Rs 22,000 crore order book: This multibagger shipbuilding & repair company bags a new order worth Rs 1,100 crore from Wilson ASA, Norway

The stock gave multibagger returns of 700 per cent in just 1 year whereas BSE Sensex Index is up by 23 per cent.

Udupi Cochin Shipyard Limited (UCSL), a wholly-owned subsidiary of India’s leading shipyard, Cochin Shipyard Limited (CSL), won a prestigious international order from Wilson ASA, Norway, for the design and construction of 4 nos. of 6300 TDW Dry Cargo Vessels. Agreement has also been entered into for an additional 4 vessels of the same type which will be formally contracted within September 19, 2024. This is a follow-up order in continuation of the contract awarded in June 2023 for the design and construction of six 3800 TDW Dry Cargo Vessels which are now at advanced levels of construction at the yard at Udupi, Karnataka.

The Vessel is 100 Meters in length and has a deadweight of 6300 Metric Tonnes at a design draft of 6.5 Meters. The Vessels shall be designed by Conoship International, Netherlands and shall be constructed as environment-friendly diesel-electric vessels for the transport of general cargo in the coastal waters of Europe. The overall project of 8 vessels is worth about Rs. 1,100 crores and is to be executed within September 2028.

Wilson ASA, a company headquartered in Bergen, Norway, is the leading short sea fleet operator in Europe and transports about 15 million tonnes of dry cargo across Europe. The Company operates a fleet of around 130 vessels ranging from 1500 to 8500 DWT.

Earlier to the above order; Udupi Cochin Shipyard Limited (UCSL), a subsidiary of Cochin Shipyard Limited (CSL), has further solidified its partnership with leading Indian tug operator Ocean Sparkle Limited (OSL), owned by Adani Harbor Services. Building on the successful ahead-of-schedule delivery of two 62 T bollard pull ASD tugs currently operating at Paradeep Port and New Mangalore Port, UCSL secured a new order worth approximately Rs 250 crore for the construction of three even more powerful 70 T bollard pull ASD tugs. These state-of-the-art vessels, designed by Robert Allan Limited and built to meet stringent Indian regulations, will measure 33 meters long and boast features like twin main engines, powerful thrusters & advanced winches, generators and firefighting equipment.

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This project aligns with the Indian government's Aatmanirbhar Bharat and Make in India initiatives, as UCSL is the first shipyard to construct tugs complying with the new ASTDS regulations. Furthermore, UCSL's ongoing project with Polestar Maritime Limited, which involves building a second 70 T bollard pull ASD tug after the successful delivery of the first vessel "Konna Star", further demonstrates their ability to deliver high-quality ships on time and secure repeat business. This string of successful projects highlights the remarkable progress UCSL has made since its revival by CSL in September 2020, solidifying its reputation as a leading player in the Indian shipbuilding industry.

Cochin Shipyard Ltd (CSL) is a leading player in the construction of all kinds of vessels, repairs and refits of all types of vessels including periodic upgradation and life extension of ships. The company has a market cap of over Rs 55,000 crore and as of March 31, 2023, the company’s order book stands at approx. Rs 22,000 crore. Furthermore, the shares of CLS underwent a stock split of equity shares from a face value of Rs 10 to a face value of Rs 5 on January 10, 2024. On Monday, the stock gained 4.40 per cent to an intraday high of Rs 2,310.15 per share from its previous closing of Rs 2,212.60.

According to Quarterly Results, net sales increased by 114.3 per cent to Rs 1,286.05 crore and net profit increased by 558.1 per cent to 258.88 crore in Q4FY24 compared to Q4FY23. In its annual results, net sales increased by 62 per cent to Rs 3,830.45 crore and net profit increased by 157 per cent to Rs 783.28 crore in FY24 compared to FY23.

The President of India owns 19,16,86,928 shares or 72.86 per cent stake in the company. As of March 2024, FIIs have increased their stake to 5.23 per cent and DIIs increased their stake to 2.45 per cent compared to 4.11 per cent and 2.20 per cent respectively in December 2023. The stock gave multibagger returns of 700 per cent in just 1 year whereas BSE Sensex Index is up by 23 per cent. Investors should keep an eye on this shipbuilding stock.

Disclaimer: The article is for informational purposes only and not investment advice.