Tide of success: Shares of Cochin Shipyard soar to new heights; do you own it?

At the opening bell, Indian headline indices began the trading session on a bearish note, witnessing substantial declines in the utilities, power and fast-moving consumer goods sectors. Defence and shipbuilding stocks, notably Garden Reach Shipbuilders & Engineers Ltd and Mazagon Dock Shipbuilders Ltd, witnessed significant buying interest, while Cochin Shipyard Ltd took the lead as the top gainer in the BSE Smallcap pack.

On an intraday basis on Thursday, shares of Cochin Shipyard Ltd soared around 19%, reaching a 52-week high of Rs 1,136 per share on the BSE. The stock has been consistently hitting new 52-week highs and has generated exceptional returns, climbing 185% in the past year.

Recently, the company illuminated its performance, profitability, product portfolio expansion and expansion plans in its annual report, which appears to have garnered investor optimism, resulting in a surge in buying interest.

Considering the company’s quarterly performance, on a consolidated basis it reported a growth of 7.94% from Rs 440.85 crore registered in Q1FY23, recording total revenue of Rs 475.86 crore in Q1FY24. It has reported strong operating profit growth of 86.2%. Compared to the same quarter last year, the net profit for the first quarter of FY24 skyrocketed 133.88%, from Rs 42.18 crore to Rs 98.65 crore.

The company is currently in the process of executing two substantial expansion projects with a total cost of Rs 2,769 crore. These projects include the International Ship Repair Facility (ISRF) with an expenditure of Rs 970 crore and the construction of a new dry dock, which carries a cost of Rs 1,799 crore.

The company is steering towards a greener future and has secured numerous orders. In the financial year 2023, it secured a prestigious contract to build two state-of-the-art feeder container vessels that operate without emissions.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.