3 defence stocks, 13x returns in 5 years. But with order books set to jump 5x, the rally may not be over – Stock Insights News

India’s defence sector has quietly become a multi-bagger theme. Over the last five years, a handful of listed defence stocks have delivered up to 13x returns, driven by a steady rise in orders, the government’s push for indigenisation, and growing export opportunities. But after a strong correction from their all-time highs, these stocks are back in momentum.

Many of these companies have record-high order books, and some are now poised for a 3x jump in fresh orders, thanks to a new wave of domestic and international deals in the pipeline. That has opened up a new leg of growth, triggering a new leg of the rally.

In this article, we look at three defence stocks, the size of upcoming orders, and whether there is more scope for rerating.

#1 Mazagon Dock Shipbuilders

Mazagon Dock is India’s premier conventional (diesel-electric) submarine manufacturer. It builds destroyers, submarines, and corvettes for the Indian Navy, and can build 11 submarines and 10 warships.

The company delivered one destroyer every 18 months between 2014 and 2025, bringing the total to seven. It has also built three frontline combat ships—INS Nilgiri, INS Surat, and INS Vagsheer- commissioned on January 15, 2025. Mazagon is also the lead shipyard for building four Nilgiri-class stealth frigates.

Mazagon’s revenue grew 30% from last year to ₹82.6 billion in 9MFY25, while margins nearly doubled to 23% (from 13% in 9MFY24). As a result, net profit surged almost 64% to ₹20.9 billion.

As of Q3FY25, the company’s order book stood at ₹348 billion, nearly 3x its trailing twelve-month revenue of ₹113.6 billion. However, these numbers could rise multifold over the next two years.

Antique estimates that Mazagon’s order book could increase about 5x by the end of FY27. This growth will be led by the Indian Navy’s proposed procurement of three additional Kalvari-class submarines from Mazagon, which could add about ₹350 billion to the order book.

In addition, the company and its technical partner, ThyssenKrupp Marine, are the sole bidders for the ₹600 billion P751 program to build six next-generation submarines. Further, orders for P17B frigates, next-generation corvettes, and destroyers are also expected.

Antique estimates Mazagon’s total order book will grow from ₹348 billion in FY25 to ₹ 1.3 trillion by FY27. To meet this anticipated demand, the company plans to invest in a new shipbuilding and repair facility that will nearly double its capacity in 4-5 years.

The capex will also enable Mazagon to accept larger vessels. Mazagon is also scaling up its ship repair business. It has signed a Master Ship Repair Agreement (MSRA) with the US government to repair US Navy ships. To strengthen its vertical, it plans a new shipyard at Nhava in Navi Mumbai.

That said, valuations look elevated. Mazagon trades at a PE of 52x, at a 300% premium to a 10-year median of 17x. Relatively, it trades at par with Garden Reach (54x), and at a discount to Cochin (65x).

Mazagon Dock Share Price

#2 Garden Reach Shipbuilders

Garden Reach Shipbuilders primarily constructs warships for the Indian Navy and the Indian Coast Guard. It also builds commercial ships and undertakes engineering and engine production activities.

Notably, it was the first Indian shipyard to export warships. The company can build frigate-sized warships, but its strength lies in building smaller vessels for the Navy and Coast Guard.

Garden Reach revenue increased 41% from last year to ₹50.8 billion in FY25, with margins steady at about 15%. Net profit jumped 48% to ₹5.3 billion. A strong order book and timely execution supported the strong all-around performance.

The current order book stands at ₹239 billion and is expected to be executed over the next 3-4 years. It comprises three P17A stealth frigates (delivery in FY26 and FY27), eight anti-submarine warfare shallow water crafts, a large survey vessel project, and next-generation offshore patrol vessels.

The export order book comprises two projects for the Government of Bangladesh and six multi-purpose vessels for a German client.

According to Antique, the upcoming award of the Next-Generation Corvettes could be the near-term trigger.

The company has submitted bids worth ₹360 billion for eight corvettes. Five will go to the L1 bidder and three to the L2 bidder. The L1 and L2 status is expected to be announced in FY26, as the request for proposal was issued in FY25.

Additionally, the P17 Bravo frigates, with an order size of ₹700 billion, can be finalised by the end of FY26. If secured, it would significantly expand the order book. Overall, the pipeline is estimated at around ₹1.2 trillion–about 5x its current order book.

To meet demand, it is also expanding capacity – from 24/20 vessels in the first half of FY20 to 28 vessels by FY25. This expansion is aimed at easing capacity constraints, shortening delivery times, enabling bidding for larger orders, and improving productivity.

However, Garden Reach’s valuations are also elevated. It trades at a PE of 54x, over 300% premium to the 10-year median of 16x. Comparatively, it trades at par with Mazagon (52x) and at a discount to Cochin (65x).

Garden Reach Shipbuilders Share Price

#3 Cochin Shipyard

Cochin Shipyard is a leading shipbuilding and ship repair company. It operates a dry dock for shipbuilding capable of handling vessels up to 1.1 lakh deadweight tonnage (DWT) and a dry dock for ship repair capable of handling vessels up to 1.25 lakh DWT.

It has built and refitted some of India’s largest ships, including the country’s first indigenous aircraft carrier, INS Vikrant. It has partnered with industry giants, including Rolls-Royce Marine (Norway), IHC Holland BV (Netherlands), & Robert Allan (Canada).

Cochin Shipyards operates in two segments: shipbuilding and ship repair. Shipbuilding remains the primary revenue contributor, accounting for 57% of total revenue in FY25, while repair contributed 36%.

In contrast, the ship repair segment generates a profit before tax (PBT) margin of 39%, more than twice the 16% margin in shipbuilding. Faster execution time, lower capital requirements, and higher margins on parts support higher margins.

Cochin Shipyard’s turnover grew 26% over the previous year to ₹48.2 billion in FY25. This growth was driven by an 85% rise in ship repair revenues to ₹18.6 billion. With strong growth in ship repair, segment PBT also grew 101% to ₹7.3 billion.

Meanwhile, shipbuilding revenue grew 5% to ₹29.6 billion, with PBT declining 22% to ₹4.6 billion. As a result, despite strong growth in the repair segment, net profit grew only 6% to ₹8.3 billion.

Cochin Shipyard’s order book stands at ₹225 billion, over four times its FY25 revenue, providing revenue visibility for the next five years. However, Antique Broking has flagged a weak near-term pipeline of ₹79 billion. The order boom depends much on the Indigenous Aircraft Carrier-2, on which there is a lack of consensus.

Looking ahead, the company is best-positioned to lead India’s ship-repair opportunity. According to Antique, India’s global share in ship repairs is less than 1%, despite 7-9% of global trade passing through the Indian coast.

This opens up significant long-term potential. The global ship repair market is estimated to grow over 3x to $40 billion by 2030, from the current $12 billion. To tap into this opportunity, Cochin could benefit from offering repair services to the Indian Navy and allied forces like the US Navy’s 5th and 7th fleets in the Indian Ocean & Arabian Sea.

The company has already signed a Master Shipyard Repairs Agreement with the US Navy, which enables US ships to dock and undergo maintenance refits. It partnered with Drydocks World to explore joint repair opportunities and signed an MoU with Maersk to develop the ship repair portfolio.

Cochin has also completed its International Ship Repair Facility (ISRF) project to cater to the growing repair demand, which cost ₹9.7 billion.

However, valuations appear stretched. It trades at a price-to-earnings (PE) of 65x, at a 500% premium to 10-year median of 12x. Comparatively, it is trading at a premium to Mazagon Dock (52x) and Garden Reach (54x).

Cochin Shipyard Share Price

Conclusion

Cochin, Mazagon, and Garden Reach have strong order books with multi-year revenue visibility and the potential for significant scale-up if upcoming bids materialise. However, execution remains key, as shipbuilding involves a long gestation period.

That said, valuations have risen sharply, leaving little room for error. For investors, tracking execution, capacity expansion, and visibility on large orders will be key to judging whether the recent rerating can be sustained.

Disclaimer

Note: Throughout this article, we have relied on data from and the company’s investor presentation. Only in cases where the data was unavailable have we used an alternate but widely used and accepted source of information.

The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.

About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.

A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.

Disclosure: The writer and his dependents do not hold the stocks discussed in this article.

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