Shipbuilding stocks extend rally; GRSE, CSL, MDL surge up to 28% in 2 days

The government will soon launch its second edition with a budgetary corpus of Rs 40,000 crore, with a special focus on shipbuilding, repair, and recycling.

Shares of shipbuilding companies like Garden Reach Shipbuilders & Engineers (GRSE), Mazagon Dock Shipbuilders (MDL) and Cochin Shipyard (CSL) have rallied by up to 6 per cent on the BSE in Thursday’s intra-day trade amid heavy volumes. These stocks are trading higher for the second straight day, surging up to 28 per cent in the past two days.

 

The sharp up move in the stock prices of ship building companies came on the back of reports that the Indian government will soon launch its second edition with a budgetary corpus of Rs 40,000 crore, with a special focus on shipbuilding, repair, and recycling.

 

With the Sagarmala 2.0 programme, the government is focussing on bridging critical infrastructure gaps with fresh investments, driving coastal economic growth, and positioning India as a global maritime leader. Backed by Rs 40,000 crore in budgetary support, it aims to catalyse investments worth Rs 12 trillion over the next decade.   ALSO READ | Stock Market LIVE Updates: Sensex climbs 450 pts to 75,900; Nifty above 23,000; Nifty IT, Auto lead

 

Under the existing Sagarmala programme, the government is executing 839 projects (including modernisation, connectivity, port-led industrialisation, coastal infra, etc.) worth Rs 5.79 trillion, with 272 projects already completed at an investment of Rs 1.41 trillion. Sagarmala 1.0 will be over in 2026.

 

The initiatives under Sagarmala 2.0 are likely to address critical infrastructure gaps in enabling a smooth shipbuilding and repair ecosystem, in consonance with states, with whom the issue was discussed at length at the apex panel meeting, reported the Business Standard quoting officials aware of the developments.

 

Among the individual stocks, GRSE stocks surged 6 per cent to Rs 1,746.10 on the BSE in Thursday’s intra-day trade. In the past two days, the stock has zoomed 28 per cent from the level of Rs 1,367.45 on Tuesday. Since March 4, the stock price of GRSE has appreciated by 44 per cent.

 

Shares of MDL were up 5 per to Rs 2,764.95, while CSL share price gained 3 per cent to Rs 1,495.80 in intraday trade today. Both these stocks have rallied 17 per cent in the past two trading sessions.  ALSO READ | NHPC up 2% as board approves borrowing plan for raising of debt via NCDs

 

ICICI Securities believes that the government’s strong focus on improving India’s maritime infrastructure will create significant opportunities in ship-building across cargo and passenger segments. The government aspires to position India among the world’s top five shipbuilding nations by adding 4 million GRT of shipbuilding capacity. It also targets expanding port handling capacity to 10 billion metric tonnes annually. 

 

The government has also been talking to the large shipbuilders of South Korea and Japan for collaboration with Indian ship-builders and expanding their production to India. Companies like Cochin Shipyard, Mazagon Dock Shipbuilders, and Garden Reach Shipbuilders are expected to benefit substantially from this programme, the brokerage firm said in a note.