Multibagger Miniratna PSU engaged in shipbuilding, ship servicing jumped 12 percent over the last 5 trading days as Hon’ble Prime Minister of India, Shri Narendra Modi, inaugurated the new facilities of Cochin Shipyard Limited to expand and strengthen India’s fleet capacity.
The shares of Cochin Shipyard Limited were trading at Rs. 859.75, up 1.25 percent from its previous day’s close of Rs. 849.10 and its market capitalization is Rs. 22,494 Crores.
On January 17, 2024, the Hon’ble Prime Minister of India, Shri Narendra Modi, in a function held at ISRF, Kochi, inaugurated the new dry dock facility and an international ship repair facility of Cochin Shipyard Limited(CSL).
The New Dry Dock is set up at the existing premises of CSL, Kochi with an investment of Rs. 1,799 Crores, it features heavy ground loading which will position India with advanced capabilities to handle strategic assets like future aircraft carriers up to 70,000T displacement as also large commercial vessels including Capesize & Suezmax vessels, Jack-up rigs, LNG vessels, etc., thus eliminating India’s dependency on foreign nations for emergency national requirements.
The International Ship Repair facility is set up on 42 acres with an investment of Rs. 970 Crores. It is equipped with a ship lift system having a capacity of 6,000T, a transfer system, six workstations, and a berth of approximately 1,400 meters which can accommodate 7 vessels of 130 meters in length simultaneously.
The International Ship Repair facility is expected to modernize and expand the existing ship repair capabilities of CSL and aspires to transform Kochi into a global ship repair hub.
Cochin Shipyard Limited is engaged in shipbuilding, ship servicing/repair, marine engineering, and providing training, strategic, and advanced solutions.
It has a global presence and has delivered its vessels to various countries like USA, Germany, Netherlands, Norway, Denmark, and the Middle East.
The Key Shipbuilding clients of the Cochin shipyard on the domestic front include the Indian Navy, the Indian Coast Guard, the Ministry of Home Affairs, the Shipping Corporation of India Limited, Lakshadweep Government, various Port Trusts, and many more.
As of Q2FY24, it generated 73.60 percent of its revenue from Shipbuilding and 26.40 percent from providing ship repair services. It has a strong shipbuilding order book worth ~Rs. 22,000 Crores and Ship repair orders worth Rs. 700 Crores.
Its revenue from operations declined by 25.9 percent from Rs. 3,190.95 Crores in FY22 to Rs. 2,364.55 Crores in FY23, accompanied by profits of Rs. 563.96 Crores to Rs. 304.71 Crores.
It has reported a return on equity (ROE) of 6.57 percent and a return on capital employed (ROCE) of 8.66 percent, it is making decent returns on its equity and capital employed.
According to the latest shareholding data available for the December 2023 quarter, the company’s Promoters hold 72.86 percent stake, the Domestic Institutional Investors hold 2.22 percent and the Foreign Institutional Investors (FII) hold 5.81 percent.
Written by: Bharath K.S
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