The shares of the leading shipbuilding company fell up to 5 percent from an intraday low of Rs 1,590 apiece after the government intended to sell 5 percent through an offer for sale.
The shares of Cochin Shipyard Ltd were trading at Rs 1,605.00 per share, decreasing around 4.01 percent as compared to the previous closing price of Rs 1,672 apiece. The company has a market capitalization of Rs 42,303.39 crore.
Reason for fall:-
The shares of the company have seen bearish movement after the government intended to sell 5 percent of Cochin Shipyard Ltd through an offer for sale at a floor price of Rs 1,540 per share. The OFS will open today and will include the base offer of 66 lakh equity shares which is equivalent 2.5 percent stake in the company and also has a green shoes option for another 2.5 percent. This offer for sale is priced at a 48 percent discount from its 52-week high.
Financial Growth:-
Analysis of the company’s financial performance, revenue magnified by 60 percent from Rs 444 crore in Q1FY24 to Rs 710 crore in Q1FY25, however during the same time frame, net profit zoomed by 66 percent from Rs 109 crore to 181 crore.
New orders and order book:-
The company signed a contract with a European client to design and build Hybrid Service Operation Vessels (SOVs), with delivery in 2026, and secured additional SOV orders from the same client. Its subsidiaries, UCSL and HCSL, also won orders for Bollard Pull Tugs and ASD Tugs from various clients.
The company expects a 20-25% top-line growth for FY ’24-’25, despite higher depreciation from the ISRF and new dry dock projects. It aims for sustainable EBITDA levels and maintains a strong order book with around INR 22,500 crores of unexecuted orders, ensuring future revenue stability.
Growth & operational expansion:-
The company is focusing on sustainable growth, expecting green vessel orders from Europe and green tug orders from India. It aims to create long-term value for shareholders through R&D initiatives and IP protection via the CSL Strategic & Advanced Solutions division.
Operational expansion plans include a new shipbuilding and ship repair facility, expected to be fully functional by August 2024. The company plans to leverage existing infrastructure to minimize labor and overhead costs while seeking a global partner for the ISRF to improve efficiency and turnaround times.
Industry outlook:-
The shipbuilding and repair industry has a positive growth outlook, with the company focusing on strategic project selection and execution to maximize value. Emphasizing innovation, efficiency, and collaboration, the company aims to drive sustainable growth and maintain a competitive edge in the maritime sector.
Remarkable return:-
The stock has given a return of 23.78 percent in 6 months and a multi-bagger return of 154.50 percent in a year. If an individual invested Rs 1 lakh a year ago, it would be worth now Rs 2.54 lakh.
Company profile:-
Cochin Shipyard Limited is an India-based company that is engaged in the shipbuilding and ship repair business. The Company is engaged in the construction of vessels and repairs and refits of all types of vessels including upgradation of ships periodical layup repairs and life extension of ships.
Written by:- Abhishek Singh
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