Cochin Shipyard shares dropped 7.49% intraday to ₹1,475 apiece following the release of disappointing Q4 results. According to reports from Business Standard, the stock was trading at ₹1,489, down 6.6% from its previous session's close of ₹1,594.50, as of 11:15 AM on Friday. The benchmark NSE Nifty 50 was trading at 23,473.30 levels, up 170 points or 0.72%. The significant decline reflects investor concerns over the company's quarterly performance and future outlook, with the stock's year-to-date performance showing a marginal 1.61% decline compared to Nifty 50's 9.5% fall.
The company reported a consolidated net profit of ₹277 crore in Q4, representing a 3.7% decline compared to ₹287 crore in the corresponding quarter last year. As reported by Business Standard, revenue from operations fell 15.6% to ₹1,484.3 crore, compared to ₹1,757.7 crore in the previous year. However, earnings before interest, tax, depreciation and amortisation rose 16.5% to ₹310 crore, compared to ₹266 crore in the previous year, with margins contracting to 20.9% from 15.1%. The board of directors has recommended a final dividend of ₹1.5 per equity share of face value ₹5 each for FY26, subject to shareholder approval at the upcoming Annual General Meeting.
According to Antique Stock Broking, the revenue miss was primarily driven by weakness in the ship repair segment, where revenues fell sharply by around 61% year-on-year to ₹330 crore, alongside margin pressure in the segment. In contrast, shipbuilding revenues remained strong, rising 25% year-on-year to ₹11.5 billion, supported by steady execution across key projects. Despite the top-line shortfall, EBITDA margins surprised positively at 20.9%, up 575 basis points year-on-year and 705 basis points quarter-on-quarter, significantly ahead of expectations, driven by a 45% quarter-on-quarter decline in other expenses and a net reversal of provisions during the quarter.
The company has faced significant operational challenges that impacted its Q4 performance, including project delays that have cost it a combined ₹215.7 crores in liquidated damages (LD). Additionally, Cochin Shipyard has migrated toward Hydrogen Fuel Cell Vessels that have impacted its downline, while also experiencing challenges regarding the non-appointment of independent directors on its boards and the delay in appointing an Audit Committee and Nomination and Remuneration Committee. Despite these near-term challenges, the company's long-term defense pipeline has remained structurally sound, with the company aiming to fulfill its targeted pipeline of fresh multi-billion-dollar commercial and defence vessel orders heading into FY27.
Antique Stock Broking maintained a 'Hold' rating on the stock with a revised target price of ₹1,693, up from earlier ₹1,390. According to Business Standard, the brokerage noted that current valuations already factor in a relatively optimistic execution trajectory and remain at a significant premium to peers such as MDL. The company's order pipeline remains robust, supported by the CMA order worth ₹3,240 crore for six LNG-powered container ships and L1 status in the Navy's Next Generation Survey Vessel programme valued at ₹5,000 crore. Shipbuilding outlook is further strengthened by expected ASW Corvette deliveries starting FY28E, which should provide a meaningful revenue boost.
