Shares of this midcap company surged 7 percent in Monday’s trading session after signing a repair agreement with US Navy. The shares have delivered a multibagger return of 123 percent to its shareholders in just six months.
With a market capitalization of Rs. 30,492 crores, the shares of Cochin Shipyard Ltd (CSL) started Monday’s trading session on a higher note at Rs. 1,105.05 compared to its previous close of Rs. 1,081.20. During the trading session, the shares hit a high of Rs. 1,170.90, gaining around 7 percent, also recorded as the company’s fresh 52-week high and are currently trading at Rs. 1,151 apiece.
Such a bullish movement in the share price was observed after the company in an exchange filing announced that they had signed the Master Shipyard Repair Agreement (MSRA) with the United States Navy. The MSRA is a non-financial agreement and will facilitate the repair of US Naval vessels under the Military Sealift Command in CSL.
Furthermore, Cochin Shipyard Ltd has been qualified to enter into the MSRA after the US Navy –Military Sealift Command conducted a detailed evaluation process and capability assessment.
Coming onto the company’s financial statements, the revenue increased by 4.3 percent from Rs. 1,012 crores during the September quarter to Rs. 1,056 crores in the December quarter. In addition, the net profits zoomed by 34 percent from Rs. 182 crores to Rs. 244 crores during the same period.
Earlier, in February, the defence company signed a contract with the Indian Navy for undertaking medium refits of two naval vessels. The contract was received for dry-docking and refit as well as the upgradation of equipment on board the ships worth Rs 150 crores.
As of February 2024, the total order book of Cochin Shipyard is estimated at around Rs. 21,000 crores. The order book includes shipbuilding orders from internationally renowned companies from Europe and the Middle East and has a strong pipeline of projects in the coming two to three years from the Indian Navy and other customers.
Additionally, Cochin Shipyard is working on significant naval projects like anti-submarine warfare shallow-water craft corvettes and next-generation missile vehicles. These projects are expected to contribute substantially to the defence order book over the next five years.
Moreover, the company has also allocated approximately Rs 1,800 crores for constructing a dry dock capable of handling large vessels. This project is set to be completed by December of FY24, enhancing the company’s capabilities.
Headquartered in Kerala, Cochin Shipyard was incorporated in 1972. The company is a leading player in the construction of all kinds of vessels, repairs and refits of all types of vessels including periodic upgradation and life extension of ships.
Written By Vaibhav Patil
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