Multibagger stock rises 22% since Q4 earnings; order book, growth prospects triggers for a rally 

Shares of Garden Reach Shipbuilders and Engineers (GRSE) have gained 22% in two sessions since the defence firm announced its Q4 and fiscal earnings. The stock, which closed at Rs 1,915 on May 13 hit a high of Rs 2337 in the current session, gaining 22% during the period. The earnings were announced after market hours on May 13. 

GRSE stock zoomed 6.71% to Rs 2337.70 on BSE. Market cap of the firm stood at Rs 26,552 crore. On BSE, around 6.25 lakh shares changed hands amounting to a turnover of Rs 140.83 crore.  

The multibagger stock climbed 135% in a year and rallied 355% in three years. It has already breached the Rs 2,138 price target fixed by Antique Broking assigned on May 14. 

Terming the Q4 earnings as exceptionally strong, the brokerage raised its estimates (EPS for FY26/ 27E by 12%/ 5%, respectively) at a core target P/E multiple of 43x FY27 earnings.

It said the firm has a strong order book with major projects on track to be executed in the next 3–4 years. 

"It comprises three P17A stealth frigates (all three are scheduled for delivery in FY26E/ 27E), eight anti-submarine warfare shallow water crafts, a survey vessel large project, and next-generation offshore patrol vessels. In 1QFY26, the company has won an INR 4.9 bn order for the construction of two coastal research vessels," said Antique.

The company noted that with its strong order book, production maturity of the ongoing projects, and order visibility including in the commercial shipbuilding segment, it is confident of even better performance during the current fiscal.

Om Mehra, Technical Reseacrch Analyst, SAMCO Securities said, "GRSE has delivered a decisive breakout above the Rs 2,050 resistance zone, marked by a wide bullish candle and strong volume, signaling a structural shift in trend. This move follows a prolonged consolidation phase, adding credibility to the breakout. Interestingly, the breakout has occurred near a previous gap zone from the earlier uptrend, with another unfilled gap left behind during the recent surge, now acting as key reference levels for further price action.

The stock is currently trading well above its key moving averages, with the RSI at 75 indicating strong momentum, albeit in the overbought territory. The MACD has confirmed a bullish crossover with expanding histogram bars, reinforcing short-term strength. Additionally, aligned support from the defence index, which has remained strong in recent weeks, lends further confirmation to the up move.

However, given the steep rally and stretched RSI, a cautious approach is warranted at current levels. Investors may consider re-entering or accumulating on pullbacks toward the Rs 2,150– Rs 2,180 zone, where previous resistance may now offer strong support. The broader trend remains positive, and if the structure holds, the stock could rally toward the Rs 2,450– Rs 2,520 zone in the near term."

A R Ramachandran, SEBI registered Independent analyst says, "GRSE is bullish on the Daily charts but also slightly overbought with next resistance at Rs 2406.  Investors should be booking profits as a daily close below the support of Rs 2097 could  lead to a target of Rs 1790 in the near term."

Net profit climbed 118.9% year-on-year (YoY) to Rs 244.2 crore for the fourth quarter against a net profit of Rs 111.6 crore in the year ago period. Revenue from operations climbed 61.7% YoY to Rs 1,642 crore against Rs 1,015.7 crore in the March 2024 quarter. EBITDA rose 141.8% to Rs 219 crore in Q4 over Rs 90.6 crore a year ago.

Earnings per share (EPS) for Q4FY25 came at Rs 21.32 against Rs 9.74 in Q4FY24.

Profit After Tax (PAT) in FY25 came at Rs 527 crore in FY25 as against Rs 357 Crore in FY24, clocking a growth of 48% (Y-o-Y).

Earnings per share (EPS) for FY25 is Rs 46.04 against Rs 31.19 in FY24.

Earnings before Interest, Tax, Depreciation and Amortization climbed 42% to Rs 756 crore in FY25 against Rs 534 crore in FY24. 

Revenue from operations climbed 41% to Rs 5,076 Crore in FY25 from Rs 3,593 Crore in FY24. 

The board recommended a final dividend of Rs 4.90 per equity share for FY25, subject to the approval of the shareholders. The final dividend will be paid within 30 days from the date of its declaration at the 109th AGM of the company.

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