Within just one year, the share price of India’s state-owned shipyard Cochin Shipyard, whose main business includes building new ships as well as repairing and refitting old ones, has soared.
In just 1 year, Cochin Shipyard’s share price has risen nearly 298%, Trendlyne data shows. On Friday’s session, Cochin Shipyard share worth ended 0.59% greater at ₹901.65 apiece on BSE. Cochin Shipyard’s share price has risen 39% in the last three months and almost 80% in the last six months.
Securities dealer ICICI Direct Research has rated the shares of Cochin Shipyard as ‘purchase’ with a target price of Rs 1,055. ICICI Direct Research’s investment rationale is based on factors such as Cochin Shipyard’s outstanding capabilities in shipbuilding and ship repairing; increase in orders on hand, etc. The brokerage said, “Valuations look attractive considering multiple growth drivers. We value Cochin Shipyard at Rs 1,055 i.e. 36x FY26E P/E,.”
The brokerage famous in its evaluation that Cochin Shipyard is expert at finishing up quite a lot of tasks in each these sectors due to its cutting-edge, state-of-the-art infrastructure, which has a capability of as much as 110000 DWT in shipbuilding and as much as 125000 DWT in ship restore. The firm’s capabilities have tremendously enhanced with the commissioning of the International Ship Repair Facility (ISRF) and a brand new dry dock facility. With a pick-up in execution and an order backlog of over ₹22,300 crore as of December 23, there may be good income development outlook.
The brokerage additionally emphasised that there’s nonetheless a sturdy order pipeline in the business and defence shipbuilding and ship restore industries, together with exports. There are already contracts price over ₹9,000 crore for the development of ships, and tenders are anticipated to be launched in the medium future. The administration claims that contracts price ₹84,000 crore at the moment are in the request for proposals (RFP) stage. Within the defence business, the brokerage feels that Cochin Shipyard has an excellent future forward of it with the India Navy’s deliberate vessel acquisition.
“Over FY24–26E, we count on that Cochin Shipyard will see notable YoY development in revenues and profitability, pushed by a pick-up in execution in each classes and a rise in the share of the margin-accretive ship-repair section. In distinction to the de-growth seen over FY20–23, we venture income and revenue after tax (PAT) to develop at round 23% and roughly 36% CAGR, respectively, over FY23–26E,” ICICI Direct Research stated in its report.
Previous news, Cochin Shipyard new shipyard and international ship repair center was officially inaugurated on January 17 this year, India’s prime minister Narendra Modi was present to participate in the unveiling ceremony.
As India’s largest ship repair facility, the Cochin Shipyard previously had a maximum dock size of 255x43x9 meters, with two gantry cranes of 300 tons and 150 tons, capable of building ships of up to 110,000 dwt. The new dock is of stepped type with 310 meters long, 75/60 meters wide, 13 meters deep, with a draft of 9.5 meters, at a cost of Rs. 18 billion (about $216 million). The new dock will be fitted with a 600-ton Goliath gantry crane, which will greatly enhance the construction capacity of Cochin Shipyard. With a design life of 100 years, the new dock will enable India to build large aircraft carriers with a displacement of up to 70,000 tons.
The international ship repair center, at a cost of about Rs. 9.7 billion (about Rs. 840 million), has a 6,000-ton shiplift, a transfer system, six workstations and about 1,400 meters of berths, and will be able to accommodate the repair of seven 130-meter-long ships at the same time. Cochin Shipyard said the new ship repair facility is a modernization and expansion of the Cochin Shipyard’s existing ship repair capabilities and is “a step towards transforming the Cochin Shipyard into a global ship repair center”, which will increase India’s ship repair capabilities by about 25%. The shipyard has set a target of doubling its turnover in four years.