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What is the story about?
Shares of Cochin Shipyard fell nearly 9% on Friday, September 11, after the company's FY27 Earnings Before Interest, Tax, Depreciation (EBITDA) margin guidance of around 14% disappointed investors. The company delivered this guidance in an analyst call on Thursday.
This is the biggest single-day fall for the stock since March 2024.
During its investor call on Thursday, the company guided for its revenue growth in financial year 2027 to be 12%, with a potential to rise to 15%. However, it expects margins to stabilize around 14%, compared to the 17% figure it delivered in the June quarter and 16% in financial year 2026.
Cochin Shipyard expects shipbuilding margins to settle between 10%-12%, while ship repair margins are expected to be between 22%-24%. The company said the historically higher margins were supported by high-margin nominated orders and interest income on surplus cash.
The company's revenue mix is expected to be around 70% from shipbuilding and 30% from ship repair going forward.
Cochin Shipyard currently has an order book of around ₹22,000 crore. The company is also the lowest bidder (L1) for survey vessels worth around ₹5,000 crore, which could take its order book to approximately ₹27,000 crore once the order is secured.
The company also highlighted a sizeable defence mega-programme pipeline, including four Landing Platform Docks (LPDs) worth around ₹32,000 crore, 12 Mine Counter Measure Vessels (MCMVs) worth around ₹36,000 crore and seven P17 Bravo vessels worth around ₹49,000 crore.
Cochin Shipyard has also approved a 50:50 joint venture with Drydocks World Dubai, a DP World company, for the Kochi International Ship Repair Facility (ISRF).
The ISRF has been valued at ₹1,800 crore, with Cochin Shipyard receiving ₹900 crore in cash and ₹900 crore in equity in the joint venture.
The JV will add 10 workstations to the facility. Management expects the facility to generate around ₹600 crore in revenue within two years, scaling up to ₹1,000-1,200 crore in five years.
Drydocks World is expected to bring global customers to the facility.
Shares of Cochin Shipyard are trading at the lows of the day, down 8.7% at ₹1,388.8. The stock is down 14% so far this year.
This is the biggest single-day fall for the stock since March 2024.
During its investor call on Thursday, the company guided for its revenue growth in financial year 2027 to be 12%, with a potential to rise to 15%. However, it expects margins to stabilize around 14%, compared to the 17% figure it delivered in the June quarter and 16% in financial year 2026.
Cochin Shipyard expects shipbuilding margins to settle between 10%-12%, while ship repair margins are expected to be between 22%-24%. The company said the historically higher margins were supported by high-margin nominated orders and interest income on surplus cash.
The company's revenue mix is expected to be around 70% from shipbuilding and 30% from ship repair going forward.
Cochin Shipyard order book at ₹22,000 crore
Cochin Shipyard currently has an order book of around ₹22,000 crore. The company is also the lowest bidder (L1) for survey vessels worth around ₹5,000 crore, which could take its order book to approximately ₹27,000 crore once the order is secured.
The company also highlighted a sizeable defence mega-programme pipeline, including four Landing Platform Docks (LPDs) worth around ₹32,000 crore, 12 Mine Counter Measure Vessels (MCMVs) worth around ₹36,000 crore and seven P17 Bravo vessels worth around ₹49,000 crore.
Cochin Shipyard-Drydocks World JV
Cochin Shipyard has also approved a 50:50 joint venture with Drydocks World Dubai, a DP World company, for the Kochi International Ship Repair Facility (ISRF).
The ISRF has been valued at ₹1,800 crore, with Cochin Shipyard receiving ₹900 crore in cash and ₹900 crore in equity in the joint venture.
The JV will add 10 workstations to the facility. Management expects the facility to generate around ₹600 crore in revenue within two years, scaling up to ₹1,000-1,200 crore in five years.
Drydocks World is expected to bring global customers to the facility.
Shares of Cochin Shipyard are trading at the lows of the day, down 8.7% at ₹1,388.8. The stock is down 14% so far this year.
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