Miniratna PSU Company Declares 1:2 Stock Split: Buy The Shares?

In the capital goods industry, Cochin Shipyard Ltd. is a mid-cap firm. As of Friday's closing session, its market value was Rs 16,493.85 Cr. With Miniratna classification from the Indian government, Cochin Shipyard is one of the top shipbuilding and repair yards in the country. Following the announcement of the record date for a 1:2 stock split by the business, Cochin Shipyard's shares closed higher by 0.57% at Rs 1253.90.

Cochin Shipyard Stock Split

"Pursuant to Regulation 42 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that, the Company has fixed Wednesday, January 10, 2024 as the Record Date for the purpose of determining the eligibility of shareholders for sub-division/ split of existing 1 (One) Equity Share of face value of Rs. 10/- (Rupees Ten Only) each fully paid up into 2 (Two) Equity Shares of face value of Rs. 5/- (Rupees Five Only) each fully paid up," said Cochin Shipyard in a stock exchange filing.

Cochin Shipyard Financials

The consolidated net profit of Cochin Shipyard for the September quarter was Rs 181.52.50 crore, up 61% year on year from Rs 112.79.45 crore in the same period the previous year. On a consolidated basis, revenue from operations jumped by 48% to Rs 1,011.71 crore from Rs 683.18 crore during Q2FY23. In comparison to the previous year, EBITDA increased by 41.2% to Rs 191.2 crore in Q2FY24, while the margin shrank by 80 basis points to 19% from 19.8% from the same quarter of FY23.

Cochin Shipyard Share Price Target

Mandar Bhojane-Equity Research Analyst at Choice Broking said, "The current trading price of COCHINSHIP is Rs 1255. The stock has recently broken out of the daily trend line with a significant increase in trading volume, indicating strong momentum in the stock. If the price manages to close above the Rs 1300 level, it may have the potential to reach short-term targets of Rs 1750. On the other hand, immediate support levels are located at Rs 1130 and Rs 1000. These levels can be considered as buy on dips opportunities."

"The Relative Strength Index (RSI) currently stands at 72.74 and is trending upward, indicating increasing buying momentum. Furthermore, the Stochastic Relative Strength Index (Stoch RSI) has recently experienced a positive crossover, moving out of the oversold region. These technical indicators, when considered together, suggest that COCHINSHIP has the potential to reach a target price of Rs 1750 in the near future," added the analyst.

"To prudently manage risk, it is advisable to set a stop-loss (SL) at Rs 1000. This precaution will help protect your investment in case of an unexpected market reversal. In summary, considering the technical analysis and the current market conditions, COCHINSHIP appears to present an appealing buying opportunity for those aiming for a Rs 1750 price target, provided that appropriate risk management measures are in place," further stated Mandar Bhojane.

Disclaimer

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