Defense stocks, especially those in shipbuilding, are driving the recent surge in PSU counters. These companies are seeing huge increases in their share values, hitting new highs daily. This rise is fueled by strong order wins and better financial performance.
The Indian defense shipbuilding sector is looking promising, supported by the ambitious plans of the Indian Navy and Indian Coast Guard. This positive outlook is good news for Indian shipbuilders and the industries that support them.
The government aims to boost India’s defense exports to $5 billion by 2024–25, highlighting the sector’s growing importance and potential.
Mazagon Dock Shipbuilders, Garden Reach Shipbuilders & Engineers, and Cochin Shipyard have all seen significant jumps in their share prices this week, with returns reaching nearly 34%.
Cochin Shipyard Shares Skyrocket Over 700% in a Year—Here’s Why
Cochin Shipyard shares have been top performers, jumping 34% in the last four sessions. Over the past year, the shares have soared by 722%, and they’ve increased an impressive 1058% in just two years.
Earlier this month, Cochin Shipyard secured an order from a European client to design and build a hybrid service operation vessel (SOV) with an option for two more. This vessel, equipped with hybrid battery systems, aims to improve energy efficiency and reduce carbon emissions.
The vessel is designed for the service, maintenance, and operational needs of the offshore wind farm industry in Europe, where sustainable energy solutions are in high demand. The project is expected to be completed by the end of 2026, according to Cochin Shipyard’s exchange filing.
The order is classified as ‘large,’ valued between ₹500-1000 crore, though the exact amount was not disclosed.
The company’s fourth-quarter and FY24 results are expected to be released today.
Mazagon Dock Shipbuilders: Gains 321% in a Year
Mazagon Dock Shipbuilders’ shares have jumped by 10.88% this week to ₹3,227 each and 35.67% in May, resulting in a remarkable 321% gain over the past year.
In the past three years, the company’s shares have surged by 1427%. They are now trading 2125% above their issue price of ₹145 per share from October 2020.
It took nearly 34 months for the stock to surpass the ₹1,000 mark after listing. After that, it took just four months to cross the ₹2,000 mark in September 2023, and it has continued to rise, reaching a new all-time high of ₹3,248 per share in today’s trading session.
At the end of the December quarter, the company had an impressive order book totaling ₹38,389 crore, providing strong revenue visibility, according to its Q3 investor presentation. The company’s Q4 and FY24 results are expected to be released on May 29.
Garden Reach Shipbuilders & Engineers: Rallies Over 200% in a Year
In the last trading session, Garden Reach Shipbuilders & Engineers saw a 20% surge in its shares following its strong performance in the March quarter and fiscal year 2024 (FY24).
In Q4FY24, the company’s net profit more than doubled, increasing by 101.81% year-on-year (YoY) to ₹111.60 crore, the highest ever. Its sales also rose significantly, up 68.96% YoY to ₹1,015.73 crore compared to ₹601.17 crore in the same period last year.
For FY24, profit after tax (PAT) was ₹357 crore, a 57% increase from ₹228 crore in FY23. The Indian Navy and Indian Coast Guard are GRSE’s main customers, contributing significantly to the company’s revenue.
In mid-May, GRSE announced a Notification of Award for the procurement of one Trailing Suction Hopper Dredger (Hopper Capacity: 1000 m3) with spare parts from the Government of the People’s Republic of Bangladesh. The total contract value is USD 1,65,75,210, excluding taxes.
GRSE, a top shipbuilding company in India under the Ministry of Defence, mainly serves the shipbuilding needs of the Indian Navy and Indian Coast Guard.
In today’s trading session, the company’s shares rose by 5.7% to a new record high of ₹1,508 each. This marks a 47% increase so far this month and an impressive 205% rise over the past year.
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