The global shipbuilding market is projected to expand from $150 billion to $180 billion by 2030, presenting a significant opportunity for Indian shipbuilders to increase their share. With a focus on indigenizing the supply chain and enhancing technological capabilities, the Indian shipbuilding industry is poised for a transformative phase in the coming years.
With a market capitalization of Rs. 20,145 Crores, the shares of Garden Reach Shipbuilders & Engineers Ltd a leading shipbuilding company in India, operating under the Ministry of Defence, serving the Indian Navy and Indian Coast Guard, opened at Rs. 1,775 per share gaining around 1.14 percent from its previous day’s close price of Rs. 1,754.90.
Financial Overview
State-run Garden Reach Shipbuilders & Engineers Limited reported consolidated revenue of Rs.1,010 crore for the quarter ending June 30, 2024, marking a 34 percent increase from Rs.756 crore in the same quarter last year, though slightly down by 0.6 percent from Rs.1,016 crore in Q4 FY24.
The company’s net profit for Q1 FY25 was Rs.87 crore, up 13 percent from Rs.77 crore in Q1 FY24 but down 22 percent from Rs.112 crore in Q4 FY24.
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Growth Guidance
Garden Reach Shipbuilders Ltd. aims to achieve a revenue target of Rs.10,000 crore by FY 2030, a more than threefold increase from the Rs.3,592 crore revenue reported at the end of the financial year 2024.
Garden Reach has also maintained its 25 percent revenue growth guidance for the current financial year, following a 34 percent yoy revenue increase for the June quarter.
Management further expressed confidence in maintaining profit-after-tax (PAT) margins of 8 percent in the coming quarters and years.
Order Book
As of July 2024, the company’s order book is valued at Rs.25,231 crore, exceeding its market capitalization of Rs.20,406 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.
In an interview with CNBC-TV18, Mr. PR Hari, Chairman and Managing Director of Garden Reach Shipbuilders Ltd., expressed confidence stating, “To touch Rs.10,000 (revenue) by 2030 that is our stated mission by 2030. With our current order book and expected orders worth Rs.1,500 crore to Rs.2,000 crore, we believe we can surpass this target, especially with anticipated next-generation and major Navy contracts”.
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.
By aligning its strategic plans with industry trends, government initiatives, and customer expectations, GRSE aims to position itself as a leading player in the global shipbuilding market while contributing to India’s self-reliance and growth.
Written by – Siddesh S Raskar
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