Buy Cochin Shipyard, target price Rs 620: ICICI Direct

ICICI Direct has buy call on Cochin Shipyard with a target price of Rs 620. The current market price of Cochin Shipyard is Rs 479.1.

Cochin Shipyard, incorporated in the year 1972, is a Mid Cap company (having a market cap of Rs 6324.46 Crore) operating in Defence sector.

Cochin Shipyard key Products/Revenue Segments include Indigenous Aircraft Carrier, Vessels, Ship Repairs and Other Operating Revenue for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 664.85 Crore, down -10.74 % from last quarter Total Income of Rs 744.88 Crore and down -34.56 % from last year same quarter Total Income of Rs 1015.91 Crore. Company has reported net profit after tax of Rs 110.40 Crore in latest quarter.

The company’s top management includes Mr.Madhu S Nair, Mr.Sreejith Katayamkot Narayanan, Mr.Vikram Singh, Mr.Abhijit Biswas, Mr.M Venkatesan, Mr.Prithviraj Harichandan, Mr.Ashok Sharma, Mr.Nahar Singh Maheshwari, Mr.K R Jyothilal, Mrs.Amrapali Prashant Salve, Mr.Bejoy Bhasker, Mr.V J Jose. Company has Elias George & Co. as its auditors. As on 31-12-2022, the company has a total of 13 Crore shares outstanding.

Investment Rationale
The brokerage believes the concern of lacking large ship-building orders for CSL (post commissioning of INS Vikrant) has also been ended with these contracts, which provides healthy revenue visibility over the next few years. With the expected timely execution of these ship-building contracts and increasing contribution in ship repair segment, CSL has strong earnings visibility for the coming years.

Promoter/FII Holdings
Promoters held 72.86 per cent stake in the company as of 31-Dec-2022, while FIIs owned 6.87 per cent, DIIs 3.87 per cent.