Garden Reach Share Price Surges 10% to Record High on $21 Million Bangladesh Govt Order

Garden Reach Shipbuilders & Engineers share price soared by more than 10%, hitting a record high of ₹2,309 each on July 1. This surge followed the news of a contract to build an advanced ocean-going tug for the Bangladeshi government. 

This year, Garden Reach share price have jumped by over 163%, significantly outpacing the 10% increase in the benchmark Nifty 50 index.

The company revealed plans to design, construct, and deliver the Ocean-Going Tug Vessel. This vessel will measure roughly 61 meters in length, 15.80 meters in width, and 6.80 meters in depth.

When fully loaded, the tug will require a draught of approximately 4.80 meters and will have a bollard pull capacity of 76 tons forward and 50 tons backward. The vessel's maximum speed under full load will be at least 13 knots.

The tug's main functions will involve towing ships at sea, assisting with berthing and casting off, and helping with turning through pushing and pulling. Moreover, the vessel will be outfitted to conduct rescue and salvage operations at sea.

Garden Reach announced that the $21 million order will be completed within the next 24 months. This contract comes after a recent deal with a German company to deliver a minimum of four multi-purpose cargo vessels. 

Previously, Garden Reach secured a contract in Bangladesh for the delivery of a Trailing Suction Hopper (TSH) dredger. 

Despite this, analysts at Elara Securities issued a 'sell' recommendation on Garden Reach, setting a target price of ₹1,180 per share. They cautioned about the deferment of a large order in NGC from FY24 to CY24. "The postponement of a substantial order in NGC could delay revenue growth beyond FY26, particularly given the stock's impressive performance compared to the Nifty over the past three months," they observed.

Garden Reach Shipbuilders & Engineers Ltd. is an India-based warship building company. The Company is under the administrative control of the Ministry of Defense, primarily catering to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard. 

The Company's divisions include ship division, engineering division and engine division. It has built over 785 platforms, including 108 warships for Indian Navy, Indian Coast Guard and foreign countries. It has designed and built warships, such as frigates, anti-submarine warfare corvettes, fleet tanker and landing ship tank (large), among others.

The Company offers both defense and commercial ship repair services. Its engineering product includes prefabricated steel bridges of various ranges and types, and various deck machinery items. The Company is also engaged in engine production and other engineering activities. It is involved in assembly/testing/overhauling of MTU diesel engines and manufacturing of diesel alternators.