Garden Reach Shipbuilders & Engineers (GRSE) was listed on the NSE and BSE on October 10, 2018. In the last five years, the company has given a massive return of around 750% to its investors. Will GRSE continue to provide such great returns in the future as well? Let’s explore GRSE future growth potential and GRSE share price target from 2025 to 2050 in this article.
About GRSE
Garden Reach Shipbuilders & Engineers Ltd. (GRSE) is an Indian shipbuilding company founded in 1884. Its headquarters is in Kolkata, and it is a major shipyard in the country. GRSE is well-known for building warships for the Indian Navy and Coast Guard and other commercial and export purposes. It became a government-owned company in 1960 and has since played an important role in strengthening India’s naval defence.
GRSE Business Model
- Shipbuilding Contracts: GRSE builds warships, patrol vessels, and other ships for the Indian Navy, Coast Guard, and other clients.
- Ship Repairs & Maintenance: The company provides repair and maintenance services for ships.
- Engineering Products: GRSE manufactures portable bridges, deck machinery, and other engineering products for defence and civil use.
- Commercial Shipbuilding: Apart from defence projects, GRSE also builds ships for private and commercial use.
GRSE Fundamental Analysis
| Stock Name | GRSE Ltd. |
|---|---|
| Market Cap | ₹ 16,342 Cr. |
| 52W High | ₹ 2835 |
| 52W Low | ₹ 673 |
| Stock P/E | 41.3 |
| Book Value | ₹ 161 |
| Dividend Yield | 0.65 % |
| ROCE | 27.4% |
| ROE | 22.2 % |
| Face Value | ₹ 10.0 |
| Shareholders | Mar 2023 | Mar 2024 | Dec 2024 |
|---|---|---|---|
| Promoters | 74.50% | 74.50% | 74.50% |
| FIIs | 2.68% | 3.26% | 3.71% |
| DIIs | 7.91% | 6.14% | 1.87% |
| Public | 14.91% | 16.10% | 19.92% |
| No. of Shareholders | 60,638 | 1,25,631 | 4,21,148 |
Key Factors Driving GRSE Future Growth
- Strong Order Book & Government Support: GRSE has many pending orders from the Indian Navy and Coast Guard. Also, the Indian government’s “Make in India” initiative and focus on defence manufacturing further support GRSE’s growth.
- Modern Shipbuilding & Skilled Workforce: GRSE has upgraded its shipyards with advanced technology, allowing faster and more efficient ship production.
- Export & Diversification Strategy: GRSE is expanding its reach by exporting warships to friendly foreign nations. It is also building other things like ferries and survey ships, reducing dependency on just defence contracts.
- Strong Financials & Growing Defence Budget: GRSE has a healthy balance sheet with good profit margins, giving it the financial strength to invest in future projects. Additionally, India’s increasing defence spending leads to more opportunities for GRSE.
- Rising Demand for Warships: As global tensions rise, India and other nations are strengthening their navies, increasing demand for GRSE’s ships.
Pros of Investing in GRSE
- Strong Revenue Growth: In the financial year ending March 31, 2024, GRSE’s revenue from operations increased to ₹3,592.64 crore from ₹2,561.15 crore in the previous year, reflecting 40.27% year-on-year (YoY) growth.
- Profit Increase: GRSE has delivered good profit growth of 25% CAGR over the last 5 years.
- High Return on Capital Employed (ROCE): GRSE achieved an ROCE of 27.4%, which means the company is effectively using its capital to generate profits.
- Debt-Free: GRSE is almost debt-free, with a debt-to-equity ratio of 0.005 as of March 31, 2024, which minimises its financial risk.
- Consistent Dividend Payout: GRSE has maintained a healthy dividend payout ratio of 32.1%.
- Increase in FIIs Holding: FIIs increased their holding from 3.65% in September 2024 to 3.71% in December 2024.
Cons of Investing in GRSE
- Dependence on the Defence Sector: Most of GRSE’s money comes from the defence sector. If the government reduces spending on defence, it could affect GRSE’s business and profits.
- Risk of Overvaluation: Some experts believe GRSE’s stock is overpriced with a PE ratio of 41 and PB ratio of 8.79.
- Decrease in DIIs Holding: DIIs decreased their holding from 6.14% in March 2024 to 1.87% in December 2024.
| Years | Target 1 | Target 2 | Target 3 |
|---|---|---|---|
| GRSE Share Price Target 2025 | ₹ 2000 | ₹ 2350 | ₹ 2800 |
| GRSE Share Price Target 2026 | ₹ 2400 | ₹ 2940 | ₹ 3450 |
| GRSE Share Price Target 2027 | ₹ 2880 | ₹ 3700 | ₹ 4730 |
| GRSE Share Price Target 2028 | ₹ 3450 | ₹ 4600 | ₹ 6150 |
| GRSE Share Price Target 2029 | ₹ 4150 | ₹ 5700 | ₹ 8000 |
| GRSE Share Price Target 2030 | ₹ 5000 | ₹ 7200 | ₹ 10000 |
| GRSE Share Price Target 2035 | ₹ 10000 | ₹ 18000 | ₹ 30000 |
| GRSE Share Price Target 2040 | ₹ 20000 | ₹ 45000 | ₹ 75000 |
| GRSE Share Price Target 2050 | ₹ 80000 | ₹ 100000 | ₹ 150000 |
Conclusion
GRSE has delivered impressive returns over the years, backed by strong government support, a strong order book, and solid fundamentals. The company’s focus on modernising shipbuilding, expanding exports, and maintaining a debt-free status makes it a promising investment. However, since most of its revenue depends on defence contracts, any change in government spending could impact its growth. While the stock has strong potential, some experts believe it might be overvalued. Investors should carefully consider the risks and rewards before investing. For the latest updates, check GRSE official website.
Disclaimer
This article is for educational purposes only. It is not a stock recommendation and should not be treated as such. Please ask your financial advisor before making any investment decision.
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