Cochin Shipyard Ltd. share price target

Cochin Shipyard exited FY21 with an outstanding performance in Q4 wherein revenue and operating margins were a beat to our estimates. Ship repair segment, which was lagging since Covid, has now kicked in strong revenue and margins adding thrust to Cochin's overall performance. The company declared a dividend of | 2.5 per share during the quarter. Revenue for the quarter came in at | 1080.3 crore (vs. I-direct estimate of | 975 crore), up 32.3% YoY, 44.3% QoQ. Gross margins contracted ~411 bps YoY, 2150 bps QoQ (YoY being a higher base, QoQ being a one-off exception)....

Way2Wealth Brokers Pvt. Ltd. (CIN U67120KA2000PTC027628) SEBI Rgn. No. : INH200002739. Registered Office: Rukmini Towers, 3rd& 4th Floor, # 3/1, Platform Road, Sheshadripuram, Bangalore - 560 020, Website: www.way2wealth.com Email: research@way2wealth.comWay2wealth Research is also available on Bloomberg WTWL W2W Lighthouse A Quick Perspective Cochin Shipyard Ltd (CSL) was incorporated in the year 1972 as a fully owned Government of India company. In the last three decades the company has emerged as a forerunner in the Indian Shipbuilding & Ship-Repair industry. This yard can build and repair the largest vessels in India. It can build ships upto 110,000 DWT and...

Long expected IAC basin trials are on November 27 whereas delivery for the same is expected by December 2021. If things fall in place, as they should, we expect FY22E to be amplified on account of IAC execution. This should aid management to reach their topline target of | 4000 crore. In the quarter, IAC execution was | 491 crore (cost plus | 283 crore, fixed price | 207 crore)....

Cochin Shipyard Ltd (CSL) is the largest public sector shipyard in India deriving major revenue from Navy. The main sources of revenue are ship building for Navy, Coast guard, commercial and ship repair. Q1FY21 revenue & Profitability declined by 55% & 65% on account of Covid-19 related disruptions. Order backlog is at ~Rs14,393cr, including recently booked order...

Cochin Shipyard (CSL) registered a substandard performance in Q1FY21 as production was halted till May 5. After this, production started on a reduced time scale for a significant period of the quarter affecting overall performance. Revenue for the quarter was at | 332.5 crore, down 55% YoY. Shipbuilding (SB) revenue fell 47.5% YoY to | 316.1 crore while shiprepair (SR) segment contracted 87.7% YoY to | 16.35 crore in the quarter. On a segmental profitability front, SB reported EBIT of | 62.5 crore whereas SR clocked an EBIT (loss) of | 8.9 crore. SB, SR segments contributed 95.1%,...

It has healthy shipbuilding order book of Rs139bn (5.5x TTM sales).Orderpipelineof~Rs150bnincludes,i)NewGeneration MissileVessels,ii)MultipurposeVessels&iii)OffshorePatrol Vessels. Large shiprepair order of INS Vikramaditya (aircraft...

Cochin Shipyard Ltd (CSL) reported a healthy set of numbers in Q4 with topline growing by 3.6% yoy, though on a qoq basis they fell by 9%. The material costs saw a contraction in Q4 as they stood at 48.3%. Subcontracting costs dropped by 18.4% yoy in the quarter. EBITDA margins saw a solid surge at 20% v/s 14% yoy as the company reported strong ship repair margins at 27% on a strong execution and delivery in this business. Other income fell to 450 mn over 643 mn yoy. PBT grew by 14.8% yoy to 1.8 bn, while reporting strong margins at 22.6%. PAT came at 1.4 bn , which has grown by 42.5% yoy, while margins came at 17%. The company delivered a 1000 MT Cargo vessel for A&N; administration. The company also delivered 8 RoRo vessels (2...

Cochin Shipyard Ltd (CSL), a public listed company, incorporated on March 29, 1972, is a pioneer in defence shipbuilding and repairing, with a standalone ship repairing facility unlike any other competitor. Due to its expertise in shipbuilding & shiprepairing and strong, long lasting relations with its key clients, the company is benefitted to provide important warship products in the coming years. The order book size of these projects is at a healthy 153 bn to be delivered over the next 2-3 years. This visibility is enough long term and will lead to a good growth in revenues and profitability. Considering its strong order book with IAC and ASWC projects at the helm in the shipbuilding business, expectations of more order wins through RFP bidding, we expect a...

Cochin Shipyard Ltd (CSL) is the largest public sector shipyard in India deriving major revenue from Navy. The main sources of revenue are ship building for navy, coast guard, commercial and ship repair. Given CSL's strong balance sheet, dividend of 5.3%, improvement in order book visibility and capacity expansion, we remain constructive on the stock. Order backlog is at ~Rs15,253cr, including recently booked ordersAnti submarine warfare vessel (ASW Corvettes-Rs6,300), IAC Phase - III (Rs3,235), has enhanced earnings visibility in the near future....

The management has asserted a 14-15% revenue growth for FY20E while giving a guidance of | 610 crore for SR during the year. CSL has completed more than 20 projects from Mumbai port and expects revenues worth | 75 crore and | 100-120 crore in FY20E & FY21E, respectively. The company's key project IAC is expected to go out for sea trial during first half this year. CSL expects | 2200 crore worth of revenue from IAC in FY20E while the management has guided for | 2500 crore next year. Total order backlog of IAC is | 2850 crore for fixed cost and | 4250 crore for cost plus. The planned...

Solid shipbuilding performance, healthy b/s, capacity addition During Q1FY20, revenue booked for indigenous air craft carrier under cost plus' was at | 356 crore while fixed price' contract was | 114 crore for an aggregate of | 470 crore. CSL continues to have a healthy b/s with cash balance of ~| 2400 crore as on Q1FY20. Of the planned capex of ~| 3000 crore (| 2769 crore for the new larger size dry dock and repair facility with | 170 crore for Hooghly Cochin Shipyard. In addition, CSL plans to spend on developing docks at Mumbai, Andaman & Nicobar and Kolkata), CSL has...