India’s defence shipbuilding sector is in expansion mode, fuelled by the government’s push for indigenous manufacturing and rising defence budgets. Experts estimate that by FY27, order inflows could triple, touching nearly ₹2.12 lakh crore. These include repeat orders for submarines, corvettes, and frigates.
PSU Shipyards in Focus
The three listed public sector shipyards—Mazagon Dock Shipbuilders, Cochin Shipyard, and Garden Reach Shipbuilders—are well placed to benefit from this wave of new contracts. Strong order books signal long-term visibility, though near-term earnings have been uneven.
Earnings Snapshot: Q1 FY26
- Mazagon Dock Shipbuilders: Revenue rose 11% YoY to ₹2,626 crore, but net profit fell 35% to ₹452 crore. Higher expenses dragged operating margin down to 11.4% from 27.4% a year ago. Despite weaker profitability, MDL maintains its position as the Navy’s go-to builder for destroyers, submarines, and corvettes.
- Cochin Shipyard: Reported revenue of ₹1,069 crore, up 38% YoY, with net profit of ₹188 crore, up 8% YoY. Recent large contracts—including a ₹1,200 crore defence refit order and offshore vessel exports—have strengthened its order book. CSL also enjoys global recognition through agreements with the US Navy.
- Garden Reach Shipbuilders & Engineers: Delivered the best quarterly performance, with revenue up 29% to ₹1,310 crore and profit up 37% to ₹120 crore. Its stock has gained more than 60% YTD in 2025. GRSE’s order pipeline is strong, including bids for the Indian Navy’s ₹25,000 crore Next Generation Corvettes project and new partnerships for advanced technologies.
Order Books Remain Solid
- Mazagon Dock Shipbuilders: ₹29,918 crore
- Cochin Shipyard: ₹22,500 crore
- Garden Reach Shipbuilders: ₹22,680 crore
Market Performance YTD (as of Aug 15, 2025)
- Mazagon Dock: +22.1%
- Cochin Shipyard: +9.8%
- Garden Reach: +60.1%
Outlook
Government policy tailwinds, strong order visibility, and expanding capacities give PSU shipyards a clear growth runway. Investors have already rewarded this momentum, especially in Garden Reach’s case. But in a capital-heavy industry, execution discipline, timely delivery, and cost control will ultimately separate winners from laggards.
