Shares of key shipbuilding firms like Mazagon Dock Shipbuilders (MDL), Garden Reach Shipbuilders & Engineers (GRSE), and Cochin Shipyard surged up to 7% today, energised by anticipation of Defence Acquisition Council discussions on proposals worth Rs 1.2 trillion. The meeting is expected to buoy GRSE share price, Cochin Shipyard shares, and MDL shares.
The proposed mega projects under discussion include seven new generation frigates and 1,700 future-ready combat vehicles, with estimated costs of Rs 70,000 crore and Rs 50,000 crore, respectively. This potential approval is seen as a significant positive driver for MDL shares, among others.
MDL’s shares peaked at Rs 4,489.05 today, showing a 7% increase, while GRSE’s shares rose by 6% to Rs 1,948.55. Cochin Shipyard’s shares also climbed by 4% to Rs 1,930. These increases reflect a robust market response to the anticipated approvals.
Despite today’s gains, MDL shares, GRSE share price, and Cochin shipyard shares remain 23% to 35% below their July record highs. Nonetheless, since the beginning of 2024, these stocks have seen substantial growth, with increases of up to 181%.
The Defence Ministry’s emphasis on indigenization, which mandates over 75% domestic sourcing for new frigates and over 50% for future combat vehicles, plays into the strategy of fostering ‘Atmanirbharta’. This policy supports long-term growth prospects for GRSE share price and its peers.
The positive outlook is further supported by the Indian Navy and Coast Guard’s ambitious acquisition plans, boosting the entire shipbuilding ecosystem. The potential increase in defence product exports to $3.59 billion by 2025 also offers optimistic prospects for Cochin shipyard shares and others involved.
