Mazagon Dock Shipbuilders, known for its multibagger status, saw its shares slip 2.21% on Tuesday, closing at ₹ 4221.95 on the BSE, compared to the previous close of ₹ 4317.35. Despite the dip, this stock has been a stellar performer, boasting a 116% rise in six months and a staggering 781% gain over two years. Such numbers raise the question: should you invest in stocks like Mazagon Dock, even during temporary declines?
What caused the dip?
Mazagon Dock shares fell after the company announced the commencement of production for the first Multipurpose Cargo Vessel (MPV) for Navi Merchants, Denmark. While the stock took a minor hit, the partnership signals long-term growth potential. Mazagon Dock has inked a contract worth ₹ 700 crore to build up to 10 vessels featuring hybrid propulsion drives for Navi Merchants. These ships will adhere to strict environmental standards, which could make the company a key player in the global green shipping industry.
High volatility but strong returns
Mazagon Dock shares come with a one-year beta of 1.4, indicating high volatility. This means the stock can experience significant price swings, making it a high-risk but potentially high-reward investment. However, if you’re looking to invest in stocks that offer long-term growth despite short-term volatility, Mazagon Dock’s track record is worth considering. Its relative strength index (RSI) stands at 44, showing the stock is neither overbought nor oversold, suggesting now might be a reasonable time to buy.
While Mazagon Dock shares are trading lower than their 5-day to 50-day moving averages, they remain above the 100-day to 200-day averages, indicating longer-term stability.
Key takeaways
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