Introduction:
Garden Reach Shipbuilders & Engineers Ltd. (GRSE) saw a big jump in its stock price on Friday, August 30, 2024. The price went up by 7% and reached a high of ₹1,876 per share during the day on the Bombay Stock Exchange (BSE). By 11:48 AM, the stock was at ₹1,869.3, showing a gain of 6.52% or ₹114.4. The company’s total value in the market is now ₹21,204.72 crore.
Development:

The sharp rise in GRSE’s share price follows the company’s announcement of a Memorandum of Understanding (MoU) with the National Highway Infrastructure Development Corporation Ltd. (NHIDCL). Under this agreement, GRSE will be responsible for the fabrication, supply, and launching of Double-Lane Class 70 Modular steel and Bailey bridges.
This initiative aims to bolster infrastructure by enhancing connectivity in strategic areas along India’s borders, thus facilitating improved troop and equipment movement.
Recent Contracts and Collaborations:
Border Roads Organisation (BRO): GRSE previously secured an MoU with BRO for similar bridge projects, delivering 44 bridges across India.
Medha Servo Drives Pvt Ltd: In July, GRSE entered into a partnership with Medha Servo Drives for the joint production of advanced electrical and electronic systems.

- National Centre for Polar & Ocean Research (NCPOR): A contract was signed for the construction of an Ocean Research Vessel, showcasing GRSE’s diverse project portfolio.
Garden Reach Shipbuilders’ Stock Jumps 7% Following Major MoU with NHIDCL:
Order Book and Financial Outlook:

As of March 31, 2024, GRSE’s order book stood at ₹22,652 crore. Despite the positive market reaction, ICICI Securities has issued a ‘Sell’ recommendation on GRSE stock, setting a target price of ₹515 per share. The brokerage cites concerns over future order volumes and margin pressures due to competitive bidding.
ICICI Securities’ report indicates an anticipated steady margin of 6-7% and a P/E ratio of 10x based on FY26 earnings per share (EPS).
Performance Overview:
Over the past year, GRSE shares have delivered an impressive return of 121%, significantly outpacing the Sensex, which has risen by 26.2% during the same period.

Conclusion:

The recent MoU with NHIDCL marks another milestone for Garden Reach Shipbuilders & Engineers, reflecting its growing role in enhancing India’s infrastructure capabilities. However, investors should remain mindful of the concerns raised by analysts regarding future earnings and competitive pressures.
Frequently Asked Questions FAQ:
1. What is the recent development with Garden Reach Shipbuilders & Engineers?
- Answer: Garden Reach Shipbuilders & Engineers (GRSE) recently signed a Memorandum of Understanding (MoU) with the National Highway Infrastructure Development Corporation Ltd. (NHIDCL) for the fabrication, supply, and launching of Double-Lane Class 70 Modular steel and Bailey bridges. This agreement aims to enhance connectivity in strategic areas along India’s borders.
2. How did the news of the MoU affect GRSE’s share price?
- Answer: Following the announcement of the MoU, GRSE’s share price surged by up to 7% on August 30, 2024, reaching an intraday high of ₹1,876 per share on the Bombay Stock Exchange (BSE).
3. What are the details of the MoU with NHIDCL?
- Answer: The MoU involves GRSE fabricating, supplying, and launching Double-Lane Class 70 Modular steel and Bailey bridges. This initiative is expected to improve infrastructure and connectivity in critical forward areas along India’s borders, facilitating better troop and equipment movement.
4. What other recent contracts has GRSE secured?
- Answer: Apart from the NHIDCL MoU, GRSE has:
- Signed an MoU with the Border Roads Organisation (BRO) for the supply of 44 bridges across India.
- Partnered with Medha Servo Drives Pvt Ltd to jointly manufacture advanced electrical and electronic systems.
- Contracted with the National Centre for Polar & Ocean Research (NCPOR) for the construction and delivery of an Ocean Research Vessel.
5. What is GRSE’s current order book status?
- Answer: As of March 31, 2024, GRSE’s order book stands at ₹22,652 crore.
6. Are there any concerns regarding GRSE’s stock performance?
- Answer: Yes, ICICI Securities has a ‘Sell’ recommendation on GRSE’s stock with a target price of ₹515 per share. The brokerage cites potential uncertainties around future orders and margin pressures due to competitive bidding. They also project a steady margin of 6-7% and a P/E ratio of 10x based on FY26 earnings per share (EPS).
7. How has GRSE’s stock performed over the past year?
- Answer: Over the past year, GRSE’s shares have delivered a return of 121%, significantly outperforming the Sensex, which has risen by 26.2% during the same period.
8. What should investors consider before investing in GRSE?
- Answer: Investors should consider GRSE’s recent performance, its large order book, and its new contracts. However, they should also weigh the concerns raised by analysts about future earnings, competitive pressures, and margin stability before making investment decisions.
9. Where can I find more information about GRSE’s financial performance and updates?
- Answer: For detailed information about GRSE’s financial performance and updates, investors can review the company’s official website, financial reports, and stock exchange filings. Additionally, financial news platforms and brokerage reports can provide analysis and insights.
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