Shares of Cochin Shipyard fell over 7% after the company reported a significant decline in its fourth quarter earnings on Friday.
Cochin Shipyard shares dropped 7.49% intraday to Rs 1,475 apiece. The scrip was trading 6.69% higher by 10:22 a.m. The benchmark NSE Nifty 50 was down 1.11%.
Consolidated net profit dropped 31.7% to Rs 175 crore in the January-March period, compared to Rs 256 crore in the corresponding quarter last year. Slump in revenue contributed to the decline. Revenue from operations of the PSU shipmaker fell 15.6% to Rs 1,484 crore.
The earnings before interest, tax, depreciation and amortisation rose 16.5% to Rs 310 crore, compared to Rs 266 crore. Margin contracted to 20.9% from 15.1%.
Highlighting weak execution and profitability, Kotak Institutional Equities noted that quarterly results were 9% below estimates flagging normalization of ship-repair margins after the execution of one-time ship repair orders for INS Vikrant and Vikramaditya. The brokerage reatined 'Sell' call on the stock at a target price of Rs 830, nearly 43% downside from its current price of 1477.4
For FY27, Kotak has cut its estimates for Cochin Shipyard by 6% to 8% due to the weak execution and profitability in 4QFY26.
It further highlights the progress on tie-ups with HD KSOE , Maersk or Drydocks World along with recently announced expansion of ship-repair facility at Vadinar would be a key catalyst for the stock after the Indian government's Rs700 billion shipbuilding package. On the defense front, the landing platform dock order remains key.
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