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Garden Reach shares up 4% on ₹491 crore LoI from Ministry of Defence

Stocks
2 min Read Oct 21, 2024
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The share market investment landscape is buzzing today as Garden Reach Shipbuilders & Engineers has reported a significant uptick in its stock price. On October 21, the company's shares rose over 4%, driven by the announcement of a Letter of Intent (LoI) from the Ministry of Defence for a major contract worth approximately ₹491 crore.

Positive market reaction

At around 09:35 am, Garden Reach Shipbuilders & Engineers saw its share price quoted at ₹1,842.00, marking an increase of ₹76.85, or 4.35%, on the Bombay Stock Exchange (BSE). This sharp rise in share prices reflects the market's optimism surrounding the contract. 

It involves the comprehensive design, development, construction, integration of equipment, testing, certification, and commissioning of an Acoustic Research Ship (ARS). The timeline for this project is set at 36 months, demonstrating the company's ability to secure substantial government contracts.

A series of strategic wins

This latest contract follows a series of successful ventures for Garden Reach Shipbuilders & Engineers. Earlier this month, the company received two Letters of Acceptance for a contract related to the design, construction, operation, and maintenance of Hybrid Electric Ferries under the WBIWTLSD Project. The Transport Department of the Government of West Bengal initiates this project. 

This contract involves the creation of 13 units, including 100-passenger Non-AC Hybrid Electric Ferries and 200-passenger Twin Deck Hybrid Electric Ferries with air conditioning on the main deck. Valued at ₹226.18 crore, this project is expected to be completed within 30 months, showcasing the company's growth in the eco-friendly transportation sector.

In addition to these contracts, Garden Reach also secured a USD 54-million order last month from the Germany-based Carsten Rehder Schiffsmakler and Reederei GmbH & Co. for the construction and delivery of four additional multi-purpose vessels. This diverse portfolio of projects positions the company well within the share market investment arena.

Key takeaways

  • Share price surge: Garden Reach's shares rose over 4% following a major contract announcement from the Ministry of Defence.

  • Significant contracts: The LoI is valued at ₹491 crore, involving the design and construction of an Acoustic Research Ship over 36 months.

  • Diverse projects: The company is also expanding its portfolio with contracts for Hybrid Electric Ferries and multi-purpose vessels, enhancing its prospects in the share market investment landscape.

This trend indicates a positive outlook for investors considering Garden Reach Shipbuilders & Engineers as a viable option for share market investment, reflecting confidence in the company's ability to execute large-scale government contracts successfully.