This PSU shipbuilding stock has zoomed 100% in less than one month

Garden Reach share hit a new high of Rs 2,296.75, surging 9%, after the company signed a contract for the construction of advance ocean-going tug for Bangladesh Government

Garden Reach Shipbuilders news: Shares of Garden Reach Shipbuilders & Engineers (GRSE) hit a new high of Rs 2,296.75, surging 9 per cent on the BSE in Monday's intraday trade, after the company signed a contract for construction of advance ocean-going tug for the government of the People's Republic of Bangladesh. The value of the order is approximately $21 million, which will be executed in 24 months.

At 09:51 AM, GRSE share price was trading 8 per cent higher at Rs 2,274.15 as compared to 0.2 per cent rise in the benchmark BSE Sensex. A combined 3.8 million shares have, so far, changed hands on the NSE and BSE. Garden Reach Shipbuilders market capitalisation (market-cap or m-cap) reached Rs 26,278 crore till the time of writing of this report.

With today's rally, the stock of the state-owned shipbuilding company has doubled, zooming 100 per cent from a level of Rs 1,148.10 touched on June 6, after bagging multiple international orders.

Backed by a strong order book, the company's ongoing projects at a maximum revenue recognition phase, coupled with more orders on the anvil, the management is confident of sustained growth in the coming years.

On June 22, for instance, GRSE informed the stock exchanges 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.

In an exchange filing, the company said that it has signed an agreement with Carsten Rehder Schiffsmakler and Reederei GmbH & Co., KG Germany, for the construction and delivery of four multi-purpose vessels of 7,500 DWT each, with an option of building another four ships in the near future.

Further, on June 7, GRSE had informed that the company became the lowest bidder (L1) for construction of a Research Vessel for Defence Research and Development Organisation (DRDO). The order value is likely to be Rs 500 crore. The contract is currently under negotiation and has not yet been signed, the company said.

On June 5, GRSE said that it has entered a contract with the Bangladesh Inland Water Transport Authority (BIWTA) for the Procurement of one Trailing Suction Hopper Dredger (Hopper Capacity 1000 m3) with spare parts. Total contract value is $16.57 million.

Meanwhile, as of March 31, 2024, GRSE's orderbook stood at Rs 22,650 crore, a decline of 10 per cent year-on-year, of which Rs 22,600 crore is the shipbuilding backlog.

Order backlog for P-17A frigate stood at Rs 12,170 crore, survey vessels at Rs 940 crore, ASWSWC at Rs 4,890 crore, and NG-OPV at Rs 3,360 crore.

Besides, at the end of March 2024, GRSE shipbuilding capacity stood at 20 ships – eight large and 12 small & medium ships. The company is looking to expand capacity to 24 ships by the end of calendar year 2024 (CY24). For ship repairs, it has acquired three dry docks on lease from the Kolkata Port Trust and it further plans to add one more. Additionally, it plans to utilise spare capacity of partner yards to ramp up execution.

GRSE has built over 790 platforms including 109 warships for the Indian Navy, Indian Coast Guard, and friendly foreign countries - highest warships built & delivered by any Indian shipyard till date.

From Frigates, Corvettes, Fleet Tankers, Landing Ship Tank, Landing Craft Utility to Survey Vessels, Offshore Patrol Vessels and Fast Attack Craft - the repertoire is rich and varied. In addition to shipbuilding & ship repair, GRSE is also engaged in engine production and other engineering activities. The engineering division manufactures deck machinery items, pre-fabricated portable steel bridges and marine pumps.