Garden Reach Shipbuilders and Magazon Dock Shipbuilders have been two of the stocks that have created the most buzz in the past year. In this article, we take a look at both defence stocks and compare their performance on various parameters.
Returns
In the past year, both stocks have riden the bullish wave observed in the border defence sector. Both Garden Reach and Mazagon Dock’s share prices have gone up over 136% in the past year.
As you can see from the chart above, an investment in any of the two would have given you the same return in the past year. The Mazdock investment would have grown to around ₹23,278, while the GRSE holding would have surged to ₹23,503.
Financials
Over the past few years, the companies have shown strong growth in both revenue and profit. Over the past three years, Garden Reach’s revenue has grown with a compound annual growth rate (CAGR) of 46.6%, while Mazdock’s revenue has seen a CAGR of around 33%.
Net profit for Garden Reach has seen a three-year CAGR of 32.5%, while Mazdock’s profit has grown with a CAGR of 56.7%. Here is a snapshot of the companies’ numbers over the last three years
| Year Ending | Metric | Garden Reach Shipbuilders | Mazagon Dock Shipbuilders |
|---|---|---|---|
| Mar ’24 | Revenue | 3,592.6 | 9,466.6 |
| Profit | 357.3 | 1,845.4 | |
| Mar ’23 | Revenue | 2,561.1 | 7,827.2 |
| Profit | 228.1 | 1,072.7 | |
| Mar ’22 | Revenue | 1,757.5 | 5,733.3 |
| Profit | 189.5 | 586.5 |
Mazagon Dock Shipbuilder’s market cap is currently around ₹89,000 crore, while GRSE’s market cap is around ₹20,000 crore.
Order Book
Both companies have a strong order book providing revenue visibility for the coming years. Mazagon Dock Shipbuilders order book at the end of June 30, 2024, stood at ₹36,839 crore. This is a decrease from the ₹38,561 crore order book reported at the end of March 2024.
Garden Reach, on the other hand, saw its order book expand to ₹25,231 crore. This is an 11% increase from the ₹22,652.68 crore order book reported at the end of March 2024.
Analyst Ratings
Analysts have a cautious outlook on both stocks. ICICI Securities has a “sell” call on both stocks. The brokerage firm has a ₹1,165 target price on Mazdock and ₹515 target on Garden Reach. Nirmal Bang also has a “sell” rating for Mazagon Dock with a target price of ₹4,468.
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