Target: ₹3,149
CMP: ₹2,500.10
GRSE (Garden Reach Shipbuilders & Engineers) is well-positioned for substantial growth, driven by a robust order book of ₹22,680 crore (as of March 31, 2025) comprising 40 platforms, including 16 warships. The company is actively executing key defence projects like the P17 Alpha frigates (first ship 95 per cent complete, ahead of schedule) and Anti-Submarine Shallow Watercrafts (first delivered, remaining expected by end of 2026). Non-defence projects, including multi-purpose vessels for a German client and hybrid ferries for West Bengal, diversify revenue streams.
Capacity enhancements from 24 to 30 ships by FY26 and strategic collaborations mitigate execution risk and support medium-term growth acceleration. These factors warrant a valuation multiple re-rating in line with long-cycle defence order execution and increasing shipbuilding throughput, the company is set for sustained growth and value creation, projecting a target of ₹3,149 based on a PE multiple of 36.6x and an EPS of ₹86.04 (FY27E).
Any delay, decline or reprioritisation of funding under the Defence Budget or that of customers, including the MoD, could adversely affect its ability to grow or maintain its financials. Shortage of raw materials could hinder its growth prospects.
Published on May 21, 2025
