GRSE Rs 2450
Shipbuilding in India is riding two tailwinds at present. First is the defence indigenization/Make in India initiative by the government. Second is the reported full capacity of international shipyards through 2028 which is pushing more orders to Indian shipbuilders.
So here’s the story on Garden Reach Shipbuilders (GRSE) – one of the major PSU shipbuilders in India.
Right now, it’s in somewhat of a sweet spot. The company just delivered its first P-17 Alpha frigate ahead of schedule — and even beat a peer that got the same order on the same day. That’s a huge confidence booster because, in shipbuilding, execution is everything. Remember: not only are defence contracts time sensitive but revenue shows up in line with execution only. Delay a project, and not only do you miss revenue, you also risk penalties. So, delivering early? Big deal.
On the numbers side, GRSE has done really well over the last three years. From FY22 to FY25, revenue, EBITDA, and profit all grew at over 40% a year. FY25 revenue was about ₹5,000 crore with PAT of over 500 crore and as of June ’25, the order book stands at ₹21,700 crore — that’s about 4x its annual revenue. In other words, it has visibility for the next 3–4 years.
Margins, too, have improved. For years, GRSE lagged peers like MDL and Cochin, running at 6% margins because unlike peers who mainly got orders through nomination, GRSE won orders through competitive bidding. But in Q4 FY25, margins jumped to ~13%, and management says this isn’t a fluke. They expect it to sustain.
The near-term growth story looks locked in. FY26 and FY27 numbers should be strong because GRSE will be delivering a big chunk of that ₹11,400-crore P-17 Alpha order plus other ships in the pipeline.
The excitement is about what comes next. GRSE is already L1 (lowest bidder) for a ₹25,000 crore next-gen corvette order, which management expects to be awarded by FY26 end. If that happens, revenue from it will start flowing FY28 onwards. They’re also bidding for the ₹70,000 crore P-17 Bravo project, with orders likely split between two shipyards. Getting even part of that would be game-changing.
Capacity-wise, they’re scaling up too: from 20 ships in 2022 to 28 now, with plans for 32 by FY26 and 40 by 2029. So they’re building muscle for the future.
Now, let’s talk valuation. At current levels, the stock trades at roughly the same PE as peers, but with higher return ratios — which is a plus. If you pencil in FY27 earnings (it could do ~₹75 EPS if it delivers on time), and slap on a 40× multiple, you land at a stock price of about ₹3,000. That’s roughly 10% CAGR from here — decent, but not fireworks. The real upside kicks in only if GRSE lands and executes those big new orders on time.
So, what’s the takeaway?
If you want outsized returns, you’re essentially betting on two things: timely order awards (the ₹25,000 cr corvettes and ₹70,000 cr frigates) and continued flawless execution.
It’s not for the faint-hearted — but for investors with a bigger risk appetite, it could be a rewarding ride.