PSU shipbuilders sail strong; Cochin Shipyard, Mazagon Dock, others gain up to 5%

While Container Corporation stock has rallied 64 percent in the last one year, Garden Reach Shipbuilders stock has zoomed 120 percent during this period.

The Cochin Shipyard stock jumped more than 4 percent to hit a fresh high of Rs 1,377 on April 25, extending the rally to a fifth consecutive session on higher volumes.

Other shipbuilding stocks, including Mazagon Dock, Shipping Corporation and Garden Reach Shipbuilders, too, gained  up to 5 percent.

“Expectation of better turnover in Q4FY24 and full year FY24 coupled with block deals in especially Cochin Shipyard has led to a strong rally in the major PSU shipbuilding stocks,” AR Ramachandran of Tips2trades said.

By early afternoon, one crore shares of the Cochin Shipyard had changed hands on NSE and BSE combined against the average weekly volume of 76 lakh. The market cap of the defence stock climbed to Rs 34,910 crore.

The stock has gained 431 percent in the past year, outpacing the benchmark Nifty, which has risen 25 percent.

According to analysts, the counter has seen a stellar run as government's pushes for defence self-sufficiency with programmes like Make in India. The company has a good set of sales number and an impressive order book size.

Domestic mutual funds increased stake in Cochin Shipyard in the March quarter. According to the recent shareholding pattern available on BSE, 12 funds held a 2.13 percent stake in the company against 1.87 percent holding by 9 firms in the December quarter.

Foreign portfolio investors (FPIs), too, raised their stake to 5.23 percent in March from 4.1 percent in the previous quarter.

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Sail away

Technically, Cochin Shipyard is strong but also overbought on the daily charts, with the next resistance at Rs 1,432.

“Investors should keep booking profits as a daily close below support of 1,258 could lead to the target of 1,046 in the near term,” Ramachandran said.

Mazagon Dock stock price is again bullish but slightly overbought with next resistance at Rs 2,478. “Investors should keep booking profits as daily close below support of 2,259 could lead to a fall till 1,991,” he added.

The stock has delivered stellar returns of 224 percent in the last 12 months.

As for Container Corporation, the stock looks bullish on the daily charts with strong support at Rs 948. “A daily close above resistance of 1040 could lead to 1,119 in the near term,” he said.

Garden Reach Shipbuilders stock price hit a record high of Rs 1,077.85 and is bullish but slightly overbought with the next resistance at 1,161. “Investors should keep booking profits as daily close below the support of 977 could lead to a fall till 792 level in the near term,” the expert told Moneycontrol.

Also Read | Axis Bank top Nifty gainer as Q4 results impress Street; brokerages remain bullish

While Container Corporation stock has rallied 64 percent in the past year, Garden Reach Shipbuilders has zoomed 120 percent during the period.

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