Shares of this shipbuilding stock surged on Friday, despite the volatile market conditions after securing an order of Rs.226 crore for the Design, Build, Operation, and Maintenance of Hybrid Electric Ferries from the Transport Department, Government of West Bengal.
Price Movement
In Friday’s trading session, the share price of Garden Reach Shipbuilders & Engineers Ltd surged 2.3 percent reaching an intra-day high of Rs.1,697.00 per share, from its previous close of Rs.1,658.40 apiece. The shares have retreated since then and are currently trading at Rs.1,666.45 per share.
Contract specifications
Garden Reach Shipbuilders & Engineers Ltd has received two letters of Acceptance of Award for a contract concerning the design, construction, operation, and maintenance of hybrid electric ferries as part of the WBIWTLSD Project under the Transport Department of the Government of West Bengal. The awarding entity is the Transport Department, Government of West Bengal.
The order includes 13 units, comprising 100 Pax Hybrid Electric Ferries for Non-AC Cross Ferry Operations and 200 Pax Twin Deck Hybrid Electric Ferries for Cross Ferry Operations, featuring AC on the main deck.
The execution timeline for the contract is set for 30 months from the effective date of signing, with an approximate value of Rs.226.18 crore (excluding GST).
Order Book
As of July 2024, the company’s order book is valued at Rs.25,231 crore, exceeding its market capitalization of Rs.19,147 crore, with 90 percent coming from shipbuilding. Of this, 85 to 90 percent of the shipbuilding orders are domestic, including those from the Indian Navy.
Future Outlooks
Garden Reach Shipbuilders Ltd. is also anticipating an update on its bid for the Indian Navy’s Corvette (small warship) order, valued at Rs.36,000 crore.
The company is also looking to enter the commercial shipbuilding market, leveraging cost advantages in India, which could diversify its revenue sources and reduce reliance on defense contracts
Strategic Initiatives
GRSE has recently signed contracts for significant projects, including an Rs.840 crore deal with the National Centre for Polar and Ocean Research for constructing a research vessel. This project aligns with India’s Deep Ocean Mission and highlights GRSE’s commitment to expanding its capabilities in advanced shipbuilding.
Financial Overview
In its latest financial update, the company reported net sales of Rs.1,010 crore for Q1 FY25, representing a 34 percent increase from Rs.756 crore in Q1 FY24. Additionally, net profits rose by 13 percent to Rs.87 crore in Q1 FY25, up from Rs.77 crore in Q1 FY24.
About the company
Garden Reach Shipbuilders & Engineers Ltd (GRSE) is a prominent shipbuilding company in India, specializing in the construction of warships for the Indian Navy and Coast Guard, with over 100 warships delivered to date. Operating under the Ministry of Defence, GRSE is also enhancing its capabilities to encompass non-defense vessels, including ocean research ships and modular steel bridges.
Written by – Siddesh S Raskar
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