Shipbuilding stocks Cochin Shipyard, Garden Reach surge over 33% in past 3 trading sessions, defy market weakness

Shipbuilding stocks are skyrocketing despite sluggish momentum in Indian markets amid negative global cues. Shares of Cochin Shipyard hit a fresh all-time high at Rs 888 in intra-day trade on the BSE on August 17. Plus, the stock extended its three-day rally after reporting robust Q1 earnings. In the past three trading sessions, the stock has zoomed more than 37 per cent.

Similarly, shares of Garden Reach Shipbuilders & Enginers Ltd (GRSE) surged 32.88 percent in the past three trading sessions after the company announced its Q1 results.

At 11:55 am, Cochin Shipyard climbed 9.09 per cent at Rs 881.25 and Garden Reach Shipbuilders & Enginers rose nearly 2.41 percent at Rs 795. Meanwhile, the S&P BSE Sensex was down 0.3 per cent at 65,365. So far, this calendar year both the stocks have outperformed the market by rallying 66.3 percent and 65.50 percent, respectively, while the benchmark index has gained 7.2 per cent.

On August 11, Cochin Shipyard reported a 123.7 percent surge in Q1 net profit at Rs 109.41 crore in Q1FY24 as against Rs 48.91 crore in the corresponding quarter a year ago. Total income was up 6.3 per cent at Rs 528.34 crore from Rs 497.21 crore.

Meanwhile, in the quarter ended June, 2023, GRSE posted a net profit of Rs 76.68 crore, up from Rs 50.18 crore reported in the corresponding quarter of the previous year. Sequentially, the company’s profits were higher by 38 percent compared to Rs 55.29 crore in the previous quarter. The company’s revenue grew by 30 percent year on year to Rs 755.90 crore compared to Rs 579.77 crore last year.

Garden Reach Shipbuilders & Engineers Ltd is a shipbuilding company in India under the administrative control of the Ministry of Defence, primarily catering to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard. It is diversified, profit making and the first shipyard in the country to export warships and deliver 100 warships to the Indian Navy and Indian Coast Guard.

Cochin Shipyard Limited(CSL) is engaged in construction of all kinds of vessels, repairs and refits of all types of vessels including periodic upgradation and life extension of ships.

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On July 31, Cochin Shipyard stated in a regulatory filing that it was upgraded from ‘Schedule B’ to ‘Schedule A’ CPSE by the Government of India.

“The upgradation to ‘Schedule A’ recognises the company’s strong financial performance and operational efficiency and contribution to national security.” This will now help the company operate larger senior management bandwidth required for effectively managing its seven units spread across the country, the release added.

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