Garden Reach Shipbuilders & Engineers (GRSE) delivered robust financial performance in Q2 FY27, posting a 12.4% year-on-year increase in net profit after tax to ₹172 crore compared to ₹153 crore in the corresponding quarter last year. According to the company's latest NSE filings, this growth was achieved despite facing significant headwinds from rising material costs. The shipbuilding company's revenue from core operations advanced 8.9% YoY to ₹1,826.6 crore in the second quarter of FY27, up from ₹1,677 crore in the same quarter a year earlier. The company's Board of Directors approved these unaudited standalone financial results for the quarter and half year ended 30 September 2026, as required under Regulation 33 of SEBI LODR Regulations, 2015.
The company's financial statements revealed significant cost pressures during the quarter. Overall expenses surged 7.6% to ₹1,654 crore in Q2 FY27, compared to ₹1,537 crore in the same period a year earlier. Most notably, raw material costs increased 60.3% YoY to ₹1,087 crore in the period under review, from ₹677.86 crore in the same quarter of the previous financial year. Despite these increased expenses, GRSE managed to post profits due to the company's overall revenue growth during the quarter. The statutory auditors of GRSE issued a Limited Review Report on the unaudited financial results for the quarter and half year ended 30 September 2026, as part of the filing disclosure.
GRSE demonstrated strong operational performance with significant margin improvements across key metrics. The company's operating profit (EBITDA) expanded 25.3% YoY to ₹195.4 crore in Q2 FY27, from ₹156 crore in Q2 FY26. EBITDA margins increased 70 basis points to 10.7% during the September quarter, compared to 9% levels in the corresponding quarter year earlier. However, gross margins dropped 1,480 basis points YoY to 33.4% due to execution mix and the bell curve revenue cycle. Additionally, net profit margins gained 30 basis points to 9.47% in the quarter under review, from earlier 9.17% levels in the same period a year earlier. The company's earnings per share increased to ₹30.10 apiece from ₹23.92 in the same period last year. Total income for Q2FY27 was recorded at ₹1,886 crore, registering 8% growth from ₹1,746 crore in Q2FY26.
Global investment banking firm Goldman Sachs has reiterated its bearish stance on Garden Reach Shipbuilders, maintaining a 'Sell' rating with a price target of ₹1,735 per share, indicating a downside potential of 22% from current levels. According to CNBC TV18, the firm noted that while the company's Q2 results missed revenue and earnings per share estimates, the ₹32,000 crore Next-Generation Corvette order supports near-term growth. However, Goldman Sachs expressed concerns over revenue decline post FY28, with no major deliveries expected after the P-17A ship delivery in Q3, highlighting margin concerns post FY27. Despite these concerns, the investment bank has raised Earnings Per Share estimates for FY27 and FY28 by 4% and 6% respectively, citing the higher NGC order value of ₹32,000 crore compared to earlier estimates of ₹29,000 crore.
Investors responded mixed to the Q2 earnings announcement, with GRSE shares trading 0.6% lower at ₹2,212 on Thursday, November 12, snapping a three-day gaining streak. The stock has declined 10% so far this year but corrected 34% from its record high level of ₹3,339. According to CNBC TV18, of the 11 analysts covering Garden Reach Shipbuilders, eight have a 'buy' rating, one has a 'hold' rating and two have 'sell' recommendations. The company achieved several significant operational milestones during Q2 FY27, as highlighted by Cmde PR Hari, IN (Retd), Chairman and Managing Director, including launching the second Next Generation Offshore Patrol Vessel 'Shruti' for the Indian Navy and delivering an Ocean Research Vessel 'Sagar Manthan' for NCPOR, Ministry of Earth Sciences.
