Garuda Construction share price soars after positive listing. Buy, sell or hold?

Stock market today: Beat the market estimates, and Garuda Construction and Engineering Limited shares are listed on the Indian stock market exchanges during Tuesday dealings. Making a positive debut on Dalal Street, Garuda Construction's share price opened on the BSE at ₹103.20 apiece, whereas, on the NSE, it listed at ₹105 per share, delivering around 10 per cent listing gain to the lucky allottees. However, the newly-listed stock witnessed strong buying interest post-listing and scaled to a new peak of ₹120.99 per share on the NSE within a few minutes of the Garuda Construction share listing.

According to stock market experts, Garuda Construction's share listing is surprising for Dalal Street. They said that a strong order book, project diversification, and a superior return on the company's net worth could be the reason for such a better-than-expected listing of Garuda Construction shares. They said that allottees who invested in the public issue for listing gain can book profit and exit, whereas those who want to hold the scrip for the medium to long term should maintain a strict stop loss at ₹95 apiece.

Garuda Construction share price outlook

Speaking on Garuda Construction share listing, Shivani Nyati, Head of Wealth, Swastika Investmart, said, "This positive performance is a pleasant surprise given the pre-listing expectations of a flat or even negative listing, fueled by the modest grey market premium and the cyclical nature of the infrastructure industry."

Nyati said that GCEL's strong order book, project diversification, and superior return on net worth contributed to the positive listing. While the company's growth slowed in FY24 due to the election year, the overall financial performance remains robust.

Investors participating in the IPO are likely sitting on a modest gain, but it's essential to maintain a cautious approach and continue monitoring the company's performance and market conditions. Investors holding the position are suggested to keep a stop loss around the issue price.

"Financially, Garuda Construction and Engineering has shown strong growth. The company's revenue doubled from Rs. 77.02 crores in FY22 to Rs. 154.17 crores in FY24, with an annual growth rate of 26.03%. Profit after tax also increased from Rs. 18.78 crores in FY22 to Rs. 36.43 crores in FY24, reflecting an annual growth rate of 24.72%. However, the grey market premium (GMP) for Garuda Construction's shares is currently at 0%, indicating that there may not be immediate listing gains. However, given the company's financial performance and expansion into high-growth segments, investors allotted shares are advised to consider holding their positions from a medium to long-term perspective," said Sagar Shetty, Research Analyst at StoxBox.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.