, further highlighting the strategic importance of this venture in the broader scope of India’s defence industry.
These developments paint a picture of a robust defence sector driven by strategic collaborations, technological enhancements, and a commitment to economic growth. As MDL continues to ride the wave of success, it showcases India’s public sector’s potential in driving the nation’s defence and economic ambitions forward.