India has launched an ambitious Rs 70,000 crore initiative to reshape its shipbuilding industry. The plan includes granting infrastructure status to large ships, which is expected to ease financing, unlock new capacity, and attract substantial investment. The government projects this could generate nearly 30 lakh jobs and bring in investments of around Rs 4.5 lakh crore.
A Policy Shift with Big Implications
By giving large ships infrastructure status, the government allows shipyards to use vessels as collateral for loans, lowering borrowing costs in a capital-intensive industry. This move aligns with India’s Maritime Vision 2030 and 2047, which aims to raise India’s share of global shipbuilding from under 1% today to among the top five nations by 2047.
Investor Optimism on Dalal Street
The stock market is already reflecting optimism. Over the past month, Cochin Shipyard shares have risen 13%, Garden Reach Shipbuilders & Engineers (GRSE) by 8%, and Mazagon Dock Shipbuilders (MDL) by 7%. Strong order books and expectations of increased defence and commercial shipbuilding demand are fueling gains.
The Indian shipbuilding sector, valued at $90 million in 2022, is projected to reach $8 billion by 2033, growing at a CAGR of 60%. Key advantages include government support, India’s long coastline, strategic location on global shipping routes, and lower labour costs compared to rivals like China, South Korea, and Japan.
Leading Players
- Cochin Shipyard: India’s largest public shipyard with a 22% market share, focusing on defence vessels and high-end ships. Order book of Rs 21,100 crore, 65% from the Navy. FY25 revenues grew 24% to Rs 4,528 crore with 20% margins. Trades at 58x FY26 EPS.
- Garden Reach Shipbuilders (GRSE): Holds Rs 22,681 crore in orders. FY25 revenue jumped 41% to Rs 5,076 crore, with PAT growth of 48%. Strong defence orientation. Trades at 55x FY26 EPS.
- Mazagon Dock Shipbuilders (MDL): Leading submarine and warship builder with a 12% market share, strong defence pipeline ensures visibility.
Expert Insights
SimranJeet Singh Bhatia of Almondz Global calls the move a “game-changer,” noting that lower borrowing costs and the Rs 70,000 crore investment in clusters position defence-focused players well. Nitin Jain of Bonanza highlights three new greenfield shipyards and predicts India’s share of locally built vessels will rise from 5% to 7% by 2030 and 69% by 2047.
Technical analyst Shiju Koothupalakkal advises investors to focus on Mazagon Dock, Cochin Shipyard, and GRSE, citing recent price erosion that presents attractive entry points.
Risks and Strategy
Valuations remain high, with most shipbuilding stocks trading at 50–60x forward earnings, reflecting significant optimism. Potential risks include execution delays, defence order timelines, and global demand fluctuations. Analysts recommend accumulating gradually during corrections rather than chasing the current rally.
Bottom Line
The combination of the Rs 70,000 crore package, infrastructure status, and a long-term growth vision makes India’s shipbuilding sector a multi-decade story. For investors willing to be patient and selective, this could be the next wave of wealth creation in Indian manufacturing.
