Garden Reach Sh.Q1 FY27
Garden Reach Sh. Q1 FY27 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹2,608P/E: 37.2Market Cap: ₹29.8K CrSector: Aerospace & Defense
Management growth scorecard
Revenue
Category 2
Margin
Category 3
Fundraise
N/A
Order
No
Capex
Yes
1 of 4 growth signals are positive — mixed outlook.
Full analysisRevenue guidance
Category 2- →GRSE expects to maintain strong execution momentum in FY27, continuing from recent quarters with robust ship deliveries (eight ships delivered last year).
- →Current order book stands at approximately ₹13,596 crore, with major projects like P-17 Alpha (₹4,519 crore left) and Anti-Submarine Shallow Water Craft (₹1,816 crore left), supporting steady revenue recognition.
- →Next-Generation Corvette (NGC) contract revenue to begin from FY28, with full project completion targeted by 2034-35, adding to revenue streams in the medium to long term.
- →Water metro projects across multiple states may drive additional orders worth about ₹1,500 crore with 30-40 platforms, contributing to volumes.
- →Expansion plans include greenfield shipyards in West Bengal and Gujarat, expected operational in 3-5 years, increasing capacity from 28 to 43 platforms, including larger commercial vessels, further boosting future sales volumes.
- →Anticipated inflow of ₹60,000 crore in new tenders during the current year with ₹80,000 crore already out, totaling opportunities near ₹1,40,000 crore, ensuring a strong order pipeline.
Margin guidance
Category 3- →Q1 FY27 showed strong growth with total income up 38% YoY, revenue from operations up 39%, and PAT up 44%.
- →Earnings per share increased by 44% from ₹10.49 to ₹15.09 in Q1 FY27.
- →Current execution momentum expected to continue given sizable order book of ₹13,596.26 crore.
- →Pay commission hike anticipated to increase employee costs by 15-20%, factored into projections.
- →Major upcoming defense orders totaling around ₹1,50,000 crore (₹80,000 crore live + ₹70,000 crore expected), providing significant revenue visibility.
- →Expansion plans to increase concurrent shipbuilding capacity from 28 to 32 platforms by end FY27 and further through Greenfield and Brownfield projects; expected to boost long-term growth.
- →Non-defense commercial opportunities and water metro projects add to future revenue streams.
- →Overall, strong growth in profits and EPS is expected to be sustained in near to medium term.
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Fundraise plans
- →There is no explicit mention of any current or planned fundraising through debt or equity in the provided transcript.
- →The company is focused on expansion through CAPEX infusion, with planned capital expenditure of approximately ₹2,000-2,200 crore for greenfield and brownfield projects.
- →Expansion projects are being funded internally or through existing arrangements, with no specific reference to raising funds via debt or equity.
- →Corporate actions such as stock split or bonus shares are currently awaiting government approval, but no direct indication of equity fundraising was provided.
- →Overall, the discussion highlights organic growth and internal funding rather than external fundraising through debt or equity.
Order book
No- →Current total order book: ₹13,596.26 crore
- → - Shipbuilding: ₹12,980 crore (95%)
- → - Ship repair: ₹96 crore
- → - Naval vessel gun: ₹219 crore
- → - Bailey bridge: ₹158 crore
- → - Deck machinery: ₹58 crore
- → - Diesel engine plant: ₹82 crore
- →Major shipbuilding projects in order book:
- → - P 17 Alpha: ₹4,519 crore
- → - Anti-Submarine Shallow Water Craft: ₹1,815 crore
- → - Survey Vessel Large: ₹225 crore
- → - Next Generation Offshore Patrol Vessel (NGOPV): ₹3,075 crore
- → - Ocean Research Vessel: ₹740 crore
- → - Acoustic Research Ship: ₹450 crore
- → - Coastal Research Vessel: ₹258 crore
- → - Ferry: ₹203 crore
- → - Multi-Purpose Vessels and Dredger: ₹1,355 crore
- →Upcoming/RFP Live Orders worth approximately ₹80,000 crore:
- → - Navy & Coast Guard projects including fast interceptor crafts, mine sounder measure vessels, landing platform docks, etc.
- →Expected upcoming RFPs worth around ₹70,000 crore (including Landing Platform Docks and Mine Countermeasure vessels).
- →Total expected orders near ₹1,50,000 crore combining live and expected RFPs.
Capex plans
Yes- →GRSE has a clear expansion plan involving both Brownfield and Greenfield projects on eastern and western seaboards.
- →Brownfield modernization within current premises aims to increase shipbuilding capacity from 28 to 32 platforms by end of calendar year.
- →Greenfield project in West Bengal (Raichak, closer to the sea) involves setting up a full-fledged shipyard with capital infusion approx. ₹2,200 crore; project expected to take 3-5 years.
- →Another Greenfield facility on western seaboard focused on total ship solution (shipbuilding, green ship recycling, ship repair) with capital infusion approx. ₹2,000 crore; expected completion in about 3 years.
- →Minor revitalization projects at two premises taken on long-term lease from Syama Prasad Mookerjee Port, capital infusion around ₹200 crore, completion within 18 months.
- →Investment also targeting new technologies and robotics adoption in shipbuilding and bailey bridge fabrication.
How does Garden Reach Sh. rank vs peers in Aerospace & Defense?
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How does Garden Reach Sh. rank in Aerospace & Defense?
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