Multibagger defence stock GRSE hits fresh high on pact with Norway-based Kongsberg, up 100% YTD. More upside on cards?

Multibagger defence stock Garden Reach Shipbuilders (GRSE) surged nearly 10% in intra-day deals on Wednesday, June 4, to its upper circuit limit following an order win from Norway-based Kongsberg. With this rally, GRSE shares also hit their fresh 52-week high.

This agreement between Norway's Kongsberg and GRSE will pave the way for India to build its first-ever Polar Research Vessel (PRV) indigenously, according to an official statement.

"The MoU between GRSE and Knogsberg marks an important milestone for India’s shipbuilding sector as it will receive design expertise for developing the PRV, while taking into account the requirement of National Centre for Polar and Ocean Research (NCOPR), who will use it for research activities in the polar and southern ocean realms," the statement said.

GRSE, with its rich experience of constructing complex maritime platforms like warships, survey and research vessels, will build this PRV in its yard in Kolkata, ensuring a boost to the government’s Make In India initiative, it added.

GRSE share price trend

The defence public sector undertaking (PSU) stock opened the day at ₹3184, higher than its last close of ₹3149.90. It gained further to scale a new high of ₹3464.85, an upside of 9.99%.

GRSE stock has had a stellar run lately, amid a rise in defence counters following Operation Sindoor. Against this backdrop, the defence stock has risen 104% year-to-date (YTD) while it is up 168% in just three months.

“GRSE has surged by around 10% after signing an MoU with Norway’s Kongsberg to co-develop India’s first Polar Research Vessel, which is a strategic technological collaboration. The company also had a solid Q4 FY25 quarter with revenue jumping 61.7% YoY, and with operational efficiencies improving, EBITDA jumped by 144% YoY for the same quarter. Management also sounded positive for better order inflows for FY26 over FY25. GRSE EPS growth is expected to CAGR around 13-14% from FY25 to FY28E and see improvement in ROE as well on the back of strong order inflows and strong operational capabilities but there is no comfort on valuation as the company is already trading at 70x and 54x on P/E for FY26E and FY27E earnings which looks highly stretched at this moment,” said Vaqarjaved Khan, Sr. Fundamental Analyst, Angel One.

GRSE shares: Should you buy?

According to Jigar S Patel, Senior Manager - Technical Research, Anand Rathi Shares and Stock Brokers, at the current juncture, GRSE appears to be overextended, having delivered a remarkable return of approximately 192% from its low of 1185.

“The stock is currently trading near the 3400 mark. On the downside, key support levels are expected around 3000, followed by 2800, while resistance is seen near 3500 and subsequently at 3600. Considering the sharp up move, we recommend booking profits at higher levels,” said Patel.

Anshul Jain, Head of Research at Lakshmishree Investments, said that GRSE has broken out of a rounding pattern on the weekly chart at ₹2,814 and is currently sustaining above it. “However, the momentum has extended sharply, making an 8-week consolidation likely. A pullback towards ₹2,814 can be expected as part of the retest. If this pullback unfolds on lower volumes, it would present an ideal buying opportunity for traders looking to enter on strength post-consolidation, with the overall bullish structure remaining intact,” Jain added.

(With inputs from PTI)

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