GRSE reported a strong Q3 FY26, with revenue growing 49% YoY to ₹1,896 crores, and Profit After Tax surging 74% YoY to ₹171 crores. The order book stands at ₹18,482 crores as of December 31, 2025, marking the first time it has dipped below ₹20,000 crores due to high execution rates. Management detailed significant defense pipeline visibility, including a high-probability win for the ₹33,000 crore Next Generation Corvette project, positioning FY27 as a peak revenue year.
Q3 and 9M FY26 Financial Highlights
Garden Reach Shipbuilders & Engineers Ltd. (GRSE) hosted its Analyst and Broker Meet following the release of its results for the quarter and nine months ending December 31, 2025. Chairman & Managing Director, Cmde P. R. Hari, noted that Q3 was a very encouraging quarter.
- Revenue from operations grew 49% YoY, increasing from ₹1,271 crores in Q3 FY’25 to ₹1,896 crores in the current quarter.
- Profit After Tax (PAT) saw a massive increase of 74% YoY, rising from ₹98 crores to ₹171 crores.
- For the nine-month period, revenue stood at ₹4,883 crores, nearing the previous full fiscal year’s revenue of ₹5,076 crores.
Order Book Status and Major Project Execution
The current order book position as of December 31st is ₹18,482 crores, a level management views positively as it indicates an accelerated execution rate.
Management provided an update on platform deliveries during the first nine months:
- Five major platforms delivered, equating to almost one ship every two months. This included one Frigate P-17 Alpha, three Anti-Submarine Shallow Water Crafts, and one Survey Vessel.
- Three more major vessels are expected to be delivered in the next three months.
Defense Projects Progress
The existing order book of ₹18,482 crores comprises 10 projects with 42 platforms, 77% of which is defense-related (₹14,276 crores).
- P-17 Alpha Project: One of three ships delivered; the second ship is at 93% physical progress, targeted for delivery in the next three months. The third ship is on track for delivery this calendar year.
- Survey Vessel Large Project: A four-ship project; three delivered, the fourth at almost 95% physical progress, closing in March.
- Anti-Submarine Shallow Water Crafts: An eight-ship project; four delivered (fourth at 92-93% progress), with delivery targeted for April/May. The contract is expected to close next financial year.
- Next Generation Oceangoing Patrol Vessel (NGOPV): A four-ship project; first two ships at almost 60% progress, the next two at 45-48% progress. Deliveries start in FY 2027-28.
Upcoming Defense Pipeline
Management expressed high confidence in securing the Next Generation Corvette (NGC) order, a five-ship project worth approximately ₹33,000 crores, with price negotiations completed. They anticipate signing this contract by the end of the current financial year, aiming for FY27 to be a peak revenue year.
Furthermore, seven projects where Acceptance of Necessity (AON) has been granted represent a potential order pipeline of approximately ₹1,55,000 crores. This includes the P-17 Bravo (7 ships, ₹70,000 crores AON), the LPD project (AON value of ₹35,000 crores), and the Mine Countermeasure Vessel project (AON value of ₹32,000 crores).
Non-Defense and Export Business
Non-defense orders (18% of the current book) include a 13-vessel hybrid ferry project for West Bengal and three research vessel projects. Export work, accounting for about 5% of the book, includes a dredger for Bangladesh and a 12-multipurpose vessel order for a German client (increased from the initial four vessels).
The non-defense pipeline is estimated at over ₹1 lakh crores, with management conservatively expecting to secure about 15% of these orders over time, primarily through partnerships due to capacity constraints.
Capacity Expansion and Strategy
To address the huge demand, GRSE is systematically increasing its capacity:
- Capacity target: 24 platforms concurrently (two years back) to 28 platforms (2025), aiming for 32 platforms by the end of the calendar year, and potentially 36 upon completion of initial refurbishments.
- Brownfield Expansion: Taking over 3 sites from Syama Prasad Mookerjee Port in Kolkata; two facilities are undergoing modernization, with production expected by year-end for two and later for the third, bigger facility.
- Greenfield Expansion: Finalizing two sites in Gujarat (Kandla and Bhavnagar). Management estimates these large-platform facilities will take 3 to 5 years to become fully operational.
Government Incentives and Margin Outlook
Management highlighted that government initiatives totaling about ₹69,725 crores are active, focusing on shipbuilding financial assistance (15% to 30% subsidy, ₹24,736 crores earmarked) and credit notes. These schemes will be leveraged for expansion.
Regarding margins, while some earlier sustenance orders were taken at low margins, future execution, especially for large defense projects like P-17 Bravo (which will be pursued independently), is expected to maintain healthy margins. Commodity price fluctuations are expected to have a minimal impact on margins, as about 65% of project cost relates to equipment finalized early in the contract.
Q&A Summary: Timelines and People
- NGC Revenue Accrual: Expected in Q4 FY’28, with equipment procurement decisions following contract signing in FY’27.
- Technology & Partnerships: Collaborations with Swan Defence (for large commercial vessels) and HSL (for the LPD project) are strategic to gain access to necessary technologies and infrastructure for complex projects.
- Workforce & Automation: GRSE is expanding its executive team (inductions of 137 executives confirmed) and investing in automation, including robotic welding, to maintain execution excellence as scale increases.
Source: BSE
