The Great Eastern Shipping Company Limited (GESCO) is one of India’s leading private sector shipping companies. Founded in 1948 by Sheth family members in Mumbai, it has grown to become one of the largest private sector shipping companies in India. GESCO operates a fleet of bulk carriers, tankers, gas carriers, and offshore vessels.
CMP- 1002
Buy Target – 1600 | 24 months
Over the years, GESCO has diversified its operations to include not only shipping but also offshore drilling, oil exploration, and production services. The company has a global presence and is involved in various segments of the shipping industry, including dry bulk, tankers, gas carriers, and offshore services.
Great Eastern Shipping Company has a reputation for its focus on operational excellence, safety standards, and environmental sustainability. It has been recognized for its commitment to quality and customer satisfaction, earning several awards and accolades over the years.
Great Eastern Shipping Company operates a fleet of 44 ships with a capacity of 3.46 million Deadweight Tonnage (DWT). Carrier wise break up of the fleet is provided below.
WHAT’S GOING FOR THE STOCK?
Improved financials and Dividend yield
For Q4, 2024, the Company posted its highest ever net profit of Rs. 2,614. The annual dividend paid for FY 2024 was Rs. 36.30. At the current share price of Rs. 1002, that’s a healthy dividend yield of 3.7%.
Available at very attractive valuations
The Great Eastern Shipping Company is available at a Price to Earnings (PE) Multiple of 5.33 which makes it cheaper than its peers. In fact, if you compare it with the largest shipping company in India -Shipping corporation of India which operates twice the number of ships, Great Eastern Shipping scores higher on every metric.
| Metric | Great Eastern Shipping Company | Shipping Corporation of India |
| P/E | 5.33 | 19.97 |
| ROE | 23.66% | 13.52% |
| ROCE | 20.23% | 10.6% |
| Market Cap | 14,458 Crores | 12,227 Crores |
| Debt/Equity | 0.24 | 0.37 |
| Dividend Yield | 3.6% | 0.17% |
Strong Business Environment
Below is a breakup of company’s fleet size and average time-chartered yield (TCY) in various categories. 
Investment Rational
- The short to medium-term outlook for both Crude and LPG carrier rates looks positive. As we approach the second half of CY 2024, we are seeing renewed economic recovery, industrial activity, and a disturbed world order. Both middle east and Russiaare embroiled in wars which is likely to increase demand for crude tankers and rates are likely to rise sharply.
- Dry Bulk: For the same reason as above transportation of commodities such as coal, iron ore, grains, and other dry bulk goods is likely to rise in the second half of CY 2024.
- The stock is available very cheap at a price to earnings (PE) multiple of 5.3 and has a dividend yiled of 3.7% at the current price. This is a good opportunity to add this stock to your portfolio. Note however, that shipping is a cyclical business and any downturn in economic activity may lead to a correction in stock price.
- The company has a low debt to equity ratio and has high cash reserves which it can utilise to add assets (i.e. new vessels) to its fleet once asset prices cool off.
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