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Garden Reach Shipbuilders Shares Surge 6% After Firm Emerges Lowest Bidder in Rs 25,000-Cr Indian Navy Project

Garden Reach enters FY26 with a robust order book of Rs 22,680 crore, providing strong revenue visibility

Garden Reach Shipbuilders Shares Surge 6% After Firm Emerges Lowest Bidder in Rs 25,000-Cr Indian Navy Project
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Shares of Garden Reach Shipbuilders surged as much as 6% on May 22 after the company emerged as the lowest bidder for a mega Rs 25,000 crore construction project, touted by the Indian Navy.

The project encompasses the construction of five Next Generation Corvettes (NGC) ships for the Indian Navy and is slated to be awarded to the lowest bidder.

The optimism over the imminent order win also helped offset the hit from the cancellation of a Rs 180 crore project from the Bangladesh government. Bangladesh’s Ministry of Defence cancelled the order which involved construction of an advanced ocean-going tug.

That said, Garden Reach already boasts a strong order book which stood at a staggering Rs 22,680 crore as of the end of FY25. Not just that, the defence company’s solid order books has been a primary contributor to the sharp stock upside seen in recent weeks.

Shares of Garden Reach Shipbuilders have been at the forefront of the rally seen in defence names, surging over 50% in the last one month. What’s more interesting is that while several other defence names witnessed profit booking in recent sessions, Garden Reach managed to buck the trend, holding onto its upward journey.

Meanwhile, the management also reiterated its positive outlook for the company in its post-earnings call, banked on its strong order visibility, which will replenish orderbook from FY29.

Looking ahead, analysts at Elara Capital expect Garden Reach Shipbuilders to post margin surprises over the next two years, supported by execution gains from capacity ramp-up and emerging opportunities in commercial shipbuilding.

Despite that, Elara Capital still downgraded Garden Reach to ‘sell’ from the previous ‘accumulate’ call, citing that growth is likely to peak by FY27. “The stock has already outperformed the Nifty by 90% over the past three months, while future earnings are expected to grow at a modest earnings-per-stock CAGR of 2% during FY25–28, with an average Return on Equity (RoE) of 26% between FY26–28,” Elara wrote in a note.

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