India’s defence shipbuilding sector is at the cusp of a multi-decade transformation, evolving from a fragmented, policy-driven space into a strategic manufacturing and defence pillar, Prabhudas Lilladher said in a note. Against this backdrop, the brokerage has picked Mazagon Dock Shipbuilders, Cochin Shipyard and Garden Reach Shipbuilders (GRSE) as stocks to buy, seeing up to 45% upside, even as the trio has corrected nearly 28% over the past six months. Here’s why.
The country handles approximately 95% of its trade through maritime routes, but holds less than 1% share in global ship production. This presents an immense opportunity, particularly when India has seen a historic policy shift from ad-hoc incentives to a comprehensive ecosystem approach, which spans finance, infrastructure, technology, and exports.
Government's policy shift has manifested in a Rs 69,700 crore shipbuilding and maritime development package, supported by the Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047.
Mazagon stays the sector’s flagship beneficiary and India’s largest and most advanced defence shipyard and the only one capable of designing andconstructing both surface combatants and conventional submarines. It is strategically placed at the center of India’s submarine and destroyer roadmap.
CSL offers one of the strongest multi-year growth trajectories in the sector, anchored by its unique role as India’s only aircraft-carrier builder, a growing defence order book (NGMV, ASW-SWC), a recovering commercial shipbuilding business, and a structurally expanding repair/MRO franchise that offers significant optionality. PL initiates with a 'Buy' valuing the stock at 45X FY28 EPS. It has slipped 2% in the past 12 months.
GRSE offers a well-diversified shipbuilding portfolio with execution visibility across frigates, corvettes, patrol vessels, research ships and exports. Its ability to scale capacity across multiple yards, rising share of non-defence and export platforms, and investments in autonomous systems and digital shipyard initiatives position it as a versatile, multi-segment defence shipbuilder.(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
