At a Glance

Garden Reach Shipbuilders & Engineers (GRSE) has quietly turned into one of India’s most explosive PSU performers. With a 1,300% return in 3 years, zero debt, exploding order books, and war-driven tailwinds — it looks like the Navy found its multibagger before the market did.

🔍 1. TL;DR – The Shipyard That Flew Like a Fighter Jet

• 💥 Stock Price: ₹230 (2021) → ₹3,174 (2025) – Up 1,280%
• 📈 5-Year Revenue CAGR: 29%
• 💸 5-Year PAT CAGR: 26%
• 🛳️ Order Book: Exploding thanks to Coast Guard + Navy deals
• 🧾 Debt: What debt? GRSE is proudly debt-free
• 🧠 Key Managerial People: CMD P.R. Hari, CFO Ramesh K. Dash
• 📦 Product Focus: Frigates, Corvettes, Research Vessels, Patrol Boats
• 💣 MoD Contracts: The bloodline. And it’s been raining contracts.

🧱 2. Business Model – PSU, But Make It Profitable

• GRSE isn’t your typical sleepy PSU.
• Think of it as the official warship factory for the Indian Navy and Coast Guard.
• Specialises in:
  • Frigates
  • Missile Corvettes
  • Offshore Patrol Vessels
  • Research & Survey Vessels
• 🧰 Add to that: engine repairs, small boats, dredgers, pontoons – GRSE does it all.
• All this from 3 shipyards in Kolkata – Main Works, Rajabagan Dock, and Fitting Out Jetty.

🧾 Revenue Split (FY25):

• 🛳️ Shipbuilding: 89%
• ⚙️ Engineering, Design, Misc: 11%

📊 3. Financials – Look Ma, No Debt, Only Dividends

📦 Other Income (FY25): ₹335 Cr
🤔 So yes, ~40% of FY25 PAT is still from ‘Other Income’. PSU vibes remain intact.

📈 4. What Changed? The Defence Boom + Execution

• 🪖 India’s defence capex exploded post-2020 (thanks, China + Pakistan).
• GRSE, being a mini-Ratna with MoD backing, got fat orders.
• Major wins since 2023:
  • ✅ Survey Vessel Contracts (2023)
  • ✅ Coastal Research Vessel for GSI (2025)
  • ✅ MoU with Sweden’s Berg Propulsion for cruise ship tech
  • ✅ Orders for ASW corvettes and engine supply pacts
• 🛠️ Plus, internal execution improved. ROCE hit 37% in FY25, up from 20% in FY22.

🤝 MoUs are flying faster than ships are getting built. But hey, investor sentiment ka booster dose toh yahi hai.

🚨 5. Risks – High Valuations, Order Fatigue?

• 📈 P/E (TTM): 68.9 – Even Zomato feels poor.
• 📚 P/B: 19.7 – PSU hai, Tech valuation pe trade ho raha hai
• 💰 ~₹527 Cr PAT, ₹36,000 Cr market cap – a 68x multiple on earnings built mostly on govt orders

Potential Red Flags:

• 🧾 Revenue still heavily reliant on Govt. (95%+)
• 🤖 No diversification into commercial shipbuilding (yet)
• 😵‍💫 Other income still props up bottomline
• 🕳️ Delays or budget cuts in MoD can derail sentiment

💸 6. Fair Value Estimate – Built with Bolts, Not Hype

Let’s break this down:

Base Case FY26 Estimate

• EPS (consensus): ₹72
• Target P/E (reasonable for PSU defence): 35–40x
• 🧮 FV Range = ₹2,520 to ₹2,880

Bull Case (FY27)

• EPS: ₹100
• If defence frenzy continues → P/E could stay 40–45
• 🧮 FV Range = ₹4,000 to ₹4,500

🎯 EduInvesting FV Range (12–18M): ₹2,500–₹4,500

Currently at ₹3,174 – slap in the middle. Not cheap. Not insane. But don’t expect compounding if the war drums stop.

🧠 7. Final Word – Multibagger? Yes. Overbought? Also Yes.

✅ GRSE has executed brilliantly
✅ Orders are rolling in
✅ Debt is zero, cash is fat, payouts are solid
🚨 But…

• Valuations are pricing in 2 wars and a submarine launch every week
• Any slowdown in order book → stock deflates faster than a sinking dinghy

🧨 Verdict: Great PSU story, superb past ride, but don’t board this ship thinking it’s unsinkable. Even Titanic had a better valuation.

✍️ Written by Prashant | 📅 June 18, 2025

Tags: GRSE, PSU Stocks, Defence Stocks, Shipbuilding, Multibagger PSU, Ministry of Defence, Defence Capex India, IPO to 10x, Garden Reach, War Stocks India