GRSE: Riding the Naval Upsurge

Garden Reach Shipbuilders & Engineers Ltd (GRSE) stands tall as one of India's top shipbuilding companies, with a legacy of delivering 111 warships to the Navy and Coast Guard. The company is well-known for its competence in building smaller, highly specialized vessels, though it is also capable of constructing frigate-sized warships. Currently, GRSE has about 40 vessels under construction and is expanding into commercial and export-oriented segments, including new orders from Germany that mark its entry into competitive global markets. The order book is a key strength. Management expects it to exceed ₹500 billion by FY26, offering visibility of revenues for nearly a decade. Major new contracts, like the Next Generation Corvette and potentially the P7 Bravo project, could push the total to ₹750 billion in 15-18 months. This robust pipeline, along with several projects approved by the government worth ₹1.5 trillion, sets the groundwork for sustained growth. Strategic expansion is in play, with plans for a modern greenfield shipyard and investments in autonomous, green, and hybrid vessels, keeping

aligned with new-age maritime demands. Financially, GRSE reported a 38% rise in revenue and a 48% jump in profit for H1 FY26, with operating margins improving. Though the ship repair and engineering divisions contribute modestly, the main business remains robust and set for expansion. From a shareholder perspective, the expanding order book, export breakthroughs, and ongoing modernization make GRSE's outlook highly attractive. Risks lie in execution and sector cyclicality, but if management delivers, shareholders can benefit from strong cash flows and an industry tailwind, while current valuations offer a reasonable margin of safety. This present position is valuable for shareholders, offering multi-year potential despite the need for efficient execution and delivery.