Garden Reach Shipbuilders & Engineers share price gained over 2% in early trade on Thursday after the defence PSU reported its earnings for the second quarter of FY27. The defence stock rose as much as 2.07% to Rs 2,273.10 apiece on the BSE.
The state-run Garden Reach Shipbuilders & Engineers (GRSE) posted a net profit of Rs 171.97 crore in the September quarter, registering a growth of 12% from Rs 153.79 crore in the year-ago period.
The defence company's revenue from operations in Q2FY27 rose nearly 9% YoY to Rs 1,827 crore from Rs 1,677 crore, year-on-year (YoY).
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As of June 2026, the company's order book stood at Rs 13,596 crore. Further strengthening its execution pipeline, the company signed a Rs 32,000 crore contract for five Next-Generation Corvettes in November 2026. Including this contract, the pro-forma order book increases to ~Rs 45,600 crore.
According to Elara Securities, Garden Reach Shipbuilders & Engineers reported subdued growth on the sales front, likely due to slower execution. However, margins surprised positively, likely led by execution mix.
The brokerage firm expect growth momentum to peak in FY27, due to the bell curve execution cycle. Thereafter, a mix of smaller ship orders and spares may sustain sales until NGC execution commences.
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Goldman Sachs maintained a ‘Sell' rating on GRSE shares but raise the target price to Rs 1,735 from Rs 1,640 earlier.
The global brokerage firm noted that the Rs 320 billion Next-Generation Corvette order strengthens backlog, but execution stretches over nine years and four months. It expects the company to face revenue and margin pressures after FY28 as major ship deliveries taper off.
Goldman Sachs hiked FY27–28 EPS estimates by 4–6% but trimmed FY29 EPS by 0.8% amid slower execution.
Elara Securities revised its rating to ‘Reduce' from ‘Sell' due to receipt of NGC order with an unchanged target price of Rs 2,230. It expects growth momentum to peak in FY27 with FY28 likely to see flat sales as the current orderbook would be exhausted and new orderbook execution would commence along with smaller orders.
It expects an EPS CAGR of 17% in FY26-29E with an average ROE of 30% in FY27E-29E.
Choice Institutional Equities noted GRSE's order book provides strong medium-term revenue visibility.
The brokerage firm remains positive on GRSE, supported by its strong order book, expanding programme pipeline and improving execution opportunities. It estimates Revenue, EBITDA and PAT CAGR of 19.2%, 20.5% and 18.8% over FY26–FY29E, with operating margin expected to remain broadly stable.
Choice Equities maintained its ‘Buy' rating, with target price of Rs 3,500, valuing the company at 35x average FY28E–FY29E EPS.
At 10:05 AM, GRSE share price was trading 0.58% higher at Rs 2,239.65 apiece on the BSE.
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