Multibagger defence stock rises for third straight session; what lies ahead?

Shares of Cochin Shipyard Ltd have delivered multibagger returns of 136% in the last six months. The PSU defence stock, which closed at Rs 487.15 on May 29 stood at Rs 1135.55 in the current session. The stock is trading in green for the third consecutive session, gaining 6.44% during the period. On Friday, the stock closed at Rs 1121.75. In the current session, Cochin Shipyard shares rose 2.29% to an intraday high of Rs 1147.45.

Cochin Shipyard stock opened higher at Rs 1122.05 on BSE. Total 1.50 lakh shares of the firm changed hands amounting to a turnover of Rs 16.93 crore on BSE. Market cap of the firm climbed to Rs 14,942 crore.

In terms of technicals, the relative strength index (RSI) of the stock stands at 65.6, signaling the stock is neither overbought nor oversold on technical charts. Cochin Shipyard has a one-year beta of 0.1, indicating very low volatility during the period. Cochin Shipyard shares are trading higher than the 5 day, 20 day, 50 day, 100 day, 200 day moving averages.

Antique Stock Broking, said Cochin Shipyard’s execution is normalising as Rs 9,800 crore of the NGMV order moves into execution and critical supply chain issues worth Rs 5,900 crore ASW order gets ironed out. Ship building execution stood at Rs 700 crore, up 33 per cent YoY. Ship repairs stood at Rs 250 crore, up 62 per cent YoY.

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher said, "The stock has slowly and gradually surged ahead from the low made near 870 zone and recently moving past the significant 50EMA level of 960 zone has improved the bias with the momentum still maintained and can expect for further rise in the coming days. The volume participation has quite improved in the last one week and with indicators like RSI well placed, has further upside potential to retest the previous peak zone of 1250-1260 levels. One can maintain the near term support zone of 1070 levels and hold on to the long position."

"The spotlight, as usual, is on IAC-2, or INS Vishal. The board has recommended a 2:1 stock split, subject to shareholder approval, and an interim dividend of Rs 8/share,” it said.

The brokerage had assigned a HOLD rating with a target price of Rs 1,145 (29 times 1HFY26E annualised).

Abhijeet from Tips2trades said, “Cochin Shipyard is bullish on the daily charts with next resistance at Rs 1,204. Only a daily close below support of Rs 1101 could lead to target of Rs 998 in the near term."

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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