The shares of Garden Reach Shipbuilders & Engineers Ltd. (GRSE) experienced a remarkable surge on March 20, 2025, jumping over 6% following the company's announcement of a Memorandum of Understanding (MoU) with the Public Works Department (PWD) of Nagaland. This uptick signals a significant moment for the defense sector firm, which has been on a growth trajectory for several days.
Trading at ₹1,734.95 at the start of the day, GRSE climbed to an intraday high of ₹1,782.50 before closing at ₹1,718, marking a substantial rise from its previous close of ₹1,641.15. This latest increase builds on the stock’s impressive performance in the past week, where it has gained over 30.6% in five trading sessions and a striking 127% year-to-date. Notably, GRSE’s market capitalization currently stands at approximately ₹19,680 crore.
The MoU, signed on March 19, 2025, by DIG Subrato Ghosh of GRSE and Shri Swarai Meru, Chief Engineer of the PWD Nagaland, represents GRSE's first significant project with a Northeastern state in India. According to GRSE, "This landmark MoU marks the first ever MoU between GRSE and a Northeastern State, aligning with the Government of India’s Make in India initiative for accelerated regional development." The agreement includes the supply of eight sets of Double Lane Modular Steel Bridges, which is expected to enhance infrastructure in the region.
GRSE holds a strong position in the Indian shipbuilding industry, primarily focused on meeting the needs of the Indian Navy and Coast Guard. Their recent success is reflected not only in stock performance but also in financials. For the third quarter of FY 2024-2025, GRSE reported a revenue of ₹1,271.01 crore, a 37.69% increase year-on-year. Their net profit after tax (PAT) during the same period was ₹98 crore, marking an 11% increase compared to the previous fiscal year. Furthermore, the company has declared an interim dividend of ₹8.95 per share for the fiscal year 2024-2025.
Recent analysis shows that GRSE's share price has demonstrated exceptional growth over the long term. Over the span of two years, the firm’s stock has delivered returns of over 310%, and it registered a staggering increase of 128% in just one year. Additionally, the company has supplied over 5,800 modular bridges to various agencies, demonstrating a commitment to enhancing infrastructure across India and fostering the Government’s vision for the nation.
Despite this year's market volatility, analysts perceive GRSE's recent stock performance positively. Mandar Bhojane, an equity research analyst at Choice Broking, commented on the stock's breakout pattern, suggesting that GRSE presents a promising buying opportunity. Bhojane highlighted that resistance levels are observed in the ₹1,800 to ₹2,000 range, while immediate support lies at ₹1,640. Another analyst, Jigar S Patel from Anand Rathi, echoed this sentiment, pointing out that should the stock decisively move above ₹1,748, it may trigger further upside potential.
Moreover, market analysts have posited that, while the stock remains in an upward trend, it is essential for investors to maintain proper risk management strategies. The relative strength index (RSI) of GRSE currently stands at 69.5, indicating healthy trading for GRSE without reaching overbought or oversold extremes.
Indicating strong investor confidence, GRSE's stock was not only boosted by the new project with Nagaland but also energized by recent delivery successes, including two warships, Himgiri and Androth, to the Indian Navy, solidifying their reputation in the naval shipbuilding sector.
As GRSE continues to fulfill critical defense contracts and expand their operations in the modular bridge segment, the stock remains a focal point for potential investors looking for growth opportunities in India's defense sector. The company’s positive trajectory, driven by its commitment to innovation and regional development, positions it well for sustained success.
