ICICI Direct Initiates Buy On Defence Stock, Board Recommends Dividend, Soars 118.68% In 3 Yrs

ICICI Direct has come up with a Buy rating on Cochin Shipyard Ltd. for a target price of Rs. 498.80/share. The brokerage sees a potential upside of 17% from its current level considering its current market price and the target price. It is a mid-cap Defense sector PSU stock with a market capitalisation of Rs. 6,561.23 crore.

Dividend

According to the regulatory filing by the Board of Directors of Cochin Shipyard Ltd., "In accordance with Regulation 30 read with Part A of Schedule III and Regulation 43 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations), it is further notified that the Board has recommended a final dividend of Rs. 3.00 per share for the financial year 2022-23 subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company. The final dividend would be paid within 30 days from the date of its declaration at the AGM."

Q4FY23 Results

According to the brokerage, Below expected performance in the ship-building segment. Revenue came in at Rs. 600.1 crore (down 50.5% YoY). Both segments, shipbuilding and ship-repair, witnessed a decline in revenues. Gross margin was at 13.2% (2385 bps down YoY). At the EBITDA level, the company reported a loss of Rs. 67.1 crore against positive EBITDA of Rs. 296.3 core in Q4FY22. Adjusted PAT was at -Rs. 22.5 crore against Rs. 274.6 crore in Q4FY22 and Rs. 110.4 crore in Q3FY23.

Buy For a Target Price of Rs. 580/Share

According to the brokerage, Execution is expected to improve significantly over FY24-25E, which would drive revenues. Margins are also expected to improve led by improving performance in the ship repair segment and operating leverage benefits. "We maintain our BUY rating on the stock. We value CSL at Rs. 580 i.e. 15x P/E (FY25E EPS)," the brokerage firm.

Stock Outlook - Current Market Price, 52 Week High/Low, & Return

The last traded share price of Cochin Shipyard is Rs. 498.80/share, up 0.48% from its previous close of Rs. 496.40/share. Its 52 week high is Rs. 687/share and its 52-week low is Rs. 297/share, respectively.

The stock surged 5.47% in the past 1 week, however, it fell 0.91% in the past 1 month. It gave 52.33% positive return in the past 1 year. In the past 3 years, it gave 118.68% positive return. It jumped 0.09% in 5 years.

About - Cochin Shipyard Ltd. (CSL)

Cochin Shipyard (CSL) was incorporated in 1972 as a Government of India company, with the first phase of facilities coming online in 1982. CSL is the largest shipbuilding and maintenance facility in India. The yard has facilities to build vessels up to 1.1 lakh tonnes (lt) and repair vessels up to 1.25 litre annually. CSL has secured shipbuilding orders from internationally renowned companies from Europe and the Middle East in the recent past.

Disclaimer - The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.