Ideas For Profit | Mazagon Dock, Cochin Shipyard, or Garden Reach Shipbuilders; which shipbuilding company looks more compelling?

Shipbuilding is emerging as a compelling proposition because of an exciting business model, visibility, and valuation.

Mazagon Dock Shipbuilders (MDSL), Garden Reach Shipbuilders & Engineers (GRSE), and Cochin Shipyard put together now account for a market capitalization of a little over Rs 10,000 crore, which is one-tenth of their order book of nearly one lakh crore.

What’s interesting is that on average they are trading at less than 10 times their fiscal 2020 earnings and offering a dividend yield of close to 5 percent.

While on an aggregate basis the numbers are encouraging, here’s what we found during our deep dive into their individual businesses, opportunities, financials, and other aspects of valuations.