Defence Shipyard stocks rally up to 18% here's why
According to the Elara report, the street is expecting an opportunity worth Rs 9 lakh crore from the government over the next few years in the sector and the biggest trigger will come from the indigenisation share or more coming from Indian players.
The stocks of major defence shipyard companies soared by 18-4 percent today on the BSE. Garden Reach Shipbuilders touched its 52-week high at Rs 465, up by 18.53 percent from the previous close on the BSE. The stock closed at Rs 450, up by 14 percent from the previous close on the BSE.
Mazagon Dock Ship shares also touched its 52-week high at Rs 680, the shares although closed red at Rs 625, declining 1.2 percent from the previous close on the BSE. Cochin Shipyard shares also rallied over 5 percent in intra-day trade today.
In the past one month, these three stocks have outperformed the market by surging between 25-60 per cent, as compared to a 3.8 per cent decline in the S&P BSE Sensex. Mazagon Dock has rallied almost 140 percent, Garden Reach Shipbuilders has doubled it's returns and Cochin Shipyard too has rallied over 50 odd percent because of the big opportunity that everyone is talking about in the defence sector in India.
According to the Elara report, the street is expecting an opportunity worth Rs 9 lakh crore from the government over the next few years in the sector and the biggest trigger will come from the indigenisation share or more coming from Indian players.
Also Read: This state-run shipbuilder has jumped to a 52-week high after a 50 percent rise in seven sessions
Currently, the Navy accounts for 61 percent of indigenisation; 39 percent is still left to be indigenised and in that the defence shipyard business is USD 60 billion or Rs 4-5 lakh crore opportunity because the Indian Navy will scale the ships from almost 137 to 200 by 2027 and that Rs 4.5 lakh crore opportunity would be spread across submarines which are Rs 2.5 lakh crore odd, aircraft carriers which are around Rs 45,000 crore, coast guards Rs 52,000 crore and ship repair will be Rs 18,000 crore.
Watch the accompanying video of CNBC-TV18’s Mangalam Maloo for more details.
First Published: Oct 10, 2022 4:48 PM IST
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