Mazagon Dock, GRSE, Cochin Shipyard set for 3x order boom by FY27 amid defence windfall: Antique Broking

Time of India

13-05-2025

India's state-run defence shipbuilders—Mazagon Dock Shipbuilders, Garden Reach Shipbuilders & Engineers (GRSE), and Cochin Shipyard—are poised for an order boom that could more than triple their combined order books over the next two years, according to
Antique Stock Broking
.
The brokerage said a sharp recovery in defence stock prices since April, following a geopolitical flare-up at the India-Pakistan border and the clearance of Rs 54,000 crore worth of defence contracts, has rekindled investor interest after months of price correction.
Antique reiterated its 'buy' ratings on Mazagon Dock and GRSE, while maintaining a 'hold' on
Cochin Shipyard
, citing limited clarity on the timeline and scale of the proposed second indigenous aircraft carrier (IAC-II). The brokerage said it expects the stocks to trade up to 45 times FY27 core earnings, supported by a strong policy framework, rising indigenisation, and a robust defence capex pipeline.
The brokerage noted that the Defence Acquisition Council has approved Rs 8.45 lakh crore worth of orders between FY22 and FY25—3.3 times the amount cleared in the prior three years—and projected that significant contracts totalling Rs 2.35 lakh crore are lined up for FY26 and FY27. These include big-ticket naval projects such as three additional Kalvari-class submarines for Mazagon Dock, the P75I submarine program, next-generation corvettes equipped with BrahMos missiles, and the more heavily armed P-17B frigates.
Antique said it has strong visibility on Rs 2.12 lakh crore worth of orders expected to be awarded in FY26–27. The Kalvari-class submarine order alone could be worth Rs 36,000 crore and may be placed as early as FY26. The P75I order, estimated at Rs 70,000 crore, is expected to be finalised by FY27 and may be awarded to the sole remaining bidder—Mazagon Dock in partnership with Germany's Thyssen Krupp Marine Systems. The Rs 36,000 crore corvette project is nearing final stages, with bids likely to be opened in the first half of FY26. The P-17B frigate program, potentially worth Rs 70,000 crore, is also progressing, with a request for proposal expected later this year.
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Despite this pipeline, Antique flagged the absence of consensus over the need and design of IAC-II as a key overhang for Cochin Shipyard. While previous major projects have concluded, the company's near-term order visibility is tied to the government's decision on whether to prioritise submarines or aircraft carriers.
Antique has set target prices of Rs 3,433 for Mazagon Dock, Rs 2,024 for GRSE, and Rs 1,481 for Cochin Shipyard. Shares of all three companies rallied sharply on Tuesday, with Mazagon Dock climbing as much as 4.1% to Rs 3,023.50, GRSE gaining 5.1% to Rs 1,913.95, and Cochin Shipyard rising 4.4% to Rs 1,587.40 on the BSE.
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Looking beyond FY27, Antique said investor concerns about a potential order cliff are unwarranted. The brokerage said it expects the next wave of large-scale orders to be led by Project-18 destroyers, valued at Rs 80,000 crore, and the indigenous Project-76 submarine program, estimated at Rs 1.2–1.5 lakh crore. Antique said it also anticipates a decision on a third aircraft carrier to replace INS Vikramaditya by 2038.
'We see large orders being placed in FY26–27 led by the ordering of six submarines under P75I, three Kalvari-class submarines, next-generation Corvettes, and P-17B Frigates, besides a host of smaller vessels,' Antique said, reaffirming its bullish outlook on India's defence shipbuilding sector.