Cochin Shipyard, GRSE shares rally up to 26% in 5 sessions; what fuelled rally in defence stocks

Shares of Cochin Shipyard and Garden Reach Shipbuilders & Engineers (GRSE) in India continued their buying momentum for the fifth straight session on Thursday, rallying nearly 7% in an otherwise weak broader market. Both the public sector undertaking (PSU) stocks have risen nearly 26% in five straight sessions amid slew of positive developments and strong demand for defence stocks in the backdrop of escalated border tensions between India and Pakistan.

On Thursday, Cochin Shipyard shares gained as much as 6.8% to ₹1,814.90 on the BSE, after making a positive start. The PSU defence share opened 1.76% higher at ₹1,729.40, after ending 7.75% higher in the previous session.

At the time of reporting, shares of Cochin Shipyard were trading 5.5% higher at ₹1,792.80, while its market capitalisation rose to ₹47,165 crore. The counter touched its 52-week low of ₹1,180.45 on February 18, 2025, and a 52-week high of ₹2,977.10 on July 8, 2024.

In a similar trend, GRSE shares belled the day at ₹2,223.75, up 1.5% over the previous closing price of ₹2,189.90 on the BSE. The midcap defence stock spiked 6.7% to hit an intraday high of ₹2,337.70, while its market cap crossed ₹26,700 crore.

At the current level, shares of GRSE are down 17.5% from its 52-week high of ₹2,834.60 touched on July 5, 2024. The stock touched its 52-week low of ₹960.55 on May 15, 2024.

What sparked rally in Cochin Shipyard and GRSE shares?

The extended rally in Cochin Shipyard shares were driven the deal with Dubai-based Drydocks World to develop ship repair clusters in India. In a post-market release on Tuesday, the entity, under the Ministry of Ports, Shipping and Waterways, said it signed a pact with the DP World company to strengthen their collaboration to boost India’s ship repair and offshore fabrication capabilities.

“The partnership aims to bring global best practices to India’s maritime sector and expand capacity in line with the country's national goals,” Cochin Shipyard said in a release.

Meanwhile, the surge in Garden Reach Shipbuilders & Engineers shares was triggered by its robust March quarter earnings report. The PSU stock rallied 14.5% in the previous session after the company reported a 118% jump in its net profit to ₹224 crore in Q4FY25, comparable with ₹112 crore reported in the corresponding quarter of the previous financial year. Revenue from operations surged 61.7% YoY to ₹1,642 crore, from ₹1,015.7 crore in the March 2024 quarter. Operating profitability also surged significantly by 141.8% YoY to ₹219, while EBITDA margin expanded to 13.3%, up from 8.9% a year earlier.

Overall, the defence sector remained in upbeat mood as sentiment was lifted after Prime Minister Narendra Modi pushed for 'Made in India' defence equipment in modern warfare after border tensions between India and Pakistan.

The Nifty India Defence index, which tracks the performance of listed defence stocks, was up 2%, with all 18 constituents trading in positive terrain. The top five gainers on the Nifty India Defence index were Astra Microwave Products, Cochin Shipyard, GRSE, Zen Technologies, and Paras Defence and Space Technologies.

In his first address to the nation on Operation Sindoor on Monday evening, Prime Minister Narendra Modi said that during the operation, the effectiveness of indigenous defense equipment was decisively proven. He added, "The world is now witnessing the arrival of Made in India defense systems as a formidable force in 21st-century warfare."

Boosted by the government’s push for indigenous defence capabilities, sectoral leaders Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Bharat Dynamics, Mazagon Dock Shipbuilders, Data Patterns, and defence stocks are seeing strong broad-based buying.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)