Mazagon Dock Share Price Falls After Clarification On Submarine Deal

Mazagon Dock Shipbuilders Ltd., fell over 1% in Tuesday morning trade after the company issued clarification on the Rs 70,000-crore deal for six submarines deal. On Monday, the company issued a clarification stating that there are currently 'no negotiations' with the Defence Ministry for the Rs 70,000-crore deal for six submarines that are to be built in India with German support under 'Project 75 India'.

The clarification comes after news agency ANI reported on Sunday, quoting Defence officials, that the Centre has given clearance to Defence Ministry and Mazagaon Dock to begin negotiations. However, in an exchange filing on Monday, the shipbuilder said, "No negotiations have been commenced with Ministry of Defence for the project."

In January, the Defence Ministry selected the state-owned Mazagaon Dock for building six submarines with Air Independent Propulsion systems with Germany's ThyssenKrupp Marine Systems as its partner.

Shares of Mazagon Dock Shipbuilders fell as much as 1.66% to Rs 2,710 apiece. They pared losses to trade 1.58% lower at Rs 2,712.20 apiece, as of 9:18 a.m. This compares to a 0.46% decline in the NSE Nifty 50.

The stock has risen 25.35% in the last 12 months and 21.10% year-to-date. Total traded volume so far in the day stood at 1.51 times its 30-day average. The relative strength index was at 42.01.

Out of six analysts tracking the company, four maintain a 'buy' rating, and two suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 17.3%.