Cochin Shipyard Share Price

Fundamental analysis of Cochin Shipyard Limited

A team of shipbuilding professionals spent a long time looking for the ideal location to begin a shipbuilding business in the country. They finally chose Cochin, and Cochin Shipyard Limited finally started in 1972.

Although it started as a ship-building company, it later expanded into ship repairs, marine engineering trading, and offshore upgrading to expand its operations and reach. After expanding its operations, it also began tying up with leaders in the Near East, Far East, Southeast, Europe, and the USA to further expand its operations.

It presently has a vast clientele in India and foreign, including ATCO, Saudi Arabia, Brage Supplier KS, Norway, Clipper Group, Denmark, Hellespont Steamship Corporation, Germany, etc.

In this article, we will examine Cochin Shipyard's share price and analyse its business model and industry to determine whether it is a suitable investment.

Cochin Shipyard Limited

Incorporated in 1972, Cochin Shipyard Limited, a government-owned company, has emerged as a leading ship repair and ship-building entity. It stands out as the first Greenfield and the most modern shipbuilding yard in India, renowned for its high-quality ships. Its diverse product range includes:

• Tankers
• Product carriers
• Bulk carriers
• Passenger Vessels
• High Bollard Pull Tugs
• Air Defence Ship

Its infrastructure combines economy, scale, and flexibility and aims to be outlined in offshore construction and future expansion. The Indian government has awarded it an excellent ranking as part of India’s top 10 public undertakings four times in a row. As a technology innovation company, CSL has also adopted the Japanese Integrated Hull Outfitting and Painting system (IHOP), which gives it an edge.

Is the shipping industry a goldmine investment?

With ships having a long life, investing in the shipping industry offers a potential for long-term investment and sustained revenue. Moreover, as a key aspect of global trade, the shipping industry is poised to benefit from increased foreign trade between countries. This sector's significance in the global economy presents an opportunity for individuals to invest in the prospect of global trade expansion.

In India, the government aims to focus on domestic shipbuilding and minimise import dependence, further strengthening its positioning. It is backed by government initiatives such as the ‘Make in India’ campaign and the ‘Sagarmala’ project.

Additionally, India aims to become a global hub for green ships through its ‘Green Tug Transition Programme’ (GTTP) and establish itself as a leader in the global shipbuilding market. This can make this industry a suitable opportunity for diversification.

Who are Cochin Shipyard’s competitors in the shipping industry?

Here are the competitors of Cochin Shipyard in the shipping industry:

• Mazagon Dock Shipbuilders
• Garden Reach Shipbuilders & Engineers
• VMS Industries
• A.P. Moller-Maersk Group
• Mediterranean Shipping Company (MSC)

History of Cochin Shipyard Limited

Here is a brief summary of the Cochin Shipyard company and how it progressed to become a leader in the industry over the years with an increasing Cochin Shipyard share price Rs. 2020+:

• Incorporation: The Cochin Shipyard company was conceived in 1965 when a team of shipbuilding professionals looked for a suitable location for the first Greenfield Shipbuilding Yard building in the country and picked up Cochin.
• First phase: The yard’s first phase was completed by 1982. It was designed and constructed with Mitsubishi Heavy Industries (M.H.I), Japan. The company's final legal incorporation was in 1972.
• Operations: The yard began shipbuilding operations in 1978, ship repair in 1981, Marine Engineering Training in 1993, and Offshore Upgrading in 1999. Its focus on productivity and steady aggressive marketing have been the reasons behind its success over the years.
• Technical adoption: The yard’s average construction time was reduced through the augmentation of facilities, the adoption of the Integrated Hull Outfitting and Painting system (IHOP) system of construction, and the upgradation of the ship design department with the installation of Tribon and CAD/CAM software.
• Ship repair: The Cochin Shipyard Limited began its ship repair operations in 1982 and repaired different vessel types, such as periodical lay-up repairs, upgradation of oil exploration industry ships, and life extension of Coast Guard, Port Trust, Navy, UTL, and Fisheries ships. With time, the yard has established expertise and resources for complicated repair jobs.
• Tie-ups: For the purpose of technology transfer and material packages, CSL has established several tie-ups with firms from the Near East, Far East, Southeast, Europe, and the USA.

Company profile of Cochin Shipyard Limited

Pros

• Exposure to global markets: The Cochin Shipyard is an established company that provides shipbuilding and repair services internationally. Investing in this company provides exposure to global trade and shipbuilding.
• Long-term potential: The Cochin Shipyard is a growing and emerging company with new tie-ups and collaborations to deliver better services and handle complex repair issues. Therefore, investing in the Cochin Shipyard has long-term potential and the ability to reach the Cochin Shipyard share price target of Rs. 3016+ by 2027. It also had a profit before tax of 34547.87 lakhs for the quarter ended March 2024.

Cons

• Cyclicity: The shipbuilding industry experiences boom and bust cycles, and Cochin Shipyard is no different. These investments are impacted by the same cyclical nature.
• Global Events: Global events, such as trade wars and political instability, impact international trade and thus return. For example, China’s share in U.S. imports declined by 8 percentage points because of trade tensions between the two countries.

The finances and the Cochin Shipyard share price forecast

Here’s a summary of Cochin Shipyard Limited’s financial information as of May 2024:

Shareholding pattern of Cochin Shipyard Ltd.

Here’s a concise summary of Cochin Shipyard Limited’s shareholding pattern as of March 2024 :

• Promoters: 72.86%
• Foreign Institutional Investors (FII): 5.23%
• Domestic Institutional Investors (DII): 2.46%
• Public: 19.46%

Peer multiple comparison

Let’s compare the Cochin shipyard share price with its peers, with complete data available. Here’s a concise table: