Defence Stock Zooms 727% In 5 Years: Prabhudas Lilladher Suggests Buy On GRSE For TP Of Rs 907

Garden Reach Shipbuilders & Engineers aka GRSE logged a massive buying trend on Thursday after the company took a strategic step towards achieving India's goal of becoming the 'Global Hub for Green Shipbuilding' by 2030. Brokerage Prabhudas Lilladher is the latest to recommend buying GRSE shares for a target price of Rs 907 apiece. The brokerage has added the stock in its medium-term tech pick.

On BSE, GRSE shares zoomed by nearly 5% to hit an intraday high of Rs 845 apiece on Thursday. The market cap is over Rs 9,500 crore.

Year-to-date, GRSE shares have gained by nearly 73% on BSE, while in a year, the upside is nearly 60%. However, GRSE has made extraordinary gains of nearly 727% in 5 years, making it a multibagger.

Also, GRSE is among dividend-paying stocks. In FY23, the company paid a total of 62% dividends amounting to Rs 6.2 per share. Currently, it has a dividend yield of 0.75%.

On the share price, Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has witnessed a decent consolidation phase near the important 50EMA level of 765-770 zone and currently with a positive candle formation has come out of the rectangular box to improve the bias and anticipate for further rise in the coming days."

She added, "The RSI has indicated a trend reversal from the oversold zone and currently is well placed indicating strength to carry on with the momentum still further ahead from current levels. With the chart looking good, we suggest buying and accumulate the stock for an upside target of 907 keeping the stop loss of 770."

GRSE announced that it signed a Memorandum of Understanding (MoU) with Shift Clean Energy (Shift), Seatech Solutions International (Seatech) and the American Bureau of Shipping (ABS) on Wednesday, November 22, 2023, to develop Electric Tugs E-VOLT 50. The EVOLT 50 aims to reduce carbon emissions, improve operational efficiency, and set new benchmarks for performance and environmental sustainability in the tugboat industry.

GRSE which has established itself as a leading defence shipyard in the country, will build the platform based on the design by Seatech with Shift providing the energy storage and ABS will ensure that the construction and design adhere to all applicable regulatory standards,
certifying safety, reliability, and compliance.

Notably, GRSE has already made progress towards the building of green vessels. At the moment, the shipyard is building a zero-emission electric ferry for the Government of West Bengal that will have a capacity of 150 passengers. Once commissioned, this ferry promises to redefine passenger services along the Hooghly and other major rivers.

GRSE's roots are over 100 years old. The journey of Garden Reach Shipbuilders & Engineers Ltd., a premier Warship building Company in India, under the administrative control of the Ministry of Defence, a PCMM Level-2 Certified Company, dates back to 1884 when it started its journey as a small workshop to repair vessels of River Steam Navigation Company. The Company was taken over by the Government of India in 1960.

GRSE's main business is building and repairing commercial and naval vessels. Mostly, the company is into shipbuilding activities for the Indian Navy and the Indian Coast Guard.