COCHINSHIP - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.7
| Stock Code | COCHINSHIP | Market Cap | 39,583 Cr. | Current Price | 1,504 ₹ | High / Low | 2,547 ₹ |
| Stock P/E | 55.6 | Book Value | 219 ₹ | Dividend Yield | 0.65 % | ROCE | 20.4 % |
| ROE | 15.8 % | Face Value | 5.00 ₹ | DMA 50 | 1,595 ₹ | DMA 200 | 1,674 ₹ |
| Chg in FII Hold | -0.48 % | Chg in DII Hold | -0.01 % | PAT Qtr | 138 Cr. | PAT Prev Qtr | 101 Cr. |
| RSI | 42.5 | MACD | -17.5 | Volume | 6,25,563 | Avg Vol 1Wk | 17,03,215 |
| Low price | 1,180 ₹ | High price | 2,547 ₹ | PEG Ratio | 4.33 | Debt to equity | 0.18 |
| 52w Index | 23.7 % | Qtr Profit Var | -25.3 % | EPS | 27.0 ₹ | Industry PE | 42.0 |
📊 Analysis: COCHINSHIP trades at a P/E of 55.6, higher than the industry average of 42, indicating premium valuation. ROE (15.8%) and ROCE (20.4%) show decent efficiency, supported by EPS of 27 ₹. Dividend yield of 0.65% is modest. Debt-to-equity at 0.18 reflects a healthy balance sheet. However, PEG ratio of 4.33 suggests overvaluation relative to growth. Technicals show price below DMA 50 (1,595 ₹) and DMA 200 (1,674 ₹), with RSI at 42.5 indicating near oversold conditions and MACD (-17.5) signaling bearish momentum. Quarterly PAT declined (138 Cr. vs 101 Cr. previous quarter, -25.3% variation), raising caution despite long-term sector demand. Institutional activity is slightly negative, with FII holdings reduced (-0.48%) and DII holdings marginally down (-0.01%).
💰 Ideal Entry Zone: Between 1,350 ₹ – 1,450 ₹ (closer to support levels and valuation comfort). Current price (1,504 ₹) is slightly above ideal entry, so staggered accumulation is recommended.
📈 Exit / Holding Strategy: For long-term investors already holding, maintain positions cautiously given moderate ROE/ROCE and sector potential. Exit if price sustains below 1,180 ₹ (recent low) or if earnings continue to weaken. Holding period: 2–4 years, with periodic review of profitability and order book strength.
Positive
- ROE (15.8%) and ROCE (20.4%) show decent efficiency
- EPS of 27 ₹ supports profitability
- Debt-to-equity ratio of 0.18 indicates strong balance sheet
- RSI at 42.5 suggests near oversold conditions, potential rebound
Limitation
- P/E of 55.6 is higher than industry average (42)
- PEG ratio of 4.33 indicates overvaluation relative to growth
- Dividend yield of 0.65% is modest
- Price below DMA 50 and DMA 200 reflects weak technical trend
- Quarterly PAT declined (-25.3%)
Company Negative News
- Quarterly PAT dropped (138 Cr. vs 101 Cr.)
- FII holdings reduced (-0.48%)
- DII holdings marginally reduced (-0.01%)
Company Positive News
- Debt-to-equity ratio remains low, supporting financial stability
- EPS of 27 ₹ reflects profitability despite short-term weakness
Industry
- Industry P/E at 42 shows COCHINSHIP trades at a premium
- Shipbuilding and defense sector supported by government contracts and infrastructure growth
Conclusion
⚖️ COCHINSHIP is a moderately strong company with decent efficiency and a healthy balance sheet but currently trades at premium valuations with weak technical momentum. Ideal entry is near 1,350–1,450 ₹. Long-term holders should maintain positions for 2–4 years, monitoring profitability, order book strength, and sector demand.