Mazagon Dock, Cochin Shipyard, GRSE shareholders in a fix since six months; more pain ahead?

Shares of defence sector firms such as Mazagon Dock Shipbuilders, Cochin Shipyard and Garden Reach Shipbuilders have lost up to 28% in the last six months, reflecting the ongoing slowdown in the defence sector stocks. While Mazagon Dock stock has lost 26.30% in six months, Cochin Shipyard shares are down 27.28% during the same period. Garden Reach Shipbuilders has slumped the maximum 28.33% in six months, signalling profitbooking in defence sector stocks and volatility in the broader market due to the India-US tariff barriers. 

Mazagon Dock Shipbuilders 

The defence stock is oversold on charts with a RSI of 23.7 in the current session. This implies there are more sellers than buyers and sentiment is bearish for the defence sector stock. In the current session, the stock gained 0.53% to Rs 2370 . Mazagon Dock's market cap stood at Rs 95,629 crore on BSE. 

Total 0.30 lakh shares of the firm changed hands amounting to a turnover of Rs 7.08 crore. Mazagon Dock shares are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

Cochin Shipyard

Cochin Shipyard is oversold on charts with a RSI of 21.3 in the current session. This implies there are more sellers than buyers and sentiment is bearish for the defence sector stock. In the current session, the stock gained 0.90% to Rs 1519. Cochin Shipyard's market cap stood at Rs 39,976 crore on BSE. 

Total 0.30 lakh shares of the firm changed hands amounting to a turnover of Rs 4.63 crore. The defence stock is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

GRSE 

GRSE shares are also oversold on charts with a RSI of 26.6 in the current session. This implies there are more sellers than buyers. In the current session, the stock gained 0.44% to Rs 2232. GRSE's market cap stood at Rs 25,587 rore on BSE. 

Total 0.44 lakh shares of the firm changed hands amounting to a turnover of Rs 9.92 crore. The defence stock is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

Meanwhile, brokerage Phillip Capital has initiated coverage on the three stocks with a buy call. For Mazagon Dock, price target has been fixed at Rs 3,200, an upside of 36% from current levels.  For Garden Reach Shipbuilders, a price target of Rs 2,800  has been fixed indicating an upside potential of 26%. Cochin Shipyard, the brokerage says has the highest upside potential among the three, as its "buy" rating comes with a price target of Rs 2,175, a rally of 44%.

According to the brokerage, India's defence shipbuilding sector stands at the threshold of a multi-decade transformation and is evolving from a fragmented, policy-dependent industry, into a strategic manufacturing and defence pillar. Despite handling 95% of its trade through maritime routes, India has less than 1% share in global ship production, said Phillip Capital. 

The brokerage said over 60 naval vessels were under construction, another 70-80 are being planned, including high-value platforms, next generation corvettes, and fleet support ships. 

The government has outlined a naval modernization pipeline nearing Rs 2.3 lakh crore, and 75% of procurement reserved for domestic vendors, Mazagon Dock, Cochin Shipyard and Garden Reach enjoy robust, multi-year revenue visibility, Phillip Capital wrote.