IIFL Securities Stock Idea: Buy Garden Reach Ship&eng with Target Rs 1550

IIFL Securities issued a "buy" recommendation for Garden Reach Shipbuilders & Engineers (GRSE) on May 24, setting a target price of Rs 1550. This suggests a 3.57% upside potential from the current market price of Rs 1496.75. The recommendation is based on the company's strong order book, the expected growth in the defense sector, and the company's focus on product diversification.

About Garden Reach Ship&eng:

Garden Reach Shipbuilders & Engineers Limited (GRSE) is a public sector undertaking (PSU) under the Ministry of Defence, Government of India. Incorporated in 1960, it is engaged in shipbuilding, repair, and refit of warships, submarines, and auxiliary vessels. GRSE also provides engineering and support services to the Indian Navy, Coast Guard, and other defence organizations. It has three shipyards located in Kolkata, West Bengal; Visakhapatnam, Andhra Pradesh; and Mumbai, Maharashtra. GRSE is a leading defence shipyard in India, known for its expertise in shipbuilding, design, and engineering.

52 Week Price Trend:

Garden Reach Ship&eng (GRSE) has witnessed a remarkable growth of over 277% from its 52-week low of Rs. 398.3 to its current market price (CMP) of Rs. 1496.75. This surge highlights the company's strong financial performance and positive market sentiment. Despite the challenges posed by the COVID-19 pandemic, GRSE has maintained its growth trajectory, demonstrating its resilience and adaptability. The company's robust order book and diversified product portfolio position it well for continued success in the shipbuilding and engineering sectors.

Stratzy's MOST Analysis:

Based on Stratzy's MOST framework, GRSE has received an AA rating. This framework evaluates a company's Management, Outlook, Safety, and Trend. An AA rating indicates a medium fundamental risk, with scores in each pillar contributing to the overall assessment. This rating implies that GRSE exhibits sound management practices, a positive outlook, adequate safety measures, and a favorable market trend. Overall, the AA rating suggests that GRSE is a relatively low-risk investment with a solid foundation.

Company's Fundamentals:

Garden Reach Ship&eng (NSE:GRSE) is a shipbuilding and engineering company listed on the National Stock Exchange (NSE) of India. The company's Stock PE ratio of 30.93 indicates that investors are willing to pay 30.93 times the company's annual earnings per share for its stock. The PB Ratio of 5.95 implies that the company's market value is 5.95 times its book value, suggesting that it is currently undervalued. Furthermore, the Dividend Yield of 0.97% indicates that investors can expect a modest return of 0.97% per year in the form of dividends.

Fundamental and Technical information provided in this blog were last updated on 24 May, 2024

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