GRSE, Cochin Shipyard, Mazagon Dock shares soared up to 18% today; here's why

Garden Reach Shipbuilders & Engineers Ltd (GRSE), Cochin Shipyard Ltd and Mazagon Dock Shipbuilders Ltd (MDL) saw their shares zoom up to 18 per cent in Wednesday's trade amid optimism surrounding strong prospective order inflows going ahead. GRSE led the defence shipyard pack, rising 18.25 per cent to hit a high of Rs 2,264.65. The stock gained as the defence PSU reported doubling of profit at Rs 224 crore in the March quarter against Rs 112 crore in the same quarter last year. 

GRSE's MD & Chairman Hari PR said the production maturity of the ongoing projects and order visibility -- including in the commercial shipbuilding segment, made him believe that GRSE may deliver better performance in the ongoing financial year. 

Cochin Shipyard advanced 13.94 per cent to Rs 1,797.10. A Times of India report suggested that a Rs 10,000-crore shipyard is likely established through a joint venture between Cochin Shipyard and South Korea's HD Hyundai in Thoothukudi, Tamil Nadu. The initiative is supported by government policies and aims to significantly increase India's share in the global shipbuilding market, the report suggested. 

Shares of Mazagon Dock Shipbuilders were trading at Rs 3,131, up 4.29 per cent.

Antique Stock Broking, in its latest report on the defence sector, stated that the order books of listed defence shipyards are expected to more than triple over the next two years. The brokerage has reiterated its ‘Buy’ ratings on Mazagon Dock Shipbuilders Ltd and Garden Reach Shipbuilders & Engineers Ltd (GRSE), while maintaining a ‘Hold’ rating on Cochin Shipyard Ltd.

“Given the strong long-term earnings potential in the defence shipbuilding sector, we anticipate these stocks could trade at up to 45 times their FY27 core earnings,” the report noted. Antique continues to be bullish on Mazagon Dock and GRSE.

However, its outlook for Cochin Shipyard remains cautious, primarily due to uncertainties surrounding the potential order for a second Indigenous Aircraft Carrier (IAC-II). The lack of consensus on the urgency and specifications of the vessel has prompted the brokerage to take a more measured stance on the stock.

Antique highlighted a robust procurement pipeline for defence warships, although it acknowledged that execution often faces multi-year delays. Based on its industry interactions, the firm expressed confidence in the visibility of large-scale defence orders estimated at Rs 2.12 lakh crore, expected to be placed during FY26–27.

Among the anticipated contracts, the Defence Acquisition Council (DAC) is reportedly planning to place a repeat order for three Kalvari-class submarines with Mazagon Dock on a nominated basis. This order, likely to be placed in FY26, could be worth around Rs 36,000 crore.

Additionally, the P75I project, which involves the construction of six conventional submarines with air-independent propulsion (AIP) systems under the Strategic Partnership model, is also in the pipeline. Unlike the earlier P75 contract awarded to Mazagon Dock on a nominated basis, the P75I will follow a competitive bidding process and could be valued at approximately Rs 70,000 crore at current prices.
Antique said the procurement pipeline for defence warships is substantial, though it is often subject to multi-year delays. Based on industry interactions, Antique said it has a fair degree of confidence and visibility on key big-ticket orders worth Rs 2,12,000 crore that are likely to be placed during FY26–27.

Antique said the DAC has plans to place a repeat order for three Kalvari-class submarines with Mazagon Dock. The order will be on a nominated basis. The order value could be approximately Rs 36,000 crore and could get placed in FY26.

In addition, the P75I involves construction of six conventional submarines with AIP capabilities under the Strategic Partnership (SP) model. Unlike the P75 order, which was placed on Mazagon Dock on a nominated basis, the P75I order is based on competitive bidding. This order could be value at around Rs 70,000 crore at today’s prices.