Excellent Investment Opportunity in Mazagon Dock, Garden Reach, and Cochin Shipyard with ₹8.45 Lakh Crore Order Book. Brokerage Firms Give Buy Rating for Long Term.
Defence Stock: The Indian Defence sector is once again in investors' focus. Increased tensions with Pakistan and the government's continuous placement of large orders have led to a significant surge in the share prices of defence companies.
On Tuesday, May 13th, several Defence companies, including Bharat Dynamics and Bharat Electronics, witnessed an 8% surge in their share prices. April also saw good returns in Defence stocks.
Why are Defence PSU Stocks Shining?
The recent surge in the Defence sector is primarily due to two factors:
- Increased Geopolitical Tensions on the Western Border
- Government Approval of New Orders Worth ₹54,000 Crore
Although a price correction was observed in Defence stocks between July 2024 and March 2025, experts now believe that this is the right time to invest in Defence PSU stocks for the long term.
These 3 Defence PSU Stocks are Strong Bets
1. Mazagon Dock Shipbuilders (MDSL)
Target Price: ₹3,433
Rating: Buy
Upside Potential: 18%
Mazagon Dock is India's leading warship and submarine manufacturer. Antique Broking, a brokerage firm, has given it a Strong Buy recommendation for the long term.
2. Garden Reach Shipbuilders & Engineers (GRSE)
Target Price: ₹2,024
Rating: Buy
Upside Potential: 11%
Garden Reach also plays a significant role in warship construction for the Indian Navy. It also possesses a b order book, and the brokerage has maintained a Buy recommendation.
3. Cochin Shipyard (CSL)
Target Price: ₹1,481
Rating: Hold
Cochin Shipyard's outlook is somewhat uncertain. Its future depends on the order for the second indigenous aircraft carrier (IAC-II). Until this order is confirmed, a neutral stance will be maintained on the stock.
Large Orders Expected in FY26-27
According to Antique Broking, the procurement pipeline for Defence warships is quite b. Although delays are possible, large orders worth approximately ₹2,12,000 crore are expected in FY26-27.
In total, the combined order book size of the three Defence PSU companies could reach ₹2,35,400 crore, which is 3.1 times their current order book.
Mazagon Dock to Benefit from Submarines Project
The Ministry of Defence (MoD) plans to award Mazagon Dock an order for three new Kalvari-Class submarines. This order could be worth approximately ₹36,000 crore and is likely to be received in FY26.
Furthermore, six new conventional submarines will be constructed under the P75I project. This order will be awarded through competitive bidding and its estimated value could be ₹70,000 crore.
