Up 16x in 5 yrs but this PSU defence stock is headed for downside? What should you do?

GRSE shares target price: When investors are chasing defence stocks for strong returns, domestic brokerage firms have turned cautious on a Multibagger defence stock, which has zoomed nearly 16x in the last five years 26x since its IPO. However, analysts see up to 17 per cent correction in the counter.

We are talking about Garden Reach Shipbuilders & Engineers Ltd (GRSE), which made its stock market debut in October 2018, when the company raised Rs 344 crore from its maiden stake sale, offering its shares for Rs 118 apeice. The stock has delivered 2,275 per cent return from its IPO price, while it has surged 26 times from its lows at Rs 101 post listing.

Garden Reach Shipbuilders & Engineers is a shipbuilding company in India under the administrative control of the Ministry of Defence (MoD). The company’s extensive product range spans from ‘Warships to Weapons’, including commercial ships, various deck machinery, marine diesel engines, naval surface guns, and bailey-type portal steel bridges.

Shares of GRSE settled at Rs 2,689 on Friday and the company's total market capitalization stood at little below Rs 31,000 crore mark. The stock has zoomed a solid 16 times in the last five years and it has soared 37 per cent from its 52-week low at Rs 1,965, hit on March 30, 2026. Despite the rise the stock is down 24 per cent from its 52-week high hit in June 2026.

GRSE Q4 results

Garden Reach Shipbuilders reported a 24 per cent year-on-year (YoY) growth in the net profit at Rs 303 crore, while revenue from operations was up 29 per cent YoY to Rs 1,642 crore for the March 2026 quarter. Ebitda rose 61 per cent YoY to Rs 355 crore, while margins improved to 16.8 per cent for the quarter. The company announced a final dividend of Rs 6.7 per share.

GRSE target prices

GRSE maintained strong execution momentum in FY26, driven by robust naval project deliveries, margin expansion, and healthy revenue growth. While the order book moderated, a strong defence pipeline led by the NGC project, capacity expansion, exports, and shipbuilding diversification supports long-term growth visibility through FY27 and beyond, said ICICIDirect Research.

It estimates revenue and ebitda CAGR at 11 per cent and 12 per cent, respectively as the execution is expected to remain healthy over FY26-28E, with margins coming in at 11 per cent. "We believe that sustainable execution and timely awarding of NGC and other large platforms would be key triggers for long-term growth. We maintain rating to 'hold' on GRSE with a target price of Rs 3,000," it said.

GRSE surprised on the positive in Q4, as it reported FY26 sales of Rs 7,000 crore, higher than provisional sales disclosed on March 31, of Rs 6,400 crore. This is because three major vessels were delivered on the same day , which resulted in revision in revenue bookings for the quarter. Ebitda margin expanded due to delivery of high-margin P17A ships during Q4, said Elara Capital.

"The Next Generation Corvettes (NGC) order worth Rs 33,000 crore has been delayed, resulting in reducing our EPS estimates by 9 per cent for FY27 and 4 per cent for FY28. We expect growth momentum to peak in FY27 , due to the bell curve execution cycle. Thereafter, a mix of smaller ship orders and spares may sustain sales. We revise to 'sell' with a lower target price of Rs 2,230," it said.