Garden Reach Shipbuilders & Engineers (GRSE) witnessed a significant surge in its shares, climbing up to 5 percent on June 7. The boost came after the company secured the position of the lowest bidder for a Defence Research and Development Organisation (DRDO) contract.
The contract, valued at approximately Rs 500 crore, entails the construction of a research vessel for DRDO. However, it’s essential to note that GRSE has yet to finalize the deal, as negotiations for the contract are still ongoing, and no agreement has been signed thus far.
The stock demonstrated a robust rebound after experiencing a correction of over 17 percent in two days following the election results. This correction was attributed to the weaker-than-expected mandate for the Bharatiya Janata Party-led government. However, GRSE swiftly recovered, gaining around 16 percent in the subsequent two sessions, effectively recouping most of its losses.
Despite the recent volatility, GRSE remains poised for growth, having accumulated over 55 percent in gains year-to-date. The company stands as a significant beneficiary of the Modi government’s emphasis on indigenous defence equipment manufacturing.
Furthermore, brokerage firm CLSA anticipates that the new government under Prime Minister Narendra Modi will prioritize defence and infrastructure projects as part of its 100-day agenda.
As of 11:40 am, GRSE shares continued their upward trajectory, trading 3.89% higher at ₹1,348.60 on the NSE.
