Business · India Bureau
Goldman Sachs Softens Stance on GRSE Despite Navy Contract Win
Goldman Sachs has upgraded its outlook for Garden Reach Shipbuilders and Engineers following a significant naval order, but the investment bank maintains a sell recommendation on the stock, citing valuation concerns relative to global peers.
LSN India ·
Garden Reach Shipbuilders and Engineers (GRSE) has secured a boost to its financial projections following a major contract award, though analysts at Goldman Sachs remain cautious about the company's near-term prospects. The investment bank raised its EBITDA estimates for fiscal 2028 and 2029 by 11 per cent and 40 per cent respectively, reflecting the positive impact of the new naval order on the company's earnings potential.
Despite the uplift to financial forecasts, Goldman Sachs stopped short of upgrading its overall rating on the stock. The bank continues to maintain a sell rating, citing concerns that GRSE shares are trading at a significant valuation premium compared to international shipbuilders offering similar capabilities.
The naval contract represents a notable win for the state-owned shipbuilder and underscores sustained demand for India's domestic ship construction capabilities. However, analysts believe the current share price already reflects much of the positive momentum from such orders, leaving limited room for further upside appreciation in the near term.
The divergence between Goldman Sachs' improved earnings outlook and its bearish stance highlights the tension between GRSE's operational performance and its valuation in equity markets, a dynamic that may continue to weigh on investor sentiment.