Stocks To Buy: Nuvama bets on this shipbuilding and repair stock for up to 40% upside

Brokerage firm Nuvama has initiated coverage on Knowledge Marine and Engineering Ltd. with a "buy" rating in its latest note on Wednesday, December 24. This is the first analyst recommendation that the stock has received since migrating from the SME to the mainboard platform in November 2024.

Nuvama has ascribed a price target of ₹2,500 for Knowledge Marine, which implies a potential upside of 40% from current levels.

The brokerage wrote in its note that India's maritime industry is at an inflection point with emphasis on infrastructure creation and inland waterways.

Knowledge Marine enjoys a 50% order-win rate, amidst scarce competition and high entry barriers, according to Nuvama, who further wrote that the company delivers superior EBITDA margins in the 35% to 40% range, and is diversified across businesses, from dredging to shipbuilding and ancillary services.

Together, Dredging and ancillary services comprise of over 85% of the total order book as of November 2025, which stood at over ₹1,700 crore, while shipbuilding comprised of the rest.

Knowledge Marine's order book is currently up 2x on a year-on-year basis, with orders received from major ports. In addition, the company also has orders worth ₹650 crore for green tugs, according to Nuvama.

Nuvama is anticipating Knowledge Marine's revenue to grow at a Compounded Annual Growth Rate (CAGR) of 58% over financial year 2025-2028, while its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) and its Profit After Tax (PAT) is expected to grow at a 62% and 71% CAGR respectively over the same timeframe.

The brokerage also expects the company's order book to grow at a 42% CAGR over the next three years.

Shares of Knowledge Marine ended 0.6% lower on Tuesday at ₹1,775. The stock has risen 33% in the last one month, taking its year-to-date advance to 60%.