Garden Reach Shipbuilders stock price rallies 11% on $54 million order win

The rise in stock price came after the company announced that it has secured an international order worth $54 million for the construction and delivery of four multi-purpose vessels of 7,500 DWT each

Garden Reach Shipbuilders in focus: Shares of shipbuilding company Garden Reach Shipbuilders and Engineers (GRSE) climbed as much as 10.51 per cent to hit an intraday high of Rs 1,818.20 per share on Monday. 

The rise in the stock price came after the company announced that it has secured an international order worth $54 million for the construction and delivery of four multi-purpose vessels of 7,500 DWT each, with an option of building another four (04) ships in near future. 

In an exchange filing, GRSE said, “We wish to inform you that the company has signed a contract for construction and delivery of multi-purpose vessels.”

“The vessels will be 120 metres long and 17 metres wide with a maximum draft of 6.75 metres. Each of them can carry 7,500 metric tonnes of cargo. The vessels will have a single cargo hold each to accommodate bulk, general and project cargoes. Containers will be carried on hatch covers. The ships have been specifically designed to carry multiple large windmill blades on deck,” GRSE said in a statement.

Garden Reach Shipbuilders received the order from Carsten Rehder Schiffsmakler and Reederei GmbH & Co.

The contract is expected to be completed in 33 months, GRSE added.

GRSE is engaged in building warships and other vessels for the Indian Navy and Indian Coast Guard. It has also diversified into engineering business with a product profile of pre-fabricated steel bridges, various deck machinery items and assembly, as well as testing & overhauling of marine diesel engines. 

GRSE has been a pioneer in the export of warships. In 2014, the CGS Barracuda, an Offshore Patrol Vessel, built by GRSE, was exported to Mauritius. This was the first warship to be exported by India, the company said. 

In 2021, the GRSE-built Fast Patrol Vessel PS Zoroaster was exported to the Seychelles. The ship returned to GRSE earlier this year for a refit that was completed in record time, GRSE claimed. The shipyard is also currently working on six patrol boats and a TSH dredger for the Government of Bangladesh. 

In 2023, GRSE delivered the MV Ma Lisha, a passenger-cumAnnexure-I cargo ocean-going ferry to the Cooperative Republic of Guyana. It is the largest and most advanced ferry in that country now, the company added. 

As on 31 March 2024, the Government of India held 74.50 per cent in the company.

Financial performance

GRSE’s revenue from operations surged 69 per cent to Rs 1,016 crore in Q4Fy24, as compared to Rs 601 crore in the same period last fiscal year (Q4FY23).

The PSU's Ebitda also saw a robust increase, rising 84 per cent year-on-year to Rs 166 crore in Q4FY24 from Rs 90 crore in the corresponding period last year. 

Profit after tax (PAT) zoomed 104 per cent to Rs 112 crore in the March quarter of FY24, up from Rs 55 crore in FY23.

At 12:07 PM, shares of GRSE were trading 7.16 per cent at Rs 1,763 per share. By comparison, BSE Sensex was trading 0.17 per cent higher at 77,340.99 levels.