GRSE Final Dividend ₹6.70: Record Date, Yield & Sustainability (FY26)

The GRSE dividend 2026 final payout was ₹6.70 per share (67% of the ₹10 face value). It took the Garden Reach Shipbuilders & Engineers dividend for FY26 to ₹19.60 per share, or 196% of face value. The Board recommended it on 28 April 2026 and shareholders approved it at the 110th AGM on 25 September 2026.

The headline "196%" says little about the return. At the 28 September 2026 price of ₹2,246, the final dividend yields 0.30% and the full-year payout 0.87%.

Garden Reach Shipbuilders & Engineers Limited (NSE: GRSE, BSE: 542011, ISIN: INE382Z01011) is a Kolkata-based defence shipyard under the Ministry of Defence. It builds frigates, corvettes, offshore patrol vessels and survey ships, mainly for the Indian Navy and Coast Guard. It also makes portable steel bridges, deck machinery and 30mm naval guns.

According to its press release, GRSE has built more than 800 platforms, including 118 warships, and can build 28 ships at a time. It delivered 8 warships in FY26. The Government of India owns 74.50%. GRSE has no subsidiaries, so its standalone accounts are its complete financial statements. Reports say it received Navratna status in 2026.

Q4 alone produced 30.3% of revenue and 40.5% of PAT, so the year's earnings were concentrated in the last quarter. That is common for a shipbuilder that books revenue as work progresses and receives payment when projects hit milestones.

"FY26 marks a landmark year for GRSE wherein our robust physical performance has been translated into strong financial results. During the year, we delivered 08 warships, that means a ship every one & a half months." (Cmde PR Hari, IN (Retd), CMD, press release dated 28 April 2026)

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The dividend follows a rule, not a whim. For three years in a row, GRSE has paid out almost exactly 30% of PAT, which matches the government's guideline that CPSEs distribute at least 30% of profit. Dividends therefore rise and fall with reported profit. The weak spot is what the profit is made of. In FY26, ₹747.93 Cr of profit came with negative operating cash flow of ₹289.72 Cr, so the cash for the dividend came from reserves.

Because the payout ratio is fixed at about 30%, the FY27 dividend depends on FY27 profit. The company has made no guidance on dividends for FY27.

The share count was checked three ways: capital ÷ face value, PAT ÷ EPS, and market cap ÷ price. All three give 11.455 crore shares. The auditor gave an unmodified opinion, with the Emphasis of Matter on Note 2 described above.

1. 28 Apr 2026: Board recommends ₹6.70 final

   Announced with the audited FY26 results

2. 18 Sep 2026: Record date and ex-date

   From third-party corporate-action data (5paisa). With T+1 settlement, the ex-date and record date fall on the same day. Confirm against the NSE/BSE circular.

3. 25 Sep 2026: 110th AGM

   Shareholders approved the final dividend

4. On or before 25 Oct 2026: Payment

   This is the 30-day legal deadline. The company has not disclosed the exact date.

Shareholders whose names were in the register of members or depository records at the close of the record date are entitled to the dividend. Buyers on or after the ex-date did not qualify.

Yield reality check: At announcement, the stock traded near ₹2,927.85 (Business Today, 28 Apr 2026), which gave a final-dividend yield of 0.23%. The yield has since risen to 0.30%. The dividend did not change. The share price fell 23.3%. A higher yield here is not a sign of better shareholder returns. A buyer at ₹2,246 earning the full ₹19.60 would get less than 1% before tax.

Classification: Consistent Payer. The payout mix has changed, though. The final dividend's share of the annual total went from 11% in FY23 to 34% in FY26, and FY26 had two interims instead of one. GRSE now pays three times a year, which gives income investors cash more often.

Operating leverage was strong. Core EBITDA margin rose from 8.30% to 11.36%, mainly because materials fell from 65.5% to 48.9% of revenue. Some costs moved elsewhere rather than disappearing: sub-contracting rose 144.5% and project-related expenses 169.8%. Other income fell from 47.6% to 27.3% of PBT, so profit now depends more on shipbuilding and less on treasury income.

How the dividend was funded: from cash reserves. GRSE redeemed a net ₹357.14 Cr of fixed deposits and paid ₹203.90 Cr in dividends during FY26, which matches the computed FY25 final plus FY26 interims exactly. No borrowing was used.

The ₹3,388 Cr cash pile looks large, but much of it is not free. Other current liabilities of ₹5,768 Cr are mostly customer advances for ships still being built, and they will be used up as those ships are delivered. Treat the cash as working capital, not surplus.

Verdict: Moderately Sustainable. The dividend passes on profit and on cash in the bank, but not on cash generated during the year. Cash flow at defence shipyards swings with Navy milestone payments. FY23 had OCF of +₹1,450 Cr and FY24 had -₹707 Cr (Screener.in). One weak year is not a trend, but a second year of negative cash flow would start to erode the reserves.

GRSE has the highest yield and ROCE in this group and the lowest P/E among the three shipyards. Negative operating cash flow was common across the sector in FY26. Mazagon Dock's outflow was nearly 10x larger, which suggests the Navy's payment timing was the main cause and not a GRSE-specific problem.

Three of every four rupees paid out go to the Union government. This explains the fixed 30% payout: CPSE dividend policy is set with the government's revenue needs in mind. Retail holders make up 20.36% of the equity, spread across about 3.99 lakh shareholders (June 2026). FII and DII holdings are small at 3.21% and 1.93%. Every shareholder receives the same amount per share.

This final dividend is paid in tax year 2026-27, so the Income-tax Act, 2025 applies. Dividends are taxed at your slab rate. The company deducts 10% TDS (Section 393(1), which replaced old Section 194) once it pays a resident more than ₹10,000 in dividends in the year, and a higher rate if no PAN is on record. Non-residents are taxed at 20%, subject to any applicable tax treaty. From 1 April 2026, interest paid on money borrowed to buy shares can no longer be deducted from dividend income.

• Cash conversion: operating cash flow was -₹289.72 Cr and receivables quadrupled to ₹1,220.87 Cr.
• Estimate-driven profit: ₹62.62 Cr of PBT came from revised cost and price estimates, flagged by the auditor. Future revisions could go the other way.
• Customer concentration: almost all revenue comes from the Navy and Coast Guard, so their budgets and payment schedules drive earnings.
• Shrinking treasury income: other income fell 18.05% as deposits were drawn down.
• Contingent liabilities of ₹7,959 Cr (Screener.in), about 3x net worth.
• Valuation: the stock trades at 9.8x book, and it fell 23.3% after the announcement even though results were strong.

• H1 FY27 operating cash flow: a return to positive would show the FY26 shortfall was timing.
• Receivable days: whether they come back down from 63.6 toward the FY25 level of 18.7.
• NGC contract signing: reported as L1. A signed contract would bring in fresh customer advances.
• FY27 interim dividend: announced alongside results in November or February, based on FY26 practice.
• Core EBITDA margin: whether 11.4% holds without further estimate revisions.
• Order-book replenishment above the ₹15,324 Cr level of March 2026.

The Garden Reach Shipbuilders & Engineers dividend is best described as a steady 30% of profit that grows with the business. It is not a high-yield income stream. Whether it suits you depends on your own goals. FY27 cash flow will show whether the FY26 cash gap was a one-off.

This article is for information and education only. It is not investment advice or a recommendation to buy, sell or hold any security. ShareBazaar Online is not registered with SEBI as an investment adviser or research analyst. Company figures come from GRSE's audited FY26 results filed on 28 April 2026. Market, peer and history data come from the third-party sources cited and may change. The record and ex-dates are based on third-party data and should be checked against official exchange circulars. Tax information is general and may not fit your situation. Consult a qualified professional before making financial decisions.