Cochin Shipyard shares rise up to 7% as firm named lowest bidder for Rs 5,000-crore order; defence index up over 1%

Cochin Shipyard shares rise up to 7% as firm named lowest bidder for Rs 5,000-crore order; defence index up over 1%

• Cochin Shipyard named lowest bidder for Rs 5,000-cr Navy order
• Shares rose over 7% after four days of decline
• Defence stocks gain as Macron visits India for defence talks

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Shares of Cochin Shipyard rose over 7% to a high of Rs 1,574.50 apiece on the NSE on February 17 after the company was named the lowest bidder for an Rs 5,000-crore order from the Ministry of Defence. The order is to build five next-generation survey vessels for the Indian Navy. Shares of the company rose after falling for four days, during which they shed 4%.

The company expects the final announcement of the contract once a few formalities are done. For the quarter ended December, Cochin Shipyard reported a net profit of Rs 145 crore on revenue of Rs 1,350 crore. This contract's value is almost four times its top line for the December quarter.

The company's stock has declined 7% so far in February and, over the course of six months, has declined over 8%. Kerala-based Cochin Shipyard is a shipbuilding and ship repairing company.

Cochin Shipyard was also the top gainer on Nifty India Defence index, which closed trading 1.3% higher, its two-week high.

Other gainers on the index are Unimech Aerospace and Manufacturing, Cyient DLM, Mtar Tech, which rose 3%, 2.5% and 2%, respectively.

Nifty India Defence index rose for sixth out of seven sessions so far.

Defence shares are also in focus as French President Emmanuel Macron arrived in India for a four-day visit to India till February 19.

According to a report by the Times of India, India and France are also set to advance defence cooperation during President Macron's visit, including discussions linked to India’s plan to procure 114 Rafale fighter jets from France under a government-to-government framework and the 6th Annual Defence Dialogue in Bengaluru expected to renew their defence cooperation agreement for another 10 years.

"Defence stocks have selectively come into the limelight lately, with companies involved in aircraft manufacturing, avionics, radar modules, UAVs, and related technologies gaining strength and attention since last week. Stocks such as HAL, BEL, and Bharat Forge have seen notable traction, with delivery volumes jumping nearly 100% above their key averages over the past two days.

"The average RSI of the Nifty Defense Index constituents remains below 50, whereas the RSI levels of HAL, BEL, and Bharat Forge are around 60, indicating relative strength and momentum in these counters. Meanwhile, the shipbuilding segment has shown early signs of a reversal, but it may require broader participation before momentum builds further.

"We will continue to ride stocks like HAL, BEL, and Bharat Forge, while keeping a close watch on Mazdock, GRSE, and Cochin Shipyard to capture emerging opportunities as they develop," said Anand James, Chief Market Strategist, Geojit Investments Limited.