Shares of Cochin Shipyard rallied 6.6% to ₹473.60 in Monday's trade after the company, in an exchange filing, said that it received an order from Netherlands based Samskip Group.
The order is for designing and building two zero-emission feeder container vessels, with a provision for an additional two vessels. The total project cost for the order is approximately ₹550 crore, with the first vessel is to be delivered in 28 months and the second within 34 months.
These ships can carry about 365 numbers of 45-feet long high-cube containers and are intended to serve the European market, where sustainable transportation solutions are in high demand, the company said.
Earlier on November 09, 2022, the company received an order worth about ₹1,000 crore from a European client for the construction of 2 Commissioning Service Operation Vessels (CSOV) with an option to build 4 more of such vessels to be exercised by the owner within a year.
CSL has been active in the international shipbuilding arena for over two decades, having exported high-end vessels to countries such as Norway, the USA, Germany, the Netherlands, Denmark, and the Middle East.
Cochin Shipyard is a Miniratna-listed small-cap stock with a market capitalization of ₹6,133 crore. The company is mainly engaged in the construction of vessels and repairs and refits of all types of vessels, including the upgradation of ships, periodical lay-up repairs, and life extension of ships.
The stock witnessed a remarkable surge of almost 105% between August 2022 and December 2022, reaching its highest level of ₹687 apiece. This surge was fueled by the company's achievement of delivering India's first Indigenous Aircraft Carrier (INS Vikrant).
Despite the strong rally, the stock was unable to maintain its momentum in the current year and has lost almost 16.85% of its value so far. It is currently trading near its lowest level in the past five months.
In its FY22 annual report, the company stated that it had been successful in securing orders despite fierce competition. The company is also optimistic about garnering ship repair orders at its main facility in Kochi and its ship repair units in Mumbai, Kolkata, and Port Blair.
"With a large order book worth 20,000 crores, encouraging business opportunities in Europe, and improving ship repair business will allow us to grow consistently in the coming years," the company added.
On the fundamental side, the company reported a 14.72% fall in its consolidated profit to ₹110 crore in the quarter that ended December, compared to ₹129 crore in the corresponding quarter of the previous fiscal.
The revenue from operations fell sharply during the quarter to ₹664 crore from ₹1,015.9 crore in the year-ago period. The revenue from the shipbuilding segment fell 36.67% YoY to ₹461 crore, while revenue from the ship repair segment fell 19.64% YoY to ₹180 crore.
03 analysts polled by MintGenie on average have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.