State-run Cochin Shipyard Ltd. shares have more than halved from their peak in July last year. Still, analysts at Kotak Institutional Equities believe the shipbuilder stock is not yet fully corrected. The firm expects stocks to plummet another 40% over the following year. The stock closed Thursday at ₹1411.45 on the NSE, down 1% from the previous close.
Kotak Institutional Equities has a “sell” rating on the company, with a lowered price objective of ₹830 from ₹800 before. The brokerage stated that Cochin Shipyard’s December quarter results were consistent with forecasts, with excellent performance in the ship repair segment offset by deterioration in shipbuilding. “After INS Vikrant, now INS Vikramaditya ship repair order will aid margins until Q1FY26,” the brokerage noted in an investment report.
Interestingly, the stock’s drop comes after a remarkable gain over the past two years. After more than tripling in 2023 and 2024, Cochin Shipyard’s stock has entered the new year with losses, down 8.3% since January. While Cochin Shipyard’s shares rose 127% in 2024, it increased by 153% the previous year. According to Kotak, the lack of big defense orders in the pipeline may limit the stock’s continued upward movement. Furthermore, media sources imply that postponing IAC-2 means a low likelihood of a big order win in the near term, which remains a serious issue.
Cochin Shipyard’s net profit fell by 28% to ₹177 crore in the December quarter, from ₹244 in the previous year. The company’s operating margin declined by 870 basis points (bps) to 20.7% in the third quarter of FY25. The company’s sales climbed by 8.6% to ₹1,148 crore from ₹1,056 crore in the previous year.
