Defence stock engaged in catering to the shipbuilding requirements of the Indian Navy and the Indian Coast Guards jumped 10 percent in the day’s trade upon receiving a work order worth Rs. 175 Crores from the Bangladesh Ministry of Defence.
Price Action
With a market capitalization of Rs. 26,245 Crores, the shares of Garden Reach Shipbuilders & Engineers Limited were trading at Rs. 2,291.10 per equity share, up 9 percent from its previous day’s close price of Rs. 2,099.55.
What happened
Garden Reach Shipbuilders & Engineers Limited has received a work order for a consideration of $21 Million or Rs. 175 Crores from the Directorate General Defence Purchase, Ministry of Defence, Government of the People’s Republic of Bangladesh.
The said work order received by Garden Reach Shipbuilders & Engineers Limited is for the Design, Build and delivery of one quantity of advanced Ocean Going Tug Vessel and it should be executed within 24 months.
In Addition, recently it has been declared as the Lowest Bidder (L1) by the Defence Research and Development Organisation (DRDO) for the construction of a Research Vessel for a consideration of Rs. 500 Crores.
About the company
Garden Reach Shipbuilders Limited is a shipbuilding company catering to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard. It is engaged in the construction, and engineering of commercial vessels and engine production activities. It is mainly engaged in the construction of warships/vessels for the defence sector.
As of 31st March 2024, Garden Reach Shipbuilders & Engineers Limited has a strong order book of Rs. 22,652.68 Crores consisting of P17 Alpha Project, Survey Vessel Large Project, Anti-Submarine Shallow Water Craft Project, Next Generation Ocean Going Petrol Vessel, multi-purpose vessels, and many others.
In Q4FY24, the FII/FPI increased their holding in Garden Reach Shipbuilders & Engineers Limited from 2.86 percent to 3.26 percent by purchasing an additional 0.39 percent stake.
Financials and Ratios
Its Revenue from operations grew by 69 percent from Rs. 601.17 Crores in Q4FY23 to Rs. 1,015.73 Crores in Q4FY24, accompanied by profits of Rs. 55.3 Crores to Rs. 111.6 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 23 percent and a return on capital employed (ROCE) of 28.4 percent. It has reported a debt-to-equity ratio of 0.04.
Written by: Bharath K.S
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