GRSE shares rise 51% in May, should you buy on dips? 

Shares of defence firm Garden Reach Shipbuilders and Engineers (GRSE) rose 51% in May considering today's record high  buoyed by a rally in defence stocks on prospects of increased government expenditure in the sector amid the recent war like situation between India and Pakistan. 

The stock closed at Rs 1916.50 on  April 30 and hit a record high of Rs  2898.40 in the current session. 

The recent leg of rally in the defence stock came after the firm on Thursday said it has emerged as the lowest bidder for over Rs 25,000 crore worth of contract to build eight next generation Corvettes for the Indian Navy. 

The multibagger stock closed 1.06% higher at Rs 2782 in the current session.  Market cap of the firm stood at Rs 31,868 crore on Friday. On BSE, around 8.90 lakh shares changed hands amounting to a turnover of Rs 250.93 crore. The stock gained 5.28% intra day on BSE today. 

The stock is strongly overbought on charts with its RSI exceeding 70 mark. The RSI stands at 80.9.  

The multibagger defence stock has gained 95% in a year and rallied 797% in three years.

Amol Athawale, VP-technical Research, Kotak Securities expects rangebound movement in the near term.

"The stock has successfully cleared the short-term resistance of 2100, and post-breakout, it intensified the positive momentum. Technically, on daily charts, the stock is forming a series of higher highs and higher lows, and on monthly charts, it has formed a long bullish candle, which supports further uptrend from the current levels," said Athawale.  

"We believe that the medium-term outlook for the stock remains positive, but due to temporary overbought conditions, we may see range bound activity at higher levels. For short-term traders, buying on corrections and selling on rallies would be the ideal strategy. In the near future, 2630 and 2500 are key support zones, while 3000 and 3100 could act as crucial resistance levels for the bulls. However, below 2500, the uptrend would become vulnerable. If the price drops below this level, traders may prefer to exit their long positions," added Athawale. 

Hardik Matalia,Derivative Analyst at Choice Broking said, "After undergoing a prolonged consolidation, it staged a strong reversal and is now forming a classic pattern of higher highs and higher lows on the daily chart—indicating a well-established uptrend. On the technical front, GRSE has rebounded well from its key moving averages and is currently trading above its short-term, medium-term, and long-term EMAs—a strong sign of underlying positive momentum.

While the structure remains bullish, short-term traders are advised to wait for a healthy retracement or consolidation before considering fresh long positions to avoid getting caught in potential near-term volatility.

For investors, this sharp rally near record highs offers a good opportunity to partially book profits. They can look to re-enter or accumulate more on meaningful dips, provided the price action is supported by technical confirmation.

Importantly, as long as the stock manages to hold above the Rs 2,000 mark, it can be considered a ‘buy-on-dips’ candidate, indicating strong underlying support at lower levels. While the long-term trend remains intact, some cooling off in the near term cannot be ruled out due to the elevated RSI and proximity to all-time highs."

In the fourth quarter of the last fiscal year, the company saw an impressive net profit increase of 118.9% year-on-year, reaching Rs 244.2 crore for the quarter ending March 31, 2025. This compares favorably to the net profit of Rs 111.6 crore reported during the same period last year.

Revenue from operations also surged, climbing 61.7% year-on-year to Rs 1,642 crore, up from Rs 1,015.7 crore in the March 2024 quarter. Additionally, EBITDA soared by 141.8%, totaling Rs 219 crore in Q4, compared to Rs 90.6 crore a year earlier.

Earnings per share (EPS) for Q4FY25 stood at Rs 21.32, a significant increase from Rs 9.74 in Q4FY24.

The board has recommended a final dividend of Rs 4.90 per equity share for FY25, pending shareholder approval.

Garden Reach Shipbuilders & Engineers is mainly engaged in the construction of warships.