November 8 – Shares of Cochin Shipyard Ltd may see a modest movement today following the company’s Q2 earnings report and announcement of an interim dividend for FY 2024-25. The stock currently Trading at at Rs 1,474.00 or down by 3.2% at 09:28 am IST, after a gap down opening on the NSE.
Strong Earnings Growth in Q2
For the quarter ending September 30, 2024, Cochin Shipyard reported a 4% increase in net profit, reaching Rs 189 crore compared to Rs 182 crore in the same quarter of the previous fiscal year.
Revenue also saw a 13% growth, rising to Rs 1,143.2 crore from Rs 1,011.7 crore in Q2 of FY 2023-24.
The company’s EBITDA for the quarter stood at Rs 197.3 crore, a 3.2% increase from Rs 191.2 crore in the prior year.
However, EBITDA margins experienced a slight decline, standing at 17.3%, down from 18.9% in the corresponding quarter of the previous fiscal year.
This minor decrease in margins may warrant attention from analysts, though the overall growth in revenue and profit suggests continued positive momentum.
Dividend Declaration
Reflecting its strong financial position, Cochin Shipyard’s Board of Directors declared an interim dividend of Rs 4 per equity share for the financial year 2024-25.
The dividend represents 80% of the paid-up value, with the Record Date for eligibility set for November 20, 2024. Shareholders are expected to receive payments on or before December 6, 2024.
This dividend payout underscores the company’s stable cash flow and profitability, offering tangible benefits to shareholders in line with the company’s commitment to rewarding its investors.
Fundraising for Strategic Expansion
In addition to its earnings report, Cochin Shipyard also announced plans to raise up to $50 million through the issuance of US dollar-denominated non-convertible senior unsecured fixed-rate notes.
This fundraising initiative aims to support the company’s expansion and modernization plans, strengthening its position in the shipbuilding and repair sector. The notes may be issued in one or multiple tranches, depending on market conditions.
A Strong Track Record
Founded in 1972, Cochin Shipyard has established itself as a leading player in India’s shipbuilding and repair industry. The company’s extensive facilities are capable of building ships up to 1.1 million tonnes and repairing vessels weighing up to 1.25 million tonnes.
These capabilities position Cochin Shipyard as one of India’s foremost maritime companies, catering to both domestic and international markets.
In line with its long-term growth strategy, Cochin Shipyard has received support from the Government of India for continued expansion.
The company’s IPO, announced in August 2012, remains a key initiative in its ongoing efforts to scale its operations and modernize its facilities.
The public offering is expected to contribute to the company’s future growth, with Cochin Shipyard continuing to focus on strengthening its capabilities in the defense and maritime sectors.
Dividend History and Payouts
Cochin Shipyard has consistently rewarded its shareholders with attractive dividends. In addition to the interim dividend for FY 2024-25, the company’s recent dividend payouts include Rs 3.50 per share in February 2024 and Rs 2.25 per share in September 2024.
Earlier payouts included Rs 8.00 per share in November 2023 and Rs 3.00 per share in September 2023. These regular dividends reflect Cochin Shipyard’s commitment to maintaining shareholder value.
Stock Market Reaction
Despite the positive performance in its Q2 results, Cochin Shipyard’s stock experienced a minor decline of 0.50% during today’s trading session, closing at Rs 1,525.65 on the BSE.
The company’s market capitalization stood at Rs 40,136 crore, indicating its significant presence in the market. Approximately 0.24 lakh shares were traded, resulting in a turnover of Rs 3.61 crore.
This slight dip in share price could be attributed to broader market movements or investor focus on future growth prospects following the company’s earnings report.
Technical Outlook for Cochin Shipyard
Cochin Shipyard’s shares opened lower today and are currently trading at Rs 1,474, signaling cautious market sentiment. Below is an analysis of the stock’s technical positioning, highlighting potential support and resistance levels:
Monthly Pivot Levels
- The pivot point (P) is at Rs 1,524, currently acting as a key resistance level.
- The first resistance (R1) is positioned at Rs 1,708, with a secondary resistance (R2) at Rs 1,919, which could be relevant if the stock experiences upward movement.
- On the downside, the first support (S1) is at Rs 1,312, followed by a secondary support (S2) at Rs 1,128. These levels might provide support if market sentiment remains subdued.
Simple Moving Averages (SMA)
- The 5-day SMA at Rs 1,507 represents a short-term resistance level, with the stock trading just below it.
- The 10-day SMA at Rs 1,479 also marks a short-term resistance.
- The 20-day SMA, at Rs 1,499, suggests moderate bearish pressure over the recent period.
- A more distant 50-day SMA at Rs 1,658 indicates a gradual downward trend over the past two months.
- The 100-day SMA, at Rs 2,027, further supports an overall downward trend, underscoring the gap between current price levels and historical performance.
Relative Strength Index (RSI)
- The daily RSI stands at 41.49, a level that points to a neutral-to-oversold status. While not in oversold territory, the RSI suggests potential for upside if buying interest surfaces near support zones.
Cochin Shipyard’s technical indicators suggest mild bearish sentiment in the short term. The next level to watch could be the 5-day SMA at Rs 1,507. Movement above the monthly pivot at Rs 1,524 may indicate possible recovery, while a move below Rs 1,312 might imply further testing of lower support zones.
Disclaimer – This technical analysis is provided for informational purposes only and does not constitute financial advice. Investors should consider multiple factors and consult with a financial advisor before making investment decisions.
About Cochin Shipyard
Cochin Shipyard Ltd is a key player in India’s shipbuilding and repair sector, specializing in the construction of vessels and the repair and upgrade of ships.
The company is also involved in periodic layup repairs and life extension services for ships. Cochin Shipyard’s ongoing efforts to expand its facilities, modernize operations, and raise capital reflect its commitment to strengthening its competitive position in the maritime industry.
Disclaimer – The information provided in this article is for informational purposes only and should not be considered as financial, investment, or trading advice. MarketScope Daily and its contributors do not guarantee the accuracy, completeness, or timeliness of the information presented. Readers are encouraged to conduct their own research and consult with qualified financial professionals before making any investment decisions. The views expressed in this article are those of the author and do not necessarily reflect the opinions of MarketScope Daily. Past performance is not indicative of future results, and investing in financial markets carries inherent risks.
