COCHINSHIP - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | COCHINSHIP | Market Cap | 40,900 Cr. | Current Price | 1,555 ₹ | High / Low | 2,547 ₹ |
| Stock P/E | 57.5 | Book Value | 219 ₹ | Dividend Yield | 0.63 % | ROCE | 20.4 % |
| ROE | 15.8 % | Face Value | 5.00 ₹ | DMA 50 | 1,606 ₹ | DMA 200 | 1,679 ₹ |
| Chg in FII Hold | -0.48 % | Chg in DII Hold | -0.01 % | PAT Qtr | 138 Cr. | PAT Prev Qtr | 101 Cr. |
| RSI | 47.8 | MACD | -8.57 | Volume | 23,59,117 | Avg Vol 1Wk | 18,72,319 |
| Low price | 1,180 ₹ | High price | 2,547 ₹ | PEG Ratio | 4.48 | Debt to equity | 0.18 |
| 52w Index | 27.4 % | Qtr Profit Var | -25.3 % | EPS | 27.0 ₹ | Industry PE | 41.4 |
📊 Financials: Cochin Shipyard Ltd. has reported PAT of 138 Cr compared to 101 Cr previously, though quarterly profit variation is negative (-25.3%). ROE at 15.8% and ROCE at 20.4% indicate healthy efficiency. Debt-to-equity ratio of 0.18 reflects low leverage, strengthening financial stability. EPS of 27.0 ₹ supports earnings visibility, though profit momentum has softened.
💹 Valuation: Current P/E of 57.5 is significantly higher than the industry average (41.4), suggesting overvaluation. P/B ratio ~7.1 (Price 1,555 ₹ / Book Value 219 ₹) is expensive relative to book value. PEG ratio of 4.48 highlights stretched valuation compared to growth. Dividend yield of 0.63% provides limited income support. Intrinsic value appears lower than current price, reflecting premium valuations.
🏢 Business Model: Cochin Shipyard operates in shipbuilding, ship repair, and defense contracts. Competitive advantage lies in government backing, strategic importance in defense and maritime infrastructure, and strong order book visibility. However, earnings remain cyclical and dependent on project execution timelines.
📈 Entry Zone: Attractive accumulation zone between 1,450–1,500 ₹, closer to DMA200 (1,679 ₹) and near support levels. RSI at 47.8 indicates neutral momentum, while MACD (-8.57) suggests mild bearishness. Long-term investors should accumulate cautiously at lower levels.
🔒 Holding Guidance: Fundamentally stable with government support and strong efficiency metrics. However, valuations are stretched and profit momentum has slowed. Suitable for long-term holding only if accumulated near support levels for margin of safety.
Positive
- Low debt-to-equity ratio (0.18) ensures financial stability.
- Strong ROE (15.8%) and ROCE (20.4%) highlight efficiency.
- Government backing and strategic importance in defense contracts.
- EPS of 27.0 ₹ supports earnings visibility.
Limitation
- High P/E (57.5) compared to industry average (41.4).
- P/B ratio of 7.1 indicates expensive valuation.
- PEG ratio of 4.48 highlights stretched valuation relative to growth.
- Quarterly profit variation (-25.3%) shows slowing momentum.
- FII holdings decreased (-0.48%), showing foreign caution.
Company Negative News
- No major negative news reported, but profit decline and reduced FII holdings raise caution.
Company Positive News
- Strong efficiency metrics with ROE and ROCE.
- Government support ensures long-term stability.
- Strategic positioning in defense and maritime infrastructure.
Industry
- Shipbuilding and defense sector benefits from rising infrastructure and defense spending.
- Industry P/E at 41.4 suggests optimism in the sector.
- Global demand for ship repair and defense contracts supports long-term growth.
Conclusion
✅ Cochin Shipyard Ltd. is financially stable with strong efficiency metrics and government backing. However, valuations are stretched and profit momentum has slowed. Long-term investors may accumulate near 1,450–1,500 ₹ for margin of safety, while monitoring order book execution and institutional sentiment.
I can also extend this with a peer comparison against Mazagon Dock and Garden Reach Shipbuilders to highlight Cochin Shipyard’s relative valuation and efficiency. Would you like me to add that?