Why are shipbuilding stocks up so sharply in recent past?

Here is a quick summary of listed shipping stocks in India.

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.