Shares of Mazagon Docks Shipbuilders Ltd (MDL) have risen 42% in the past seven sessions, with trading volumes quadrupling as investors seek to tap into its strong order pipeline.

Deliveries were up 5.48% from the previous month, indicating strong pricing momentum. The stock hit an all-time high of Rs 607.9 in early October 7. The stock traded at Rs 593.5 at 11:49 am, down 0.3%.

The stock has generated multiple returns of 130% over the past year and is up 113% year-to-date. The stock has risen nearly 128% in the past three months.

Over the past few days, Mazagon Dock Shipbuilders has not only outperformed the Nifty 50 but has also done well in the defence sector and overall is doing very well. Experts believe that Mazagon Dock has outperformed other defence stocks because its valuation has a catch-up factor.

Manoj Dalmia, founder and director of Bombay Ports Trust at Start Design and Professional Equities Limited, said the stock had a good breakout as “the company recently secured two orders from Indian Containers to manufacture 2,500 containers,”

The company currently has a huge order book of Rs 43,300 crore and has a potential order pipeline worth over $7-8 billion, which can be realised in the next 12-24 months. MDL is one of India’s leading defence public sector shipyards, under the Ministry of Defence, mainly engaged in the construction and maintenance of ships, submarines and various types of ships and related engineering products mainly used by the Indian Navy.

It is the only shipyard to build destroyers and conventional submarines for the Indian Navy and one of the first to build cruisers in India.

The company reported strong results for the quarter that ended in June 2022. It reported consolidated revenue of Rs 2,366.46 crore, up 55.13% quarter-on-quarter and 81.71% year-on-year. MDL reported a 134% year-on-year rise in net profit to Rs 217.02 crore in the latest quarter.

The company’s revenue has grown at a compound annual growth rate (CAGR) of 10.5% over the past ten years. During the same period, its earnings before interest, tax, depreciation and amortisation (EBITDA) grew at a compound annual growth rate of 3.6%, and its net profit grew at a compound annual growth rate of 3.9%.

“The company has an order backlog of Rs 43,343 crore as of August 2022, which is about 6.4 times its trailing 12-month (TTM) revenue,” said a report from ICICI Securities.