GRSE pacts with Medha Servo Drives; stock hits 5% upper circuit limit

Garden Reach Shipbuilders & Engineers (GRSE) Ltd on Tuesday announced it entered into a non-binding MoU (memorandum of understanding) with Hyderabad-based Medha Servo Drives Pvt Ltd for the joint manufacture of advanced electrical/electronic equipment and systems.

"Such equipment and systems, to be used both on naval and commercial platforms, will be manufactured under the joint brand name of Medha Servo Drives and GRSE," it added. Although, the financial impact of the aforesaid MoU has not yet been ascertained, the Kolkata-based defence PSU mentioned.

"The MoU aims to synergise the vast experience and expertise of GRSE in shipbuilding and the integration of sophisticated systems on board vessels, and the extensive technological know-how of Medha Servo Drives in the field of electrical and electronic equipment. The items covered under the MoU include control and monitoring systems, electrical propulsion systems for marine applications and PGD components," it further stated.

The announcement came post-market hours today. Earlier in the day, GRSE shares jumped 5 per cent to settle at their upper price band of Rs 2,438.10. At this price, the multibagger stock has gained 178.91 per cent on a year-to-date (YTD) basis.

The counter traded higher than the 5-day, 10-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs) but lower than the 20-day SMA. The counter's 14-day relative strength index (RSI) came at 57.48. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 74.45 against a price-to-book (P/B) value of 15.89. Earnings per share (EPS) stood at 31.19 with a return on equity of (RoE) 21.35.

Around 51,000 shares changed hands today on BSE. The figure was lower than the two-week average volume of 1.82 lakh shares. Turnover on the counter came at Rs 12.17 crore, commanding a market capitalisation (m-cap) of Rs 27,928.92 crore.

The company is a premier warship-building company, under the administrative control of the Ministry of Defence. GRSE said it has already delivered a record 109 warships to India's maritime defence.

As of June 2024, the government held a 74.50 per cent stake in the state-owned firm.