News

Published: December 21, 2023
Updated: December 21, 2023

Cochin Shipyard Secures Rs 488-Crore Defence Contract Amidst Market Fluctuations

Shares of Cochin Shipyard Ltd have garnered attention as the PSU defence firm successfully clinched a contract worth Rs 488.25 crore with the Ministry of Defence (MoD). Despite a dip in stock prices during a market downturn, the company remains resilient.

Contract Details:

The contract encompasses repair and maintenance of equipment and systems onboard a naval vessel. Initiated during Q2 of FY24 following MoD's Approval of Necessity (AoN), the project is slated for completion by Q1 of FY25, as per the company's statement to bourses.

Market Performance:

On the recent trading day, Cochin Shipyard shares closed at Rs 1223.95 on the BSE, experiencing an intraday low of Rs 1201.20 during the market downturn. The stock had opened higher at Rs 1316.10. Despite this, the company's market cap fell to Rs 16,099 crore, with 1.30 lakh shares changing hands.

Technical Indicators:

From a technical standpoint, Cochin Shipyard's stock exhibits a relative strength index (RSI) of 54.9, indicating a balanced position without being overbought or oversold. The one-year beta of 0.3 reflects low volatility during the period. The shares are trading above the 20-day, 50-day, 100-day, and 200-day moving averages.

Financial Highlights:

Cochin Shipyard's consolidated net profit for Q2 FY24 surged by 61% to Rs 181.52 crore, compared to Rs 112.79 crore in the same quarter last year. Consolidated revenue witnessed a substantial 48% increase to Rs 1,011.71 crore. The board's approval of an interim dividend of Rs 8 per share for the financial year 2023-2024 and a share split further underlines the company's financial strength.

In the face of market challenges, Cochin Shipyard's recent contract with the MoD and robust financial performance showcase the company's resilience. As it navigates the repair and maintenance project for the naval vessel, investors remain optimistic about the firm's future prospects.