Kotak Equities Sees 39% Downside in Cochin Shipyard Shares, Raises Price Target
10th Feb 2025
Kotak Equities' Bearish Outlook on Cochin Shipyard
Shares of Cochin Shipyard Ltd are set for a 39% correction from the current levels, said Kotak Institutional Equities citing lack of major defence orders in the last two years. Assigning a sell call to the defence sector stock, the brokerage raised its price target to Rs 830 from the earlier Rs 800. This stance of the brokerage comes after the defence major announced its Q3 earnings last week.
Cochin Shipyard's Recent Financial Performance
Net profit in Q3 declined 27.6% to Rs 177 crore, while revenue climbed 8.6% to Rs 1147.6 crore. Cochin Shipyard's EBITDA slipped 23.4% to Rs 237.4 crore in Q3. The board of directors declared a second interim dividend of Rs 3.50 per equity share. The multibagger stock has risen 54% in a year and 469.56% in two years.
Cochin Shipyard's Initiatives and Future Outlook
Cochin Shipyard's order inflow was primarily driven by small-sized commercial shipping and ship repair orders. It expects near-term pipeline to remain muted at Rs 7,800 crore, while the medium-term pipeline has been lowered to Rs 30,000 crore (from Rs 50,000 crore). The company is currently exploring initiatives like a potential partnership to make jack-up rigs, a ship repair facility in Kandla, and tie-ups with Korean firms to execute their orders.
Shares of Cochin Shipyard Ltd are set for a 39% correction from the current levels, said Kotak Institutional Equities citing lack of major defence orders in the last two years. Assigning a sell call to the defence sector stock, the brokerage raised its price target to Rs 830 from the earlier Rs 800. This stance of the brokerage comes after the defence major announced its Q3 earnings last week.
Cochin Shipyard's Recent Financial Performance
Net profit in Q3 declined 27.6% to Rs 177 crore, while revenue climbed 8.6% to Rs 1147.6 crore. Cochin Shipyard's EBITDA slipped 23.4% to Rs 237.4 crore in Q3. The board of directors declared a second interim dividend of Rs 3.50 per equity share. The multibagger stock has risen 54% in a year and 469.56% in two years.
Cochin Shipyard's Initiatives and Future Outlook
Cochin Shipyard's order inflow was primarily driven by small-sized commercial shipping and ship repair orders. It expects near-term pipeline to remain muted at Rs 7,800 crore, while the medium-term pipeline has been lowered to Rs 30,000 crore (from Rs 50,000 crore). The company is currently exploring initiatives like a potential partnership to make jack-up rigs, a ship repair facility in Kandla, and tie-ups with Korean firms to execute their orders.