Nomura On Great Eastern Shipping: Nomura has initiated coverage on Great Eastern Shipping Company with a ‘Buy' rating and a target price of Rs 1,965 per share, on the back of the company's strong cash position, disciplined capital allocation and ability to compound net asset value through shipping cycles.
Nomura analyst Bineet Banka described GE Shipping as a “consistent compounder in a deep cyclical business”, while highlighting that the stock trades at a discount to its net asset value (NAV).
According to Nomura, GE Shipping had a cash pile of around Rs 8,000 crore as of Q1FY27, equivalent to roughly 30% of its NAV and about 38% of its market capitalisation.
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The brokerage believes this provides the company with major financial flexibility to fund its next phase of fleet expansion, including the potential to double its existing fleet when the shipping cycle turns negative.
Nomura also highlighted GE Shipping's capital-allocation track record across cycles. The company has historically bought vessels when asset values were depressed, sold assets during stronger markets, maintained low leverage and returned surplus cash to shareholders.
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The brokerage noted that GE Shipping's NAV clocked a roughly 27% CAGR between FY21 and FY26, supported by operating cash flow generation and higher asset values amid a strong global shipping cycle.
GE Shipping Q1FY27 Results
GE Shipping reported a 159.4% year-on-year (YoY) jump in consolidated net profit to Rs 1,308.84 crore in Q1FY27, while revenue from operations rose 66.9% to Rs 2,005.36 crore. EBITDA increased 108% to Rs 1,337.73 crore.
The shipping segment remained the key earnings driver, with segment profit rising to Rs 1,155 crore from Rs 379 crore a year earlier. The company also declared an interim dividend of Rs 14.40 per share.
GE Shipping Share Price History
GE Shipping shares ended 0.92% higher at Rs 1,497.05 on Friday. The stock has gained 11.8% over the past month, 34.5% year-to-date and 53.1% over one year, while its five-year gain stands at around 308%.
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