Garden Reach Shipbuilders And Magazon Dock Shipbuilders were two of the stocks that generated the most excitement last year. In this article, we take a look at both defense stocks and compare their performance on various parameters.
Returns
Over the past year, both stocks have benefited from the bullish momentum in the border protection sector. Both Garden Reach and Mazagon Dock’s share prices have risen by over 136% over the past year.
As you can see from the chart above, investing in either of them would have given you the same return last year. The Mazdock investment would have gone up to around ₹23,278 while the GRSE holding would have gone up to ₹23,503.
Finance
In recent years, the companies have experienced strong revenue and profit growth. Over the past three years, Garden Reach’s revenue grew at a compound annual growth rate (CAGR) of 46.6%, while Mazdock’s revenue recorded a CAGR of around 33%.
Garden Reach’s net profit has seen a compound annual growth rate of 32.5% over the past three years, while Mazdock’s profit has grown by 56.7%. Here is a snapshot of the companies’ numbers over the past three years
| End of year | Metric | Garden Reach Shipbuilders | Mazagon Dock Shipbuilders |
|---|---|---|---|
| March ’24 | revenue | 3,592.6 | 9,466.6 |
| Benefit | 357.3 | 1,845.4 | |
| March ’23 | revenue | 2,561.1 | 7,827.2 |
| Benefit | 228.1 | 1,072.7 | |
| March ’22 | revenue | 1,757.5 | 5,733.3 |
| Benefit | 189.5 | 586.5 |
The current market capitalization of Mazagon Dock Shipbuilder is around Rs 89,000 crore, while the market capitalization of GRSE is around Rs 20,000 crore.
Order book
Both companies have a strong order backlog, which enables a sales forecast for the coming years. Mazagon Dock Shipbuilders The order book stood at Rs 36,839 crore as on June 30, 2024. This is a decrease from the order book of Rs 38,561 crore reported at the end of March 2024.
Garden Reach, on the other hand, was able to expand its order book to Rs 25,231 crore, an increase of 11% over the order book of Rs 22,652.68 crore reported at the end of March 2024.
Analyst ratings
Analysts are cautious on both the stocks. ICICI Securities recommends a ‘sell’ rating on both the stocks. The brokerage has a target price of ₹1,165 on Mazdock and a target price of ₹515 on Garden Reach. Nirmal Bang also recommends Mazagon Dock with a target price of ₹4,468.
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