Mazagon Dock leads defense sector rally with 250% annual return

State-run Mazagon Dock Shipbuilders 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 Ltd (BEL), Hindustan Aeronautics Ltd (HAL), Bharat Dynamics, Bharat Heavy Electricals Ltd (BHEL), BEML, Paras Defence and Space Technologies, and Bharat Forge, 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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