Cochin Shipyard shares climbed 40% in 3 days. Here’s why

Shares of Cochin Shipyard on Thursday climbed 11.97 per cent to take its winning run to the third straight session. The stock has now risen 40 per cent in three sessions after the shipping company announced a strong set of June quarter results.

Cochin Shipyard had reported more than doubling of Q1 profit at Rs 98.65 crore compared with Rs 42.18 crore in the corresponding quarter last year. Consolidated sales for the quarter rose to Rs 475.86 crore compared with Rs 440.85 crore in the same quarter last year. The numbers were boosted by other income and lower expenses.

Operating profit margin for the quarter expanded to 31 per cent against 16 per cent. Interest service coverage ratio came in at 3.94 against 2.36 YoY; debt service coverage ratio stood at 3.94 against 2.36. as per a BSE filing.

Cochin Shipyard has India's largest ship building and maintenance facility and its ability to deliver complex Defence Vessels is vindicated by its delivery of India's first indigenous Aircraft Carrier- INS Vikrant, LKP Securities said. The brokerage noted that Cochin Shipyard is also constructing India's first hydrogen fuel cell vessel, adding that the company is expected to see good momentum this fiscal on the back of its strong Rs 21,000 crore order book.

LKP Securities had on August 14 suggested a price target of Rs 680 on the stock, followed by Rs 710 with a time horizon of 3-6 months. It had advised traders to buy the stock in the Rs 590-Rs 610 range. That said, the target price has been breached.

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