Cochin Shipyard is sailing some good waters despite the not-so-calm sea on Dalal Street today. The stock price soared to hit its 5% UC of the day at Rs.1655.75. Its 52-week high stands at Rs.2977.10.

The company announced on Saturday afternoon that it has signed a contract with the Ministry of Defence (MoD), Government of India, for Short Refit and Dry Docking of a Large Indian Naval Vessel. 2.

The estimated contract value is above Rs.1,000 crore and the estimated duration for the project is around 5 months.

The company did well in Q2FY25. Q2 revenue was up 48% QoQ and 13% YoY to Rs. 1,143 cr and PAT up 9% QoQ and 4% YoY to Rs. 189 cr, translating into 15% net margin. Both ship building and ship repair segments posted healthy growth in the Sep quarter, with ship repair, accounting for 1/4th topline, witnessing operating margin expansion from 27% in Q2FY24 to 30% in Q2FY25. EPS for Q2FY25 rose to Rs. 7.2, from Rs. 6.9 YoY, while H1FY25 EPS surged 30% YoY to Rs. 14.

The company guides for 25% YoY revenue growth for FY25E but it is likely to be much higher, due to recent capacity addition. Cochin Shipyard has an outstanding order book of Rs. 22,500 cr, representing a book-to-bill of 5.9x, based on FY24 revenue of Rs. 3,830 cr, which was a life-high revenue for the company. 70% of this order book comprises 15 vessels for defence worth Rs. 15,028 cr, while 60% constitutes green vessels, which are highly popular in European markets, while Rs. 7,820 cr order inflow is likely going forward.

As mentioned by Mr.SP Tulsian, the stock is a safe and growth oriented investment.