Mazagon Dock Shipbuilders shares jump 10%, hit new 52-week high. Here's why

economictimes.indiatimes.com:

Mazagon Dock Shipbuilders jumped 10% to Rs 1,584 in Tuesday's trade on BSE as the Defence Procurement Board (DPB) has cleared the acquisition of three additional Scorpene Submarines ahead of Prime Minister Narendra Modi's visit to Paris later this week. The DBP has cleared the acquisition of three additional Scorpene submarines, extending the current line of boats under construction. These submarines will be more advanced versions of the current class of boats built by the yard — five have been delivered, and the sixth is expected next year.

The DBP has also cleared the acquisition of Rafale M fighter jets ahead of the PM's visit to France. The three Super Scorpenes to be built will have indigenous Air Independent Propulsion (AIP) developed by DRDO and will have an indigenous content of close to 60%, resulting in significant technology transfer to MDL. Commercial negotiations will take place in the coming months, and the deal is expected to be valued at around Euro 4 billion.

In a meeting on Monday, the board has given a go ahead to the two deals, and an Acceptance of Necessity (AoN) is likely to be issued by the Defence Acquisition Council (DAC) on Thursday. The Prime Minister will hold bilateral talks in France on Friday, where the two programs are likely to find mention as well. At 10 am, the scrip was trading 8.4% higher at Rs 1,566 on BSE.

From its 52-week low of Rs 254, the stock has rallied 520%. Meanwhile, in the last one month, the stock has risen 50%. As per Trendlyne data, the average target price of the stock is Rs 806, which shows a downside of 49% from the current market prices.

The consensus recommendation from four analysts for the stock is a 'Hold'. Technically, the stock's day RSI (14) is at 79.7. The