Cochin Shipyard shares hit the upper circuit for the fourth consecutive trading session in the morning trade on Thursday, climbing over 20 percent in the past week.
The public sector enterprise, India's largest shipyard by capacity, has gained traction in both commercial and defence sectors, boosting investor confidence.
The stock surged 5 percent in morning trade on the National Stock Exchange (NSE) to reach Rs 1,579.25 apiece, the highest permissible limit for the day. By 12:20 PM, the scrip was trading at Rs Rs 1,575.90, up 4.78 percent.
This recent rally comes after the stock saw a significant correction, dropping nearly 50 percent from its peak of Rs 2,979.45, recorded on July 8, 2024. Over the past week, Cochin Shipyard has jumped 21.79 percent, outperforming the benchmark Sensex, which gained 3.07 percent during the same period.
Manish Chowdhury, Head of Research at StoxBox, attributed the uptrend to strong fundamentals and strategic initiatives, projecting a further upside of 15-18 percent over the next year. The company’s market capitalisation has risen to Rs 41,514.15 crore.
Cochin Shipyard boasts a robust order book, driven by a diverse portfolio that includes defence, commercial, and export projects. Its capabilities span shipbuilding, repairs, and defence-related manufacturing, ensuring a steady stream of revenue.
The recent announcement by the defence secretary to increase local defence spending from 60 percent to 75 percent is seen as a major catalyst for the sector. India is expected to allocate $20-25 billion annually to bolster domestic defence capabilities, creating opportunities for key players like Cochin Shipyard.
The company recently signed a Memorandum of Understanding (MoU) with Seatrium Letourneau USA, Inc. (SLET). The partnership focuses on designing and supplying critical equipment for jack-up rigs tailored for the Indian market, aligning with the government’s Make in India initiative.
“This collaboration underscores Cochin Shipyard's role in strengthening India's manufacturing ecosystem while enhancing its financial performance,” said Chowdhury. “With these strategic initiatives and robust government support, the company is well-positioned to deliver long-term growth and remains a compelling investment option,” he added.
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