PSU defence stock tumbles 7% after post Q4 earnings

Shares of PSU defence firm Garden Reach Shipbuilders & Engineers (GRSE) tumbled 7% to Rs 448 in Thursday's intraday trade on BSE despite it reporting a 17.16% rise in profit after tax (PAT) on Wednesday. GRSE's PAT grew to Rs 55.3 crore in the March quarter of 2023 as compared to Rs 47.2 crore a year ago.

The company’s revenue from operation rose by 10.68% to Rs 601.17 crore for the March quarter as against Rs 543.18 crore in the year-ago period.

Meanwhile, the company’s EBITDA stood at Rs 90.36 crore in Q4 FY23 against Rs 73.70 crore in the previous year registering a growth of 22.62%.

“Our financial performance during FY 22‐23, the best ever in the company’s history, is a credit to the resilience & resolve of Team GRSE, as the company continues to grow on financials & physical performance,” Cmde Hari PR, IN (Retd) Chairman and MD of GRSE said.

“Delivery of an export vessel to the Cooperative Republic of Guyana & a Fast Patrol Vessel to the Indian Coast Guard, both ahead of schedule, bear testimony to the operational efficiencies of the company. A strong order book coupled with a clear execution strategy promises continued growth in the coming years," he added.

At 10.22 am, the stock was trading 5.3% lower at Rs 456.4 on BSE. However, the stock has surged over 70% in the last one year, while it has declined 5% year-to-date.

As per Trendlyne data, the average target price of GRSE is Rs 453, which shows a downside of 1% from the current market prices. The consensus recommendation from two analysts for the stock is a Sell.

Technically, the day RSI (14) is at 47.7. The RSI below 30 is considered oversold and above 70 is overbought, Trendlyne data showed. MACD is at 12.7, which is above its Center Line, but below the signal line.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)