Mumbai/IBNS: Cochin Shipyard's shares continued their upward trajectory on Monday (Dec. 2), rising for the seventh consecutive session.

The stock surged by 5 percent, reaching Rs 1,656 per share, a level not seen since mid-October.

This rally follows the announcement of a major contract with the Ministry of Defence (MoD) for the short refit and dry docking of a large Indian Naval vessel, signed on Nov. 30.

Valued at over Rs 1,000 crore, the contract is expected to take around five months to complete, according to the company's exchange filing.

In addition, on Nov. 22, Cochin Shipyard signed a Memorandum of Understanding (MOU) with Seatrium Letourneau USA, Inc (SLET) to collaborate on the design and critical equipment for jack-up rigs aimed at the Indian market.

This partnership aligns with the government’s ‘Make in India’ initiative.

The company stated that this partnership combines Cochin Shipyard’s extensive shipbuilding experience with SLET’s technical expertise and design capabilities, aiming to capitalise on opportunities in the Mobile Offshore Drilling Units (MODUs) sector to meet India’s growing needs.

After facing significant selling pressure from August to October 2024, which saw the stock lose 43 percent of its value, Cochin Shipyard shares regained momentum in November, rising by 5.35 percent.

Since the close of October, the stock has increased by 10 percent.

The renewed interest in defence stocks comes after a sharp correction, making them more attractive.

This shift has prompted brokerages to issue positive outlooks, noting the sector’s strong order books, government support, and promising long-term growth potential.

Additionally, the BJP-led Mahayuti alliance's decisive win in the Maharashtra Assembly elections provided further momentum to defence stocks.

Global brokerages recently highlighted that India's defence sector offers a strong growth trajectory, fueled by increasing capital expenditure.

Defence spending in India is projected to reach $150 billion over the next five years, a significant jump from the $85 billion spent in the previous five years.