Garden Reach Shares Soar On Norway's Polar Research Vessel Order, Up 100% YTD — Should You Buy, Sell Or Hold?

Shares of multibagger shipyard Garden Reach Shipbuilders and Engineers Ltd. rose as much as 10% in Wednesday's early trade, hitting a fresh record high, boosted by an order win from Norway's Kongsberg to build India's first-ever polar research vessel.

The construction of the vessel will take place indigenously in India. The project will also take into account the requirement of the National Centre for Polar and Ocean Research, which will use it for research activities in the polar and southern oceans, according to a PIB release.

"Together, we are building not just a vessel but a legacy — a legacy of innovation, exploration, and international cooperation that will inspire generations to come," said Minister of Ports, Shipping & Waterways Sarbananda Sonowal on the development. "The vessel will be equipped with the latest scientific equipment, enabling our researchers to explore the oceans' depths, study marine ecosystems, and unlock new insights into our planet’s past, present, and future."

Analysts see the defence space in a zone of momentum currently, with enormous amounts of money pouring in. "Given the kind of valuations in the medium to short term, the Garden Reach stock is fully priced in at this point in time," said Kranthi Bathini, director of equity strategy at WealthMills Securities.

However, the company's strong order book and earnings visibility definitely make it a stock worth buying on dips, he stated, adding that long-term investors may continue holding on to the counter. The company's order book currently stands at Rs 22,680 crore, the company's chairperson had recently mentioned in conversation with NDTV Profit.

"In the medium to short term, there is nothing wrong in taking some profit off the table," said Bathini.

Shares of the defence company have surged in the recent past, especially post the Pahalgam terror attack and Operation Sindoor shortly after, which has driven the stock up 96.38%. In the year-to-date period, returns stand at 106.35%, while the stock has risen 166.75% in the last 12 months.

The scrip rose as much as 10% to Rs 3,465 apiece, hitting a new life high. It pared gains to trade 8.09% higher at Rs 3,405.40 apiece, as of 11:05 a.m. This compares to a 0.18% advance in the NSE Nifty 50 Index. The Nifty India Defence index trades, in comparison, at a 0.74% advance.

Out of the five analysts tracking the company, three maintain a 'buy' rating, and two suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies a downside of 26.4%.