Posted on June 10, 2024
Shares of Garden Reach Shipbuilders & Engineers were gaining on Friday after the company emerged as the lowest bidder for a Defence Research and Development Organisation (DRDO) contract.
What Happened: The contract, worth around ₹500 crore, encompasses building a research vessel for the DRDO. It is also worth noting that Garden Reach is yet to bag the order as the contract is currently under negotiation and has not yet been signed.
The company is seen as a key beneficiary of the Narendra Modi government’s focus on the indigenisation of defence equipment.
Meanwhile, brokerage firm CLSA also expects the incoming government to implement several defence and infrastructure orders as part of its 100-day agenda.
Price Action: Garden Reach Shipbuilders’ share price was up 3.5% at ₹1,343.20 around noon on Friday. The stock is up around 54% so far this year.
The stock rebounded strongly following its over 17% correction in two days post the election results, attributed to the weaker-than-expected mandate for the Bharatiya Janta Party-led government. However, it has since gained around 16% in the next two sessions, recovering most of its losses.
