From Mazagon to Cochin Shipyard, India's shipbuilders have doubled their market cap in 2023

India's three shipbuilding companies, Mazagon Dock Ltd., Cochin Shipyard Ltd., and Garden Reach Shipbuilders Ltd. have seen a multi-fold growth in their market capitalisation as stocks have rallied significantly in 2023 so far. All three stocks have doubled their market capitalisation so far this year.

Mazagon Dock has been the top performer among its peers so far this year. The stock has risen by 160 percent so far this year resulting in its market capitalisation crossing Rs 40,000 crore.

Shares of its peers like Cochin Shipyard and Garden Reach Shipbuilders have also risen betwen 90-100 percent so far this year, resulting in a substantial jump in their market capitalisation.

With this surge in shipbuilders, the cumulative government stake in these three companies has also crossed the Rs 50,000 crore mark. At current prices, that stake is nearing Rs 54,000 crore.

The government still owns a 84.8 percent stake in Mazagon Dock Shipbuilders, while in Cochin Shipyard and Garden Reach, the figure stands at 72.86 percent and 74.5 percent respectively.

In an interaction with CNBC-TV18 on August 14, PR Hari of Garden Reach Shipbuilders said that the company will be able to maintain an order book of Rs 24,000 crore for the end of financial year 2024. Garden Reach's current order book is at Rs 24,456 crore. The management also said that the company expects peak revenue in financial year 2024-2025.

Three out of the four analysts who track Cochin Shipyard have a buy rating on the stock. However, consensus expects a potential downside of close to 40 percent.

While analysts now project a potential downside of nearly 25 percent in Mazagon Dock, the potential downside for Garden Reach is pegged at 21 percent.

Shares of all three shipbuilding companies are currently trading with gains from 8-18 percent.