Shares of Mazagon Dock Shipbuilders Ltd rose 3% to touch a day’s high of Rs 2,798.90 on 25th August. This followed an important development in a key submarine project.

The Ministry of Defence has approved Mazagon Dock to begin cost negotiations with Germany’s Thyssenkrupp Marine Ltd. This is for building six submarines under the P-75(I) project. The deal, valued at nearly Rs 70,000 crore, is expected to be awarded about six months after the successful completion of negotiations.

Mazagon Dock and Thyssenkrupp had earlier signed an MoU in June 2023 for this project. Thyssenkrupp will handle engineering and design, while Mazagon Dock takes charge of construction and delivery for the Indian Navy.

Cost overrun provisions impacted the company’s last two quarters. However, management has indicated no further provisions will be required, with margins expected to recover ahead. Another positive trigger for the stock is its upcoming inclusion in the Nifty Next 50 index from the end of September.

At 2:02 PM, the shares of Mazagon Dock were trading 1.99% at Rs 2,754 on NSE.

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