Mumbai: Defence PSU Cochin Shipyard Ltd (CSL)’s shares have surged nearly 7% due to heavy trading volumens and renewed market optimism. Cochin Shipyard has been in the spotlight for quite some time now, as reports of the company’s partnerships with leading maritime companies have been doing their rounds. Drydocks World, a leading service provider for offshore oil and gas and renewable energy, had signed a Memorandum of Understanding (MoU) with CSL to enable development of ship repair clusters.
Cochin Shipyard has emerged as one of the top performing stocks on the bourses, offering more than 700% returns in just two years. Analysts across the board are bullish on the stock’s prospects, with an expectation of a significant YoY growth in revenues and profitability over the next 2-3 years, especially with incremental profits in the ship-repair segment.
Cochin Shipyard’s Q4 results have raised some question even with a 37% YoY rise in revenue and a corresponding 11% rise in net profit. The company’s EBITDA has declined 7.6% YoY as cost overruns can significantly impact profitability.
Defence stocks are witnessing a broader rally, partly due to being thrust into the spotlight during Operation Sindoor. The government’s Aatmanirbhar Bharat initiative has also boosted interest in defence stocks, as they invest in R&D and strategic partnerships to boost domestic defence manufacturing.
