Jobaaj Stories
GRSE Share Price Soars 20%
On March 19, 2025, shares of Garden Reach Shipbuilders & Engineers (GRSE) skyrocketed, hitting a 20% upper circuit limit at Rs 1,641.35 on the NSE. This surge, marking the stock's fourth consecutive day of gains, was fueled by a bullish sentiment in the Indian defence sector and a broader market recovery.
Defence Sector Rally
The Nifty India Defence index jumped nearly 6%, reflecting a positive investor outlook. Several defence stocks mirrored GRSE's impressive performance, including Cochin Shipyard (up 10%), Hindustan Aeronautics (up 5.16%), and Mazagon Dock Shipbuilders (up 10.96%). This surge follows a significant increase in the Indian defence budget's capital outlay for FY25 to Rs 1.8 lakh crore – a 12.9% rise from FY25RE and 4.7% from FY25BE. Experts like ICICI Securities see this as a strong entry point for investors, highlighting the sector's robust fundamentals.
Driving Forces Behind the GRSE Surge
Several factors contributed to GRSE's impressive gains. The recent completion of Contractor Sea Trials for two warships simultaneously boosted investor confidence. Furthermore, increased global defence spending, particularly the German government's commitment to increased military expenditure, created a positive ripple effect across the sector. The growing demand for Indian defence equipment, with exports surging 32.5% in FY24, adds to the positive outlook. Analysts point to strong order backlogs and improving revenue visibility for many defence companies as further indicators of a healthy sector.
Expert Opinions and Future Outlook
While some analysts, like Vikas Gupta of Omniscience Capital, caution against overvaluation in the defence index, others maintain a positive outlook. Antique Stock Broking, for example, has issued 'Buy' ratings for several defence stocks, including GRSE (target price Rs 1,783). ICICI Securities also holds positive views on several defence companies including GRSE, highlighting their potential to benefit from increased domestic and international contracts. However, it's crucial to conduct thorough research and consider expert opinions before making any investment decisions.
Disclaimer:
This information is for informational purposes only and does not constitute financial advice. Consult a financial advisor before making any investment decisions.
