Shares of this large-cap company jumped around 3 percent in Monday’s trading session after receiving an international order worth Rs. 1,100 crores for the construction of 6,300 TDW Dry Cargo Vessels. In just six months, the stock has delivered a multi-bagger return of 231 percent to its shareholders.
Price Movement:
With a market capitalization of Rs. 59,317 crores, the shares of Cochin Shipyard Ltd started Monday’s trading session on a higher note at Rs. 2,273.95 compared to its previous close of Rs. 2,215.15. During the trading session, the shares hit a high of Rs. 2,310, gaining around 3 percent and are currently trading at Rs. 2,256 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that one of its wholly-owned subsidiary companies Udupi Cochin Shipyard Limited (UCSL) had entered into a contract with Wilson ASA, Norway for the design and construction of four 6,300 TDW Dry Cargo Vessels.
Additionally, an agreement has been reached for four more vessels of the same type, expected to be formally contracted by September 19, 2024. The overall project of 8 vessels is worth about Rs. 1,100 crores and is to be executed within September 2028.
Moreover, the defence company mentioned that this is a follow-up order in continuation of the contract awarded in June 2023 for the design and construction of six 3800 TDW Dry Cargo Vessels which are now at advanced levels of construction at the yard at Udupi, Karnataka.
Furthermore, the Vessels shall be designed by Conoship International, Netherlands and shall be constructed as environment-friendly diesel-electric vessels for the transport of general cargo in the coastal waters of Europe.
Financials:
Looking at the company’s financial statements, the revenue jumped by 22 percent from Rs. 1,056 crores during the December quarter to Rs. 1,286 crores in the March quarter. In addition, the net profits increased by 6 percent from Rs. 244 crores to Rs. 259 crores during the same period.
Order Book:
As of March 2024, Cochin Shipyard holds an order book totalling Rs. 22,000 crores. The majority of these orders, accounting for 73 percent, are from Defence projects, while 17 percent are from Commercial exports. The remaining 10 percent originate from Commercial Domestic projects and Subsidiaries.
Future Outlook:
The company is expecting a 20 to 25 percent increase in the top line for the financial year 24-25. Further, 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.
Company Profile:
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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