All sectors
Defence
Shipbuilding & Submarines
176-ship navy by 2035 — advance-funded order books measured in decades
Heavy capitalOligopoly4 listed names covered
The Navy's 176-ship plan + P-75I submarines + IAC-2 carrier decision give Indian yards the longest visibility in the sector. The model is unique: customer advances fund construction (negative working capital), so ROCE prints 30-43% on 8-18% margins. GRSE quadrupled revenue in four years — proof the yards can actually accelerate.
TAM: ₹2L Cr+ contracted naval pipeline; P-75I ₹70K Cr pending; IAC-2 ~₹40K Cr pending; export patrol/OPV market opening (Mauritius, Vietnam, Philippines enquiries).
Demand drivers
- ▸Chinese navy at 370+ ships forces Indian fleet math
- ▸P-17B frigates (7 ships, ~₹70K Cr) next big competitive award
- ▸Submarine line continuity: 3 add-on Scorpènes signed 2025 keep Mazagon hot for P-75I
- ▸Ship exports: GRSE's Bangladesh/Guyana deliveries prove the lane
Competitive dynamics
- ▸Nominated orders fading → two-yard competitive bids (P-17B) compress margins
- ▸L&T Kattupalli is the private wolf — won fleet-support ships, bids P-75I
- ▸Cochin's repair/MRO duopoly (with private Chowgule) is quietly the best-margin niche
Unit economics
- ▸Destroyer ≈ ₹8K Cr, frigate ≈ ₹9-10K Cr (P-17B), Scorpène ≈ ₹6K Cr, carrier ₹40K Cr+
- ▸Margins: 8-11% EBITDA on hulls, 15-25% on repair/refit
- ▸Advances = 30-50% of balance sheet → ROCE 30%+ at Mazagon/GRSE despite thin margins
Key programs
- ▸P-75I (6 AIP submarines) — award imminent
- ▸P-17B (7 frigates) — RFP 2026
- ▸IAC-2 carrier — CCS pending
- ▸Next-gen corvettes (8), survey vessels, ASW-SWC deliveries FY26-28
What an expert watches
- ▸P-75I winner + work share
- ▸IAC-2 sanction timing
- ▸GRSE margin trajectory (8%→11% underway)
- ▸Yard capex for parallel-build capacity (Mazagon ₹5K Cr expansion)
Sector scoreboard — real data
| Company | Mkt cap | P/E | OPM | ROCE | Sales 3Y | Fundamental | Tech score | Decision |
|---|---|---|---|---|---|---|---|---|
| Mazagon Dock | ₹94.6K Cr | 36.6x | 17% | 36.0% | 18.4% | 81 | 28 | Hold |
| Cochin Shipyard | ₹37.0K Cr | 51.6x | 16% | 16.0% | 28.5% | 65 | 27 | Hold |
| Garden Reach Shipbuilders | ₹29.4K Cr | 39.2x | 11% | 43.0% | 39.8% | 82 | 44 | Hold |
| Krishna Defence | ₹1.9K Cr | 47.2x | 22% | 30.7% | 56.4% | 97 | 81 | Hold / Watchlist |