Shares of Mazagon Dock Shipbuilders Ltd. erased gains after rising nearly 5% on Wednesday, following its deal with the unit of ThyssenKrupp AG to build submarines for the Indian Navy.
The company has signed a memorandum of understanding with the German multinational conglomerate, ThyssenKrupp AG's marine arm, to jointly build submarines for the Indian navy.
ThyssenKrupp Marine Systems would contribute to the engineering and design of the submarines as well as the consultancy support, while Mazagon Dock Shipbuilders would take responsibility for constructing and delivering the respective submarines.
India looks to order six diesel-electric submarines at an estimate of $5.2 billion; the construction for the same is to take place in India and is expected to have significant local content.
Shares of the company surged 4.87% before giving up all its morning gains to trade 1.08% lower at Rs 1,018.05 apiece as of 12 p.m., compared with a 0.18% decline in the benchmark Nifty 50.
Total traded volume so far in the day stood five times its 30-day average. The RSI is 83, suggesting that the stock may be overbought.
Of the four analysts tracking the company, two maintain a ‘buy' rating, one maintains a ‘hold', and one maintains a ‘sell' on the stock, according to Bloomberg data. The average 12-month consensus price target implies a downside of 21.3%.
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