Shares of defence shipbuilding companies rose up to 2% in Tuesday’s trading session amid a broader rally in the sector and a bullish outlook for the segment over the next few years. All three defence shipbuilding players traded in the green today.
Garden Reach Shipbuilders (GRSE) gained over 2% to hit the day’s peak of ₹2,666.60 on the National Stock Exchange (NSE). Mazagon Dock also added over 2% to ₹2,442.50, and Cochin Shipyard added 1.8% to ₹1,432.60 apiece.
Overall, the defence index was up 1.5% in today’s session, with 17 of its 19 constituents trading higher.
Defence shipbuilding sectoral outlook
According to analysts, India’s defence shipbuilding sector stands on the threshold of amulti-decade transformation. Currently, India holds less than 1% share in global ship production, providing the opportunity to tap this space led by a sharp increase in naval capital expenditure, a massive government policy push, and rising strategic imperatives in the Indian Ocean Region (IOR).
According to Choice Broking, the naval industry in India is entering a high growth phase, backed by a short-to-medium-term order pipeline of ~ ₹2.35 trillion (~$25 billion) through 2035, with Mazagon Dock, Cochin Shipyard and GRSE positioned as the prime beneficiaries.
The government has manifested this shift via the ₹69700 crore Shipbuilding and Maritime Development package, supported by Maritime India Vision 2030 and Maritime Kaal Vision 2047.
India’s naval capex has accelerated meaningfully, with its wartime procurement expected to triple to ₹24400 crore in FY26 from ₹9300 crore in FY18, according to Phillip Capital. The brokerage in a note in December said that defence spending continues to anchor the sector.
“With a naval modernisation pipeline exceeding ₹2.3 trillion and 75% of defence procurement reserved for domestic vendors, public sector shipyards like Mazagon, Cochin Shipyard and GRSE enjoy robust multi-year revenue visibility,” Phillip Capital had said. It initiated a ‘Buy’ rating on all three stocks.
Choice Broking, in a note on 8 June, also expressed their bullish outlook on these defence stocks with bullish calls. The brokerage said that Mazagon’s 4x order book expansion provides decadal visibility. It has a target price of ₹3,100 on the stock.
For Cochin Shipyard, it said that lifecycle economics creates 4-6 times the initial contract value. Book-to-bill at ~3.8x of FY26 revenue anchors multi-year visibility, it added. The target price is set at ₹1550.
Meanwhile, GRSE has a book-to-bill value of 2.2 times FY26 revenue, which provides growth visibility ahead. The company also has a first-mover advantage in India’s green maritime transition. The target price for defence stock is set at ₹3,500.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
