The stock price of Cochin Shipyard Ltd is closely linked to the future of the Indian Aircraft Carrier (IAC-II) order, which remains a topic of debate. There is a lack of consensus on both the urgency and the size of the vessel, leading to uncertainty surrounding the company’s prospects.
Defence Shipyard Sector Growth Forecast
According to Antique Stock Broking’s latest defence report, defence shipyards are expected to see their order books grow threefold in the next two years. The firm has maintained a ‘Buy’ recommendation for Mazagon Dock Shipbuilders Ltd and Garden Reach Shipbuilders & Engineers Ltd (GRSE), while advising a ‘Hold’ position for Cochin Shipyard Ltd due to the uncertainty regarding the IAC-II order.
The rebound of defence stocks since April, following a correction between July 2024 and March 2025, has been driven by factors such as the escalation of India-Pakistan border tensions and significant defence orders worth Rs 54,000 crore. This broader improvement in investor sentiment is further supporting growth in the sector.
Growth Prospects for Defence Shipyards
Antique Stock Broking remains optimistic about the long-term earnings potential of Indian defence shipyards, forecasting that these stocks could trade up to 45 times their FY27 core earnings. Despite the uncertainty over Cochin Shipyard’s involvement in the aircraft carrier project, the firm maintains a positive outlook for Mazagon Dock and GRSE, which continue to benefit from strong order pipelines.
Order Book Outlook and Key Orders in FY26-27
Antique’s report highlights the substantial procurement pipeline for defence warships, which is expected to include significant orders in FY26-27, though these often face delays. The brokerage expects Rs 2,12,000 crore in major defence orders during this period, with an overall value of Rs 2,35,400 crore across all shipyards. These orders will likely be more than three times the combined current order book of the three listed defence shipyards.
Key Orders in the Defence Sector
Among the anticipated orders, the DAC (Defence Acquisition Council) is expected to place a repeat order for three Kalvari-class submarines at Mazagon Dock, valued at approximately Rs 36,000 crore. Additionally, the P75I program, which involves six conventional submarines with AIP capabilities, is set to be placed through competitive bidding, with an expected order value of Rs 70,000 crore.
Antique also notes the planned Next-Generation Corvettes (NGCs), which will be equipped with advanced anti-ship or land-attack missiles like BrahMos, with an estimated order value of Rs 36,000 crore. Finally, the P-17B frigates, set to be more advanced than their predecessors, are expected to have a total order value of Rs 70,000 crore.
Policy Support and Defence Shipyard Outlook
The Indian defence shipyard sector continues to benefit from strong policy support focused on indigenization and substantial government investment. Over FY22-25, the DAC has approved orders worth Rs 8.45 lakh crore, nearly 3.3 times the total orders for the preceding three years. This support is expected to result in significant order inflows for the sector in FY26-27.
Stock Target Prices
Antique Stock Broking has set target prices of Rs 3,433 for Mazagon Dock, Rs 1,481 for Cochin Shipyard, and Rs 2,024 for GRSE, reflecting the firm’s optimistic view of the defence shipyard sector’s future growth.
