For investors, this could mean a multi-year opportunity to ride the next wave of wealth creation. But is it time to jump on board?
A policy shift
By giving infrastructure status to large ships, the government has changed the game for shipyards. Ships can now be used as collateral for loans, ensuring easier and cheaper financing. For a capital-intensive industry like shipbuilding, this could be a big boost.
It also ties in with India’s Maritime Vision 2030 and 2047, which aims to boost India’s share of global shipbuilding from less than 1% today to among the world’s top five by 2047.
Recent rally on Dalal Street
Investors have already begun to price in optimism. Over the last month, shares of Cochin Shipyard have rallied 13%, Garden Reach Shipbuilders (GRSE) is up 8%, and Mazagon Dock Shipbuilders (MDL) has gained 7%.
These rallies follow a strong order book position across the sector and expectations of higher defence and commercial shipbuilding demand.
The Indian shipbuilding industry was valued at just $90 million in 2022. By 2033, it is projected to touch $ 8 billion, clocking a CAGR of 60%, according to Finextra Research.
Key growth drivers include government support, India’s long coastline and proximity to global shipping routes and low labour costs, which gives it the competitive advantage compared to China, South Korea, or Japan.
The big players
Cochin Shipyard: India’s largest public shipyard with a 22% market share. Known for defence vessels, rigs, and high-end ships. Order book of Rs 21,100 crore, with 65% from the Indian Navy. FY25 revenues grew 24% to Rs 4,528 crore, margins at 20%. Stock trades at 58x FY26 EPS.
Garden Reach Shipbuilders (GRSE): Commands an order book of Rs 22,681 crore. FY25 revenue jumped 41% to Rs 5,076 crore, with PAT growth of 48%. Trades at 55x FY26 EPS. Strong defence orientation with Navy and Coast Guard orders.
Mazagon Dock Shipbuilders (MDL): A leading submarine and warship builder for the Indian Navy. Commands a 12% market share. Strong defence pipeline ensures visibility.
Expert views
“The government’s move to grant infrastructure status and announce Rs 70,000 crore investment in clusters is a game-changer. It will lower borrowing costs and boost domestic shipbuilding. Defence-focused players like GRSE, with a Rs 22,681 crore order book, and Cochin Shipyard, with Rs 21,100 crore orders, are well-placed. Investors should look to accumulate on corrections,” said SimranJeet Singh Bhatia, Almondz Global.
“India plans three new greenfield shipyards with Rs 75,000 crore investment. The aim is to raise India’s share of locally built vessels from 5% to 7% by 2030 and to 69% by 2047. Infrastructure status ensures affordable financing, crucial for this capital-heavy sector. Stocks like CSL, MDL, GRSE, and L&T Shipbuilding stand to benefit,” said Nitin Jain of Bonanza.
Stock picks
“One can focus on the ship building companies like Mazagon Dock, Cochin Shipyard and GRSE which have witnessed a significant erosion in the last 3-4 months and currently are well positioned looking attractive,” said Shiju Koothupalakkal, Technical Research Analyst at PL Capital.
Risks and investment approach
Valuations are not yet cheap. Most shipbuilding stocks are trading at 50–60x forward earnings, pricing in a large part of the optimism. Execution challenges, delays in defence orders, and global demand cycles could weigh on the sector.
The Rs 70,000 crore package, infrastructure status for large ships, and multi-decade growth vision are powerful triggers. With stocks already rallying, analysts suggest the smart approach to accumulate gradually, especially during corrections, rather than chasing the rally.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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