Defence stocks continued their strong rally on May 14, with shipbuilders stealing the spotlight. Shares of Garden Reach Shipbuilders & Engineers (GRSE) and Cochin Shipyard soared as much as 17% in early trade, giving a major push to the Nifty India Defence index, which climbed over 4% during the session.
GRSE Posts 48% Jump in FY25 Net Profit
GRSE delivered a stellar performance in FY25, reporting a net profit of ₹527 crore, marking a 48% increase over the previous financial year. This solid growth has powered the stock to a 30% gain so far in 2025 and an impressive 118% rally over the past year.
CMD Commodore PR Hari (Retd) of GRSE expressed optimism, stating:
“With our strong order book, production maturity of the ongoing projects and order visibility, I am confident of even better performance this financial year.”
He further highlighted growth potential in the commercial shipbuilding segment, while the company projects a 20–25% CAGR over the next five years.
Exports, which currently make up just 4% of GRSE’s order book, are expected to grow fourfold in the next four years, pointing to a strong international push.
P-17 Alpha Project on Track
The P-17 Alpha project, involving the delivery of three advanced warships to the Indian Navy, is progressing smoothly. GRSE expects the first delivery by August 2025, with full completion likely by mid-2026. This is expected to significantly boost revenue and margins in FY27.
“The big projects, that is P-17 Alpha, touch wood, we should be able to finish by mid of next year. So, the maximum revenue accrual will happen from this project,” said GRSE earlier.
Cochin Shipyard Gains on Strategic Partnership
Cochin Shipyard shares were up over 13% after announcing a strategic partnership with Drydocks World to develop ship repair clusters across India. The collaboration aims to create a world-class ship repair ecosystem, serving both domestic and international fleets, and enhancing India’s offshore fabrication capabilities.
According to management,
“The partnership will support marine engineering training and skilling initiatives and strengthen India’s maritime sector.”
The initial phase of the project will commence at the Kochi dock, with plans to expand the initiative across the country.
Momentum Backed by Robust Defence Orders and Exports
This surge in defence stocks comes on the back of strong fundamentals and continued policy support. In March, the Defence Acquisition Council (DAC) approved proposals worth over ₹54,000 crore for various defence platforms, including engines for T-90 tanks, torpedoes, and airborne warning systems.
Meanwhile, India’s defence exports hit a record ₹23,622 crore in FY25, showcasing the success of the Make in India initiative. This marks a 34-fold increase from FY14, when exports stood at just ₹686 crore.
India’s export portfolio now includes bulletproof jackets, Chetak helicopters, Do-228 aircraft, lightweight torpedoes, and fast interceptor boats.
Self-Reliance in Defence Manufacturing Strengthens
As much as 65% of India’s defence equipment is now manufactured locally, underlining growing self-reliance. Notably, the private sector contributes 21% of total defence production. The government aims to achieve ₹3 lakh crore in defence production by 2029 and transform India into a global manufacturing hub.
In FY25 alone, the Ministry of Defence approved a record 193 contracts, with a value exceeding ₹2 lakh crore. Of this, 92% went to domestic industry, amounting to ₹1.69 lakh crore, reinforcing the shift towards indigenous production.
Conclusion: Shipbuilders Drive Defence Stocks to New Highs
The remarkable performance of GRSE and Cochin Shipyard highlights the strong momentum in India’s defence sector. With robust financial results, growing exports, and major defence orders in the pipeline, investor confidence in defence PSUs is clearly on the rise. As India continues to push for self-reliance and global competitiveness in defence manufacturing, the Nifty Defence index could remain a strong performer in the coming quarters.
