Shipbuilding stocks outshine the Nifty in Calendar 2022

Shipbuilding stocks in focus

by 5paisa Research Team Last Updated: 2022-04-13T15:43:19+05:30

In the last few days, shipbuilding stocks have been in the limelight. A typical shipbuilding company caters to the building and maintenance of commercial ships as well as ships for the naval forces of the country. Since the start of 2022, the shipbuilding stocks have actually done a lot better than the overall indices. One can say that the choice is limited but it is a small universe where the attractiveness is surely beginning to show.



52-week High

52-week Low

Market Cap

P/E Ratio


Garden Reach




Rs.3,434 crore



Mazagon Docks




Rs.6,413 crore



Cochin Ship




Rs.4,551 crore




Data Source: BSE

Let us take a quick look at the 3 stocks in the shipbuilding space listed in India.

1. Garden Reach has an overall market cap of just about Rs.3,434 crore and is available at an attractive P/E ratio of 17.85 times earnings for its ROE of 16.61%. The stock is trading fairly close to its 52-week high price.

2. Mazagon Docks has an overall market cap of just about Rs.6,413 crore and is available at an attractive P/E ratio of 9.88 times earnings for its ROE of 21.42%. The stock is trading fairly close to its 52-week high price.

3. Cochin Shipyards has an overall market cap of just about Rs.4,551 crore and is available at an attractive P/E ratio of 8.67 times earnings for its ROE of 12.94%.

In all the above cases, the market cap of these companies are very small and the valuations very attractive considering the kind of asset bank and strategic importance that they hold. 

What was the trigger for the spike in prices?

One important trigger for the spike in the stock prices of these ship building stocks was the recent economic crisis in Sri Lanka. As a result, the political and economic uncertainties in Sri Lanka and the resultant congestion at the Colombo port are forcing more ships to turn towards Indian ports in recent months.

This is likely to open up a much larger business opportunity for these shipbuilding and ship maintenance companies in India.

In addition, there has also been diversion of cargo. According to preliminary estimates, up to 10% of the cargo which normally heads for Colombo is heading to Indian ports like Chennai, Ennore, Mundra and VO Chidambaranar Port in Tuticorin.

These ports have been the major beneficiaries. Even Kochi International container Trans-shipment Terminal (ICTT) has seen a 62% spike in traffic. All these are contributing to the sudden interest in shipbuilders.

Many of the shipbuilders are not only commercial shipbuilders but also make specialized warships for the armed forces. With the Make in India program and the commitment to farm out more orders to domestic manufacturers, the defence order flow is also likely to gravitate towards these shipbuilding companies.

Companies like Garden are also making galvanized modular bridges for difficult terrains. The good times may have just begun!

Start Investing in 5 mins*

Get Benefits worth 2100* | Rs. 20 Flat Per Order | 0% Brokerage

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Open Free Demat Account

& get benefits worth 2100*

Resend OTP
Please Enter OTP
  • Have Promo code?
  • Use code ACT2100
Enter Promo code

By proceeding, you agree to the T&C.

Start Investing Now!

Open Free Demat Account in 5 mins

Enter Valid Mobile Number