Share price rose over 3 per cent in morning trade on BSE on Wednesday, November 8, looking set to extend the gains into the third consecutive session, a day after the company reported its September quarter scorecard.
During market hours on Tuesday, November 7, Cochin Shipyard reported a 61 per cent year-on-year (YoY) jump in Q2FY24 consolidated net profit at ₹181.53 crore. In the same quarter last year, the company’s net profit was ₹112.79 crore.Revenue from operations for the quarter rose 48 per cent YoY to ₹1,011.72 crore from ₹683.18 crore in the corresponding quarter last year.
Besides, the board of directors recommended an interim dividend of ₹8 per equity share of face value of ₹10.
Following the Q2 results announcement, the stock closed 3.69 per cent higher at ₹1,042 on BSE on November 7. On November 8, the stock opened at ₹1,065 against the previous close of ₹1,042 and rose 3.05 per cent to touch the intraday high of ₹1,073.80 in trade so far. The stock, however, cooled off later and traded 1.16 per cent higher at ₹1,054.05 around 11:25 am.
Cochin Shipyard share price has seen robust gains in the last few months. The stock hit its 52-week low of ₹411 on March 27 this year. As of the previous session’s close, the stock is up 154 per cent from its 52-week low level.
Kotak upgrades the stock
After the Q2 earnings, Kotak Institutional Equities upgraded the stock to a ‘reduce’ from a ‘sell’ with an increased target price of ₹1,030 from ₹990 earlier.
“Cochin Shipyard reported an all-around beat, as robust execution across shipbuilding and ship repair was aided by strong margin performance. It remains on track to achieve its 64 percent top-line growth guidance in FY24. While margins have a high variation across quarters, H1FY24 EBITDA margins came in at 19.8 percent, significantly ahead of the guided range of 14-15 percent,” said Kotak.
The brokerage firm has raised its FY24-26 estimates due to higher margins. “We raise our FY24-26 estimates by 10 per cent/3 per cent/4 percent, led largely by an increase in our margin estimates (we move closer to the high-end of the guided range of 14-15 per cent) and adjusted for higher other income. As a result, our fair value increases to ₹1,030 from ₹990. We upgrade the stock to ‘reduce’ from ‘sell’ after a 20 per cent correction from its recent high,” said Kotak.