Budget 2025: Mazagon Dock, Cochin Shipyard shares fall up to 5% post Defence allocation

Shares of Mazagon Dock Shipbuilders Ltd., Cochin Shipyard Ltd. and Garden Reach Shipbuilders Ltd. gained between 5% to 6% on Friday to register their best week in over a month ahead of the Union Budget announcement on Saturday, February 1.

While Cochin Shipyard shares gained in four out of the five trading sessions last week, those of Mazagon Dock gained in three of those.

Shipbuilding PSUs, along with their defence peers rallied on Friday ahead of the Union Budget, in anticipation of an increase in defence allocation.

Brokerage firm Elara Securities expects the Defence budget to rise by 7-8%, reaching ₹1.9 lakh crore. Most of the defence capex is likely to be towards higher allocation for aircraft & engines, naval fleet and other equipment.

All three stocks are yet to report their quarterly results for the December quarter.

During the Budget presented in July 2024, Finance Minister Nirmala Sitharaman had announced tax sops like a presumptive taxation regime for cruise ship operators of non-residents.

"Mazagon Dock I think valuation wise is now very comfortable. It's a leader in the defence shipyard. if you look at the results, Q2 have been very strong numbers," Siddhartha Khemka of Motilal Oswal had said post its September quarter results on November 29.

Shares of Mazagon Dock have also outperformed their peers when it comes to declining from their peak. The stock is down 15% from its peak, while those of Cochin Shipyard is down 48% from its peak, while those of Garden Reach are down 42% from their peaks.