News

Published: May 27, 2024
Updated: May 27, 2024

Cochin Shipyard Shares Surge 7% to New High Ahead of Q4 Results

Strong Market Performance

Cochin Shipyard Ltd shares experienced a significant surge in trading on Friday, rising by 7.38% to reach a 52-week high of Rs 2,034. This bullish trend comes as the company is set to announce its fourth-quarter (Q4 FY24) results later in the day. Investors are keenly awaiting the results, which will include the consideration of a final dividend recommendation for FY24.

New Order Boost

Earlier this month, Cochin Shipyard announced that it had secured a substantial order from a European client. The order involves the design and construction of a Hybrid Service Operation Vessel (Hybrid SOV), with an option for two additional vessels. This project, classified as a large order valued between Rs 500 crore and Rs 1,000 crore, has significantly boosted investor confidence. The vessels will feature hybrid battery systems to enhance energy efficiency and reduce carbon footprints, catering to the offshore wind farm industry's operational needs in Europe. The project is slated for completion by the end of 2026.

Technical Indicators

On the technical front, Cochin Shipyard's stock is performing robustly. The stock is trading above its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day simple moving averages (SMAs). The 14-day relative strength index (RSI) stands at 86.36, indicating an overbought condition as it exceeds the typical threshold of 70.

Valuation Metrics

In terms of valuation, Cochin Shipyard's stock has a price-to-earnings (P/E) ratio of 44.30 and a price-to-book (P/B) value of 5.60. The company has an earnings per share (EPS) of 45.29 and a return on equity (ROE) of 12.64%. These metrics highlight the stock's current market valuation and profitability.

Analysts' Insights

Market analysts have positive outlooks for Cochin Shipyard's stock. Shiju Koothupalakkal, a Technical Research Analyst at Prabhudas Lilladher, noted that the stock has shown a strong uptrend in the past two weeks and suggested that the next target could be Rs 2,200, with support at Rs 1,710. Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, predicted an upside target of Rs 2,050 in the near term, advising a stop loss at Rs 1,750.

Promoter Holdings

As of March 2024, promoters held a 72.86% stake in Cochin Shipyard, reflecting strong promoter confidence in the company's future prospects.

Cochin Shipyard's recent market performance and substantial new order highlight the company's robust growth potential. Investors and analysts alike are optimistic about its future, supported by strong technical indicators and strategic project acquisitions. As the company prepares to release its Q4 results and consider a final dividend, market watchers will be keen to see how these developments unfold.