Rs 22,500 Crore Order Book: Defence Ship Building Company Bags Order Worth Rs 450 Crore From Adani Group; Stock Hit Upper Circuit
The stock gave multibagger returns of 126 per cent in just 1 year whereas BSE Sensex Index is up by 8.9 per cent.
On Friday, shares of Cochin Shipyard Ltd hit a 5 per cent upper circuit to Rs 1,532.10 per share from its previous closing of Rs 1,459.15 per share. The stock’s 52-week high is Rs 2,977.10 per share and its 52-week low is Rs 613.03 per share.
Udupi Cochin Shipyard Limited (UCSL), a wholly-owned subsidiary of Cochin Shipyard Limited (CSL), has secured a substantial order from Ocean Sparkle Limited, a prominent company within the Adani Group. This significant order entails the construction of eight high-powered ASD (Azimuthing Stern Drive) Tugs, each boasting a remarkable 70-ton Bollard Pull capacity. The delivery schedule for these tugs is set to commence in December 2026 and conclude by August 2028. This strategic move reinforces UCSL's position as a key player in the Indian shipbuilding industry. The order is worth Rs 450 crore.
The order from Ocean Sparkle Limited marks a significant milestone for UCSL. This substantial contract, which adds to the existing order of three 70-ton Bollard Pull Tugs currently under construction, demonstrates the Adani Group's unwavering confidence in UCSL's shipbuilding capabilities. This strategic partnership underscores the growing importance of Indian shipyards in fulfilling the nation's maritime infrastructure needs.
The 70-ton Bollard Pull Tugs are meticulously designed to meet the highest industry standards. Key specifications include a length of 33 meters, a beam of 12.2 meters, and a draft of 4.2 meters. These powerful vessels will be equipped with two 1838 kW main engines and 2.7-meter propellers, sourced from renowned manufacturers like Niigata IHI Power Systems Co. Ltd. Deck equipment will be supplied by W-Rig Limited, ensuring optimal operational efficiency. The design of these tugs is entrusted to Robert Allan Limited, a global leader in harbour tug design, guaranteeing a robust and reliable vessel.
The construction of these tugs aligns perfectly with the Indian government's "Atma Nirbhar Bharat" initiative, promoting self-reliance in the domestic shipbuilding sector. These vessels will be built in accordance with the Approved Standard Tug Design and Specifications (ASTDS), a crucial step towards achieving this national goal. UCSL has been actively involved in pioneering projects under this scheme, demonstrating its commitment to supporting India's maritime growth. This order, coupled with existing projects for various clients, solidifies UCSL's position as a leading force in the Indian shipbuilding landscape and highlights the company's remarkable turnaround since its acquisition by Cochin Shipyard Limited in 2020.
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About the Company
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 40,000 crore and as of June 30, 2024, the company’s order book stands at approx. Rs 22,500 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.
According to Quarterly Results, net sales increased by 13 per cent to Rs 1,143.20 crore, operating profit increased by 7 per cent to Rs 298.41 crore and net profit increased by 4 per cent to Rs 188.92 crore in Q2FY25 compared to Q2FY24. 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. Looking at its half-yearly results, net sales increased by 29 per cent to Rs 1,914.67 crore, operating profit increased by 26 per cent to Rs 559.77 crore and net profit increased by 30 per cent to Rs 363.16 crore in H1FY25 compared to H1FY24.
In October 2024, The President of India acting through the Ministry of Ports Shipping and Waterways Government of India sold 1,30,15,689 shares or 4.95 per cent stake in the company. As of September 2024, DIIs bought 13,32,000 shares and increased their stake to 3.84 per cent compared to June 2024. The stock gave multibagger returns of 126 per cent in just 1 year whereas BSE Sensex Index is up by 8.9 per cent. Investors should keep an eye on this shipbuilding stock.
Disclaimer: The article is for informational purposes only and not investment advice.