Garden Reach Shipbuilders & Engineers (GRSE) recently announced a major contract to construct and deliver four additional multi-purpose vessels for $54 million. This order, placed by German company Carsten Rehder Schiffsmakler and Reederei, caused GRSE shares to rise by over 3%, reflecting investor confidence in the company’s growth trajectory.
This latest project is part of an ongoing contract, bringing the total number of vessels under the agreement to eight. GRSE will design and construct the vessels, each with a 7,500 deadweight ton (DWT) capacity, and aims to complete the order within 33 months.
Performance boost for GRSE
The announcement has provided a positive push to GRSE’s stock price, which has surged over 110% in the past year. Since the start of 2024, the stock has risen by 103%, offering attractive opportunities for those looking to buy shares online in the shipbuilding sector.
The company’s strong financial performance, marked by a 13% year-on-year (YoY) rise in net profit to ₹87 crore for the quarter ending June 30, 2024, demonstrates its operational prowess. Revenue from operations for the same period grew 34% YoY to ₹756 crore, while earnings before interest, taxes, depreciation, and amortisation (EBITDA) climbed 11% YoY to ₹130 crore.
Long-term growth potential
In addition to securing new vessel contracts, the Government of India has upgraded Garden Reach Shipbuilders to a Schedule A central public sector enterprise (CPSE). This upgrade is attributed to the company’s financial stability, operational strength, and contribution to national security.
The new CPSE status will enhance management capacity and improve operational efficiency, further strengthening the company’s market position. For those planning to buy shares online, GRSE’s long-term growth potential is noteworthy, backed by its solid financials and strategic government partnerships.
Strategic developments
GRSE is also diversifying its operations. In August 2024, the company signed a memorandum of understanding (MoU) with the National Highway Infrastructure Development Corporation (NHIDCL) for the fabrication and supply of modular steel bridges, expanding its presence beyond shipbuilding. This diversification may further bolster the company's revenue streams, adding to its appeal for investors looking to buy shares online.
Invest safely
The $54 million order for additional vessels is a significant milestone for Garden Reach Shipbuilders & Engineers, reflecting the company’s growth and commitment to expanding its capabilities. With rising stock prices, robust financial performance, and a new Schedule A CPSE status, GRSE offers a compelling case for those interested in buying shares online.
Its diversified business operations and continued focus on national security and infrastructure projects add further value to its portfolio, making it a promising investment opportunity in the shipbuilding and engineering sectors.
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