India moves to close a huge gap between its massive maritime trade and a tiny shipbuilding industry by heavily investing in defence shipbuilding.
Why the push matters
Almost 95% of India’s merchandise trade moves by sea, yet the country produces less than 1% of the world’s ships. To fix this, the government has launched a ₹69,700 crore shipbuilding and maritime development package and given shipyards "infrastructure status" for cheaper, long‑term financing. A ₹2.3 trillion naval modernisation plan now has more than 60 vessels under construction and another 70‑80 planned, with domestic content in warships reaching 70‑75%.
Mazagon Dock Shipbuilders Ltd
Mazagon Dock is the only Indian yard that can build both surface combatants (destroyers, stealth frigates) and conventional submarines at the same time. It works on the P‑15B destroyers, P‑17A stealth frigates and the Scorpène submarine programme.
- Domestic content in current platforms: ~75% (up from 42%).
- Facility can handle 10 surface warships and 11 submarines simultaneously.
- Backlog as of September: ₹27,415 crore, giving revenue visibility for about two years (FY25 revenue ~₹11,432 crore).
- Upcoming orders: three Scorpène submarines worth ₹36,000 crore and the P‑75(I) programme worth ₹70,000 crore.
- Potential to push the order book above ₹1 trillion.
- MoUs for a new greenfield shipyard on the east coast and a joint bid for a landing platform dock project worth ₹35‑40 crore.
- Acquisition of Colombo Dockyard (Sri Lanka) to grow ship‑repair revenue by ~50%.
- H1 FY26 revenue: ₹5,555 crore (+9% YoY); operating margin fell to 16% after a ₹1,000 crore provision; net profit ₹1,200 crore (‑6%).
Garden Reach Shipbuilders & Engineers (GRSE)
GRSE has a broad mix of naval platforms, export orders and ship‑repair work, making it less dependent on any single programme.
- Order backlog: ₹20,206 crore, giving about five years of revenue visibility (FY25 revenue ~₹5,076 crore).
- Key projects: P‑17A frigates, ASW shallow‑water craft, next‑gen offshore patrol vessels.
- Export contracts: 12 vessels for German clients worth ₹5,400 crore and a dredger for Bangladesh worth ₹95 crore.
- Leading bidder for the ₹30,000 crore next‑gen Corvette programme; expects FY26 order book >₹50,000 crore.
- Potential pipeline of ~₹1.5 trillion, including P‑17 Bravo (₹70,000 crore), landing platform docks (₹35,000 crore) and mine‑countermeasure vessels (₹32,000 crore).
- Capacity expansion: increase concurrent ship builds from 28 to 32 by 2026, aiming for 40 later.
- Non‑defence platforms now 17% of the order book (up from 0%).
- H1 FY26 revenue: ₹2,987 crore (+38% YoY); net profit ₹274 crore (+48%).
- Management guides 25‑30% revenue growth for FY26.
Cochin Shipyard Ltd
Cochin Shipyard is India’s largest public‑sector yard and the only one that can build large vessels such as the indigenous aircraft carrier INS Vikrant.
- Order book: ₹21,100 crore, offering 4‑5 years of revenue visibility; defence contracts ~66%, commercial/exports ~24%.
- After the current aircraft carrier program ends, the backlog will be supported by next‑gen missile vessels (₹9,800 crore) and shallow‑water craft.
- Pipeline of nearly ₹2.2 trillion, including qualification for a future IAC‑2 carrier (₹45,000 crore) and bids worth ₹9,500 crore for fast patrol and survey vessels.
- Commercial segment adds a potential ₹65,000 crore, driven by PSU fleet renewals and green‑technology demand.
- Ship‑repair business contributes >40% of FY25 revenue; new international repair hub at Kochi expected to add ₹250 crore in 18‑24 months, eventually >₹600 crore.
- Repair units now in Mumbai, Kolkata and the Andaman & Nicobar Islands, handling 150‑165 jobs a year.
- MoU with Maersk to repair at least one vessel by FY26.
- H1 FY26 revenue: ₹1,928 crore (+6.7% YoY); net profit ₹289 crore (‑22.7%) due to margin pressure.
- Management forecasts revenue growth of 14‑15% in FY26 and 10‑12% over the next 5‑10 years, aiming to double by FY31.
Key takeaways for investors
- India’s defence shipbuilding push creates a long‑term growth runway for Mazagon, GRSE and Cochin.
- All three firms have sizable order backlogs that provide multi‑year revenue visibility.
- Diversification into ship repair and export markets helps smooth earnings cycles.
- Upcoming large contracts (new submarines, corvettes, aircraft carriers) could lift order books into the trillion‑rupee range.
- Investors should watch order‑book updates, margin trends, and progress on new shipyard and repair facilities.
Remember, this is my view, not a prediction. Do your own research before making any investment decisions.