Cochin Shipyard - Gives 600% + Return In A Year

655% Returns in Year, multibagger PSU is expected to announce FY24 dividend & Q4 results shortly after stock hits 14% upper circuit over weeks ago. Prior to releasing its Q4FY24 results & FY24 dividend, Cochin Shipyard share price saw 14% increase in value on BSE.

What Is Cochin Shipyard?

Cochin Shipyard Limited (CSL), which was founded in 1972, is prominent player in building, maintenance, & refurbishment of all kinds of ships, as well as in yearly modernization & extending of their useful lives.

For its prestigious clients all around world, CSL has constructed & restored some of biggest ships. About 45 ships have been shipped by it to customers outside of India. Its experience has grown from building bulk carriers to smaller, technologically more sophisticated ships like Platform Supply Vessels & Anchor Handling Tug Supply Vessels.

Key Operations & Services Provided By Cochin Shipyard 

Operating segments for company are as follows: 

- Ship Building (72% in 9M FY24 versus 76% in FY23)- Produces passenger vessels, air defense ships, bulk carriers, product carriers, & tankers.

- Ship Repair: 28% in 9M FY24 compared to 24% in FY23Since its founding in 1982, company has upgraded & repaired many kinds of ships, including those used in oil exploration sector.

- Green Vessels: company is developing zero-emission green vessels, such as H2 Fuel Cell Vessel, which should be finished by February 2024, & Electric Catamaran Ferry, which should be finished by November 24.

Cochin Shipyard Historical Stock Performance 

This year, investors have received multibagger gains from this stock. This year, counter has already increased by more than 180%. stock has increased 697 percent in year & more than 1085 percent in two years. Cochin Shipyards returned 49.32% during last month, compared to 1.73 & 1.78 percent for Nifty 50 & Sensex, respectively. Over past year, Cochin Shipyards has returned whopping 505.36% to investors, compared to returns of 23.76% & 19.8% for Nifty 50 & Sensex, respectively.

Factors Contributing To 600%+ Return

1. Ocean Sparkle Limited (OSL), Adani Harbor Services Limited Company, has placed order with Udupi Cochin Shipyard Limited (UCSL), wholly owned subsidiary of Cochin Shipyard Limited (CSL).
2. Contract is for building of three 70 T Bollard Pull Power ASD (Azimuthing Stern Drive) tugs.
3. Two 62 T bollard pull ASD tugs were previously contracted by UCSL to be built for OSL. According to firm, OSL has deployed both of these tugs at Paradeep Port & New Mangalore Port after UCSL delivered them ahead of schedule.

What Were Major Contracts Or Projects That Influenced Financial Performance?

- Agreed to design & build hybrid service operation vessel (Hybrid SOV), with delivery anticipated in 2026, under contract with European customer.

- Acquired second contract for more hybrid SOVs from same client.

- Wholly-owned subsidiary UCSL obtained orders for Ocean Sparkle Limited & Polestar Maritime Limited for Bollard Pull Tugs.

- HCSL obtained order for Industrial Handling Private Limited's ASD tugs.

Risk Factors Associated With Investing In Cochin Shipyard

- Moderate concentration of order books; 

- Stock is trading at multiple of 10.0 times its book value.

- Over last five years, company's revenue growth has been subpar, at 4.21%.

- company's three-year return on equity is pitiful 12.7%.

- Included in earnings is additional Rs. 307 Cr.

Cochin Shipyard’S Future Growth Plans

-By August 2024, new shipbuilding & ship repair facility should be completely operating.
- Making minimal additions to labor & overhead expenditures by utilizing current facilities.
-In order to improve turnaround times & operational efficiency, ISRF is looking for worldwide operating partner.

Conclusion

Good prognosis for shipbuilding & ship repair industries, with substantial development anticipated. Using strategic approach to project selection & execution can help you retain caution while optimizing value. sustained emphasis on efficiency, innovation, & teamwork to promote long-term expansion in marine sector.