The average target price of COCHINSHIP.NS is 1271 and suggests 34% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 1640.0. This is lower than the current market price, meaning that even the most optimistic analyst does not see upside potential. On the other hand, the most pessimistic analyst has a target price of 850.0. This is equivalent to 56% downside potential in the worst case. 

Cochin Shipyard Limited engages in the shipbuilding and repair of ships/offshore structures in India. Its shipbuilding operations include offering tankers, product carriers, bulk carriers, passenger vessels, high bollard pull tugs, and air defence ships. It also undertakes upgradation of mobile offshore drilling units of Oil and Natural Gas Corporation Ltd; maintenance and repair of aircraft carriers of the Indian Navy; and repair and maintenance of tankers and bulk carriers of Shipping Corporation of India. In addition, the company provides marine engineering training services. Cochin Shipyard Limited was founded in 1969 and is based in Ernakulam, India.

India

Cochin Shipyard Limited

Industrials

The company pays dividends most of the time. It has paid dividends in almost every one of the past ten years. Dividend per share (DPS) has grown yearly, and there is a clear trend. In the past 12 months, the dividend yield has been low and below its peers. On average, the company pays dividends every four months. 

COCHINSHIP.NS reported revenue of INR 48 200mn in the last 12 months, up 11% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 4% from FY24 to INR 31.45. Market expects EPS to reach INR 30.25 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 6ppts over past six months and grown 15ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is positive. Usually, this means that a fairly valued or slightly undervalued stock has become more 'expensive', indicating that the market, in general, may have gained short-term confidence in the stock.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 20.1% in the last 12 months, a decline from 24.6% in FY24. 

Historically, COCHINSHIP.NS has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 17.2%, down from 18.4% in FY24. 

In the last 12 months, the return on capital employed (RoCE) declined to 13.5%, above the peers. The consensus estimate for FY25 for RoCE is 16.7%, again ahead of the peers. 

Cochin Shipyard Limited reported a return on equity (RoE) of 14.8% in the last 12 months, down from 15.1% in FY24. The market consensus projects an RoE of 15.6% in FY25, again ahead of its peers. 

Another important profitability metric, return on assets (RoA), amounted to 6.2% in the last 12 months, a decrease from 6.3% in FY24. The market analysts predict that RoA will be 6.0% in FY25, again stronger than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 3.4 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

COCHINSHIP.NS has above average trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity may be unstable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, strong debt servicing capacity, adequate interest coverage, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to weak positions in its industry, poor working capital management.

In highly turbulent market conditions, COCHINSHIP.NS is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, COCHINSHIP.NS is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to mild. We would also like to highlight the mild intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is considerably overpriced compared to similar stocks. Specifically, the stock is 'expensive' on P/E, overvalued on EV/EBITD. 

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Cochin Shipyard Limited

₹ 1939.2

4

Cochin Shipyard Limited

₹ 1939.2

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

₹ 1939.2

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