This defence stock was trending on January 10

Shares surged 3.59% on Tuesday.

On January 10, the market traded in the red. The S&P BSE Sensex closed trading at 60115, 1.04% down, while NIFTY50 is down 1.03% and trading at 17914.15. Regarding Sectoral performance, Auto and Healthcare were outperformers, while Telecom and Banks were the top losers on the day. Regarding stock-specific action, Mishra Dhatu Nigam was among the top gainers in BSE group ‘A’.

The shares of Mishra Dhatu Nigam closed trading at Rs 223.45, 3.6% higher on the day. The stock opened at Rs 215 and so far, has made an intraday high and low of Rs 224.6 and Rs 215, respectively.

Mishra Dhatu Nigam manufactures superalloys, titanium, special-purpose steel and other special metals which are generally used in defence and aerospace applications. It is PSU where the central government controls 74% of the company’s stake.

The government established Mishra Dhatu Nigam Ltd in 1974 primarily to achieve self-sufficiency in the production of special metals and superalloys critical to the growth of the defence, space, and atomic energy sectors.

For FY22, the company reported a revenue of Rs 859 crore and generated a net profit of Rs 176 crore, while maintaining a healthy net profit margin of 20%. The company is available to achieve high profitability due to its highly customised value-added offerings.

As per FY22, the company has ROE and ROCE of 15.6% and 19.4%, respectively. It also has a healthy dividend yield of 1.38%.

About the shareholding pattern, 74% is owned by the Central government, 15.57% by DIIs, 0.52% by FIIs, and the rest 9.9% by non-institutional investors.

The company has a market capitalisation of Rs 4186 crore and is currently trading at a PE multiple of 23x. The stock has a 52-week high and low of Rs 268.85 and Rs 155.65, respectively.

The outlook for the company looks good in light of the Atmanirbhar Bharat initiative and the Government’s focus on the defence sector.