Mazagon Dock, GRSE shares fall up to 4% on $6 billion setback. Details here

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Shares of Mazagon Dock Shipbuilders and Garden Reach Shipbuilders & Engineers (GRSE) fell by up to 4.3% on Friday after India’s $6 billion plan to build submarines met a setback because of contractor complaints over proper procedures being followed during tests at sea.

While Mazagon Dock shares fell 4.4% to hit the day's low of Rs 4,741.30 on the NSE, GRSE shares dropped 4% to touch the day's low of Rs 1,701.85.


The development is expected to delay the Indian Navy’s plans to bolster its capabilities even as China continues expanding its presence in the Indian Ocean.

India planned to build six conventional diesel-electric submarines, Bloomberg reported citing two senior officials who were directly aware of the situation.


The project also represents a test of Prime Minister Narendra Modi’s new defense acquisition policy, the report said, adding that the policy requires foreign manufacturers to partner and provide local firms with technology to build military hardware in India, the world’s largest weapons importer.

German defense manufacturer ThyssenKrupp Marine Systems, in partnership with India’s state shipyard Mazagon Dock Shipbuilders, and private shipbuilder Larsen & Toubro Ltd. with Spain’s Navantia SA, are competing for the project, the report said further.Notwithstanding a recent correction in many PSU counters, Mazagon's returns have been stellar at 132% over the past 12 months. In 2024, so far, the stock has delivered returns of 110%.Meanwhile, GRSE has rallied 110% over a 1-year period while yielding 96% on the year-to-date basis.

Mazagon Dock Shipbuilders had reported a 75.7% YoY jump in its profit after tax (PAT) to Rs 585 crore for the quarter ended September 2024. The same stood at Rs 332.9 crore in the year-ago period. Revenue from operations for the period rose to Rs 2,756.8 crore, up from Rs 1,827.7 crore in the same quarter of the previous financial year, marking a 50.8% YoY increase.

GRSE's PAT in Q2 was reported at Rs 97.8 crore up from Rs 80.7 in the year-ago period. Revenue grew to Rs 1,227.8 crore in the same quarter versus Rs 969.5 in the year-ago period.

Also Read: Tata Motors, Trent, 5 more bluechip stocks from Tata stable fall up to 23% in 3 months. What should you do?

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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