93.60% Dividend: Multibagger Defence PSU Stock Garden Reach Ship Jumps 5% On Rs 490 Cr Order; BUY

The shares of Garden Reach Shipbuilders & Engineers Ltd (GRSE), a Public Sector Undertaking (PSU) in India's defence sector, opened with notable gains exceeding 5% on Monday following the announcement of a significant contract from the Ministry of Defence. The stock surged to a day's high of Rs 1,870 per share, while the lowest trading point was recorded at Rs 1,822.25.

On October 18, 2024, GRSE disclosed that it has secured a substantial contract from the Defence Research and Development Organisation (DRDO) for the design and construction of an Acoustic Research Ship (ARS). This contract, awarded by the Naval Physical & Oceanographic Laboratory (NPOL), is valued at approximately Rs 491 crore.

In a formal filing to the stock exchange, GRSE confirmed it had received a Letter of Intent from NPOL, outlining the project's scope. This includes the design, development, construction, integration of equipment, testing, certification, and commissioning of the Acoustic Research Ship. The completion timeline for this vital project is set at 36 months from the date of contract signing.

The Acoustic Research Ship is anticipated to play a crucial role in advancing the capabilities of the Indian Navy, particularly in the study of underwater acoustics and sonar performance. These areas are essential for conducting comprehensive oceanographic research that directly impacts national defence.

October has proven to be a busy and fruitful month for GRSE. Earlier in the month, the shipbuilder was awarded two letters of acceptance from the West Bengal government for the design, construction, operation, and maintenance of hybrid electric ferries under the West Bengal Inland Water Transport, Logistics, and Shipping Development (WBIWTLSD) project. This initiative includes the construction of 100 non-air-conditioned hybrid electric ferries for cross-river operations, alongside 200 twin-deck hybrid electric ferries with air conditioning on the main deck. The project is expected to modernize the state's water transport infrastructure while promoting the adoption of environmentally friendly technologies.

In addition to these contracts, GRSE has also signed an agreement for the construction and delivery of one of four additional multi-purpose vessels (MPVs) with a capacity of 7,500 deadweight tonnes (DWT). This order was complemented by another contract with Carsten Rehder Schiffsmakler und Reederei GmbH & Co KG, a German shipbuilding firm, for the construction and delivery of the fifth multi-purpose vessel of similar tonnage.

As of 9:45 am on the National Stock Exchange (NSE), shares of Garden Reach Shipbuilders were trading with a gain of more than 4%, reaching Rs 1,836.40 per share. Over the past year, the stock has delivered impressive returns, yielding multibagger gains of over 130% for its investors.

The development and construction of the Acoustic Research Ship holds particular significance as India intensifies its focus on enhancing naval capabilities and research. Underwater acoustics and sonar technology are critical for contemporary naval operations. The introduction of a dedicated vessel for these research initiatives will empower the Indian Navy to conduct in-depth studies and testing in essential fields.