Shares of Garden Reach Shipbuilders & Engineers surged over 10 percent to reach an all-time high of Rs 2,309 apiece on July 1, following the announcement of a contract to construct an advanced ocean-going tug for the government of Bangladesh.
So far this year, shares of Garden Reach surged over 163 percent, as compared to a 10 percent rise in the benchmark Nifty 50 index.
The company announced that it will design, construct, and deliver the Ocean-Going Tug Vessel. The tug will be approximately 61 meters in length, 15.80 meters wide, and 6.80 meters in depth.
With a full load, the tug will have a draught requirement of around 4.80 meters and a bollard pull capacity of 76 tons ahead and 50 tons astern. The vessel’s maximum speed with a full load will be at least 13 knots.
The primary functions of the tug will include towing ships at sea, assisting with berthing and casting off, and aiding in turning through pushing and pulling. Additionally, the vessel will be equipped to perform rescue and salvage operations at sea.
Garden Reach stated that the order, valued at $21 million, will be executed within the next 24 months. This contract follows a recent agreement with a German company to deliver at least four multi-purpose cargo vessels.
Earlier, Garden Reach had secured another contract in Bangladesh for the delivery of a Trailing Suction Hopper (TSH) dredger.
Despite this, analysts at Elara Securities had shared a 'sell' call on Garden Reach with a target price of Rs 1,180 per share, cautioning against deferment in large orders in NGC to CY24 from FY24.
"The deferment of a large order in NGC may defer revenue growth beyond FY26, and given stellar stock outperformance versus the Nifty in the past three months," they noted.
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