Cochin Shipyard Q4 Results Review - Strong Order Backlog; Execution Expected To Pick Up: ICICI Direct

ICICI Direct Report

Cochin Shipyard Ltd. posted below expected performance in the ship-building segment. Revenue came in at Rs 600.1 crore (down 50.5% YoY).

Both segments, shipbuilding and ship-repair, witnessed a decline in revenues.

Gross margin was at 13.2% (2385 basis points down YoY). At the Ebitda level, Cochin Shipyard reported a loss of Rs 67.1 crore against positive Ebitda of Rs 296.3 core in Q4 FY22. Adjusted profit after tax was at -Rs 22.5 crore against Rs 274.6 crore in Q4 FY22 and Rs 110.4 crore in Q3 FY23.

Key triggers for future price performance:

• The order backlog was healthy at Rs 22132 crore (9.3 times FY23 revenues). Majority of large contracts in the order book are expected to witness meaningful execution during FY24 and FY25.

• Healthy order book and strong pipeline of projects in the coming two to three years from Indian Navy and other international customers.

• Capacity expansion for ship-repair activities to help get more orders in this segment, which is also a higher margin business.

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