The Indian shipping industry derived tremendous support from the rising trade. The shipping industry is expected to have exponential growth as India moves towards becoming the third-largest economy.
The rising economic prosperity is adding fuel to the demands of its middle-income population. The increased demand gives rise to rising imports as well as domestic production.
Through multiple government initiatives and aids, the entrepreneurial landscape in India has given way to great export opportunities. Let us look at the industry that is the backbone of this rising trade.
Also read: Top Logistics Stocks to Invest in India
Overview of the shipping industry
India enjoys a strategically empowered coastline because it is at the centre of all important routes. India has the biggest shipbreaking facility in the world and is home to 30% of the world’s shipbreaking industry.
The Maritime India Vision 2030 highlights 150 initiatives to strengthen the maritime sector. Due to globalisation, the world has become more connected. Investment in shipping stocks may give you a leg in this long-haul game.
Further, the government of India has declared an investment of USD 9 billion in the Vadhavan port. The upcoming port is eyeing for a place in the top ten ports in India. The interim union budget 2024-25 allocated ₹2345.45 crore to the Ministry of Shipping.
India is awaiting the establishment of a new shipping company. The company is aspiring to increase its fleet by at least a thousand ships. The company plans on targeting the following:
- Reduction in freight cost.
- Greater revenue.
- Joint ownership with state-run oil, gas and fertiliser companies.
- Joint ownership with state shipping companies
- Joint ownership with foreign companies.
- Reduction in one-third of foreign freight outgoing by 2047
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Top shipping stocks in India
Let us look at the best shipping stocks in India based on market capitalisation that is expected to reap the most benefits from the growing economic strength and government support.
Great Eastern Shipping Company Ltd.
The company is the biggest shipping company in the Indian private sector. The company’s major activities include:
- Shipping
The company owns 43 ships. The ships are involved in the transportation of Crude oil, Petroleum products, Gas and Dry bulk commodities
- Offshore assets
The company operates 23 offshore assets through its fully owned subsidiary, Great Ship India. The company owns activities like Offshore oil fields, Offshore supply vessels and Transportable offshore drilling rigs through its subsidiary.
Shipping Corporation of India Ltd.
The company is the biggest shipping corporation in India. It was provided with the Navaratna status in August 2008. The company performs the transportation of items and passengers.
Let us take a look at the fleet diversification in one of the best shipping stocks in India as of 9MFY24
The company’s biggest clients are Indian oil corporation (13%) and Hindustan Petroleum Corporation (9%).
To make an informed decision on the financial worthiness of this top shipping stock in India, let us look at the company’s focus now.
- Acquisition of second-hand vessels
- Optimisation of leased equipment inventory and
- Expansion of coastal and feeder services
Essar Shipping Ltd.
Essar Shipping Ltd. was incorporated in 2010. The company performs various activities including Sea transportation, Logistics services, Oilfields services, Fleet operating services, Chartering services and Consultancy services.
Although it is one of the top shipping stocks in India, the company is currently facing some turmoil. The company had accumulated losses of ₹6821.80 crore in the financial year 2023. It failed to pay off loans. As a result, lenders started the legal recovery process. The company had to dispose of multiple assets.
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Stock comparisons
Let us compare the best shipping stocks in India in 2024.
| Name | P/E | Market Cap. (₹ Cr.) | DividendYield(%) | NP Qtr.(₹ Cr.) | Qtr. Profit Var (%) | ROCE (%) |
| GE Shipping Co. | 5.60 | 15805.74 | 2.60 | 575.57 | -3.21 | 18.51 |
| S C I | 10.50 | 10513.14 | 0.23 | 290.22 | 613.25 | 7.43 |
| Essar Shipping | – | 868.26 | 0.00 | 642.13 | 308.73 | -207.89 |
Source: Screener as of 25th November 2024.
Key Takeaways
- GE has provided a great profit growth of 194% CAGR
- GE has paid the highest dividend and maintained a heart dividend payout ratio of 20.8%.
- SCI had a bad sales growth of 5.43% over the last five years.
- The sales growth is -56.6%
- Although GE is the best shipping stock in India based on market capitalisation, its year-on-year profit growth is negative.
- GE has provided the highest ROCE whereas that of Essar is running negative.
Bottomline
With the growth of India’s economic strength, the shipping industry is undergoing an enormous rise. The industry enjoys strong backing and cushioning from the government. There is little to no doubt that investors in the top shipping stocks will enjoy good potential returns. However, there is still a need to observe precautions and undertake due diligence.
FAQs
- Which is the No. 1 shipping company in India?
Based on Market Capitalisation, Great Eastern Shipping Company Ltd. is the No. 1 shipping company in India.
The company’s activities include shipping and offshore assets. The company is the largest private-sector shipping company. With more than six-decade of industry experience, the company maintains a massive fleet with great vessels like Jag Aanchal, Jag Alaia, Jag Vikram and Jag Arnav.
- Which are the best logistics stocks in India?
The logistics sector is a huge contributor to the Indian GDP. It is forecasted to experience a growth of USD 591 Billion by 2027. Let us look at the top logistics stocks in India based on market capitalisation.
- Container Corporation of India Ltd.
- Delhivery
- Bluedart express
As India’s population gains greater access to disposable income, the demand increases. An increase in demand created greater business opportunities for these companies.
- What is the future of shipping stocks?
The shipping stocks seem like a good option given the exponential push shipping companies are witnessing. As India strives to become the third largest economy in the world, the shipping industry gives the country a strong backbone. Rising imports and exports have also enabled the shipping industry to gain considerable government support.
- Which shipping stocks are below ₹100?
Essar Shipping Ltd. is one of the top shipping stocks in India and is currently trading at less than ₹100. Various reasons might contribute to this factor including the Inability to pay lenders, Lawsuits from clients and lenders, Selling assets to pay off debt or Disinvestments.
It might help to know that the company has reduced its debt burden to a great extent.
- Who is the biggest shipping company in India?
The Great Eastern Shipping Company Ltd is the biggest private-sector shipping company in India. It is also the best shipping stock based on market capitalisation. However, the Shipping Corporation of India is also the biggest in India and belongs to the list of best shipping stocks based on market capitalisation. It operates as a public sector undertaking.
