Multibagger Cochin Shipyards, Garden Reach other Defence stocks shares rise up to 10%. Should you Buy, Sell or Hold?

Stock Market Today: Cochin Shipyard Ltd ,Garden Reach Shipbuilders & Engineers Ltd, Mazagon Dock Shipbuilders Ltd share prices gained up to 10%. Other Defence stocks as Hindustan Aeronautics Ltd. Bharat Electronics and BEML Ltd share prices among others also gained upto 4%.

The gains for the Defence companies as Cochin Shipyard ,Garden Reach Shipbuilders & Engineers, Mazagon Dock Shipbuilders, Bharat Electronics, BEML share prices comes after having remained under pressure in the recent past and correcting up to 30% from peaks in July.

The correction in share prices was driven by higher valuations the stocks were trading at.

The business outlook for defence manufacturers remains strong . Robust domestic demand and plans to increase Defence exports, all remain key earnings growth drivers, . However, the market was already factoring in much of the positive news, as was reflected in valuations, Sunil Damania, Chief Investment Officer, MojoPMS had said.

After corrections the valuations have somewhat normalised , but investors need to follow stock specific approach, say analysts.

Garden Reach Shipbuilders & Engineers has announced large order win recently and that has lifted sentiments towards shipbuilders said analysts leading to sharp gains in stock prices of all. Garden Reach Shipbuilders announced an order for the construction and delivery of Additional four (04) multipurpose vessels of 7,500 DWT each, totaling to eight (08) vessel. The order for Garden Reach Shipbuilders & Engineers is from M/s Carsten Rehder Schiffsmakler and Reederei GmbH & Co. The order that is to be executed in 33 Months from the date of manufacturing. As per the release the total value would be approx. $108 million for eight vessels.

Such order flows raise the earnings outlook and are key for driving gains for Defence stocks

As of 16 September the company's order book stood at ₹25230 Crore. And as per the current timelines, a majority of these orders should be executed by FY26 and FY27., said analysts at Antique Stock Broking. Next generation corvettes might aid the order book further. Antique like Garden Reach's growth prospects and maintained Buy ratings with a target price of ₹2,092 indicating about 12% upside.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.