Cochin Shipyard, a zero-debt PSU company engaged in the defence and shipping sector, halted its back-to-back upper circuits party on November 29, by closing in red on BSE and NSE. However, despite this, Cochin shares skyrocketed by nearly 18% this week, extending its YTD performance and emerging among 2024 multibaggers. Cochin shares are up by more than 130% in 11 months. Does this mean, it's time to book profits or buy further?
Cochin Shipyard Share Price:
After market hours of November 29, Cochin share price ended at Rs 1576.95 apiece, marginally down on BSE. Its market cap stood at Rs 41,486.52 crore. Cochin had touched a back-to-back 5% upper circuit from November 25th to 28th, while its stock was on a gaining spree since November 22nd.
During this week's trading session, Cochin shares surged by 17.9% on the BSE. YTD, the stock is up by 131.38%.
The bullish trend in Cochin came after the company bagged massive orders. Cochin Shipyard Limited (CSL) has entered into a Memorandum of Understanding (MOU) with Seatrium Letourneau USA, Inc. (SLET) for the design and critical equipment for jack-up rigs for the Indian Market.
Further, building on CSL's extensive experience in ship construction and engineering and SLET's renowned technical expertise and design capabilities, this partnership aims to capitalize on opportunities for Mobile Offshore Drilling Units (MODUs) designed to meet the needs of the Indian market, the filing said.
The tie-up is seen in the Government's efforts under the "Make in India" initiative.
Should BUY OR SELL In Cochin?
As per the latest recommendation, Centrum said "With current order backlog of 5x FY25, we anticipate 17% CAGR earnings over FY24-FY26E. CSL witnessed a 61% correction in valuation and is currently trading at 1 Yr Fwd P/E of 30x. Considering, sharp moderation in valuation and healthy earnings, we value CSL at a P/E multiple of 37x on FY26E, assigning a BUY rating on the stock with a target price of Rs.1,557." This target is already met by Cochin earlier this week.
However, as per the consensus recommendation from 3 analysts for Cochin Shipyard Ltd. is HOLD. Now, the 1-year average target price in Cochin is of Rs 1,328, hinting at a nearly 16% potential correction ahead.
YTD, the stock has rewarded investors with a 1:2 stock split and up to Rs 9.75 dividends in three ranges.
Cochin is going to deliver an interim dividend of Rs 4 per share and for this, it turned ex-date on November 19, 2024. Earlier, the company also delivered dividend final dividend of Rs 2.25 per share and an interim dividend of Rs 3.50 per share for FY24, and their ex-dates were on September 23 and February 12 of this year. Additionally, the stock was split by a 1:2 ratio on January 10, 2024, where the face value of Rs 10 each is cut to Rs 5.
Cochin Shipyard was incorporated in the year 1972 as a fully owned Government of India company. In the last three decades the company has emerged as a forerunner in the Indian Shipbuilding & Ship repair industry. This yard can build and repair the largest vessels in India. In defensive role, these ships would be employed for Local Naval Defence operations and seaward defence of Offshore Development Area.
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