Garden Reach Shipbuilders and Engineers Limited (GRSE), a shipbuilding
company, primarily caters to the shipbuilding requirements of the Indian Navy and
the Indian Coast Guard. GRSE was incorporated in Calcutta on February 26,
1934. GRSE is a Schedule B company conferred with Mini Ratna-Category I status
since September 2006. The company has three divisions i.e. (1) Shipbuilding, (2)
Engineering, and (3) Engine Production.

Outlook & Valuation:
On the valuations front, GRSE’s pre-issue P/E works out to 15.6x FY2018
annualized earnings (at the upper end of the issue price band), which is higher
compared to its peer Cochin Shipyard (trading at 14x its FY2018 annualized
earnings). Further, the company’s return ratios are also lower vs. other peers. Thus,
we recommend NEUTRAL rating on the issue.

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