Subscribe to Cochin Shipyard: Way2wealth
Way2wealth has come out with its report on Cochin Shipyard. The research firm has recommended to “Subscribe ” the IPO in its research report as on August 01, 2017
Cochin Shipyard Ltd. (CSL) is the largest public sector shipyard in India in terms of dock capacity, as on March 31, 2015.CSL is primarily engaged in the business of shipbuilding and ship repair. It also offers services in respect of marine engineering training apart from shipbuilding and ship
repair. CSL caters to clients engaged in the defence sector in India and commercial sector worldwide. CSL has two docks- dock number one, primarily used for ship repair (Ship Repair Dock) and dock number two, primarily used for shipbuilding (Shipbuilding Dock). The Ship Repair Dock is one of the largest in India with a maximum capacity of 125,000 DWT. The Shipbuilding Dock can accommodate vessels with a maximum capacity of 110,000 DWT.Over FY15-17, CSL has reported 14.1% and 112.3% Sales and PAT CAGR respectively. The Company has achieved ROE of 16.2% in FY17. At upper band of offer price `432, the issue is being offered at a P/E multiple of 18.8xFY17 earnings and PB of multiple of 2.9xFY17 Book value. We believe issue is being offered at reasonable valuations given a) its strong
execution capability and track record b) healthy order book (`33bn 1.6xFY17 sales) c) Net debt free – Cash rich balance sheet. We advise investors to SUBSCRIBE to the issue.
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