InvestorQ : Why are shipbuilding stocks up so sharply in recent past?
rhea Babu made post

Why are shipbuilding stocks up so sharply in recent past?

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Riya Dwivedi answered.
1 month ago
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Here is a quick summary of listed shipping stocks in India.

Company

Price

52-week High

52-week Low

Market Cap

P/E Ratio

ROE

Garden Reach

Rs.299.75

Rs.319.00

Rs.167.65

Rs.3,434 crore

17.85X

16.61%

Mazagon Docks

Rs.317.95

Rs.333.15

Rs.191.70

Rs.6,413 crore

9.88X

21.42%

Cochin Ship

Rs.346.00

Rs.433.75

Rs.281.00

Rs.4,551 crore

8.67X

12.94%

Let us take a quick look at the 3 stocks in the shipbuilding space listed in India. The quick take is that most of them are quoting at very close to their highs but at the same time they are quoting at low P/E valuations despite attractive ROEs. More importantly, in terms of market cap, these companies are extremely small sized companies and have tremendous scope for growth and appreciation from current levels.

An important trigger for the spike in the stock prices of shipbuilding stocks was the economic crisis in Sri Lanka. Due to the political and economic uncertainties in Sri Lanka, the consequent congestion at Colombo port forced more ships to turn towards Indian ports like Chennai, Ennore, Mundra and VO Chidambaranar Port in Tuticorin. Apart from the cargo shift, even the defence orders surge helped these shipbuilders.

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