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Cochin Shipyard Ltd : Ready to hit new highs ??

Company Background
Cochin Shipyard Ltd (CSL) was incorporated in the year 1972 as a fully owned Government of India company. In the last four decades CSL has emerged as a forerunner in the Indian shipbuilding & ship repair industry and also an emergent player in the global map. CSL has exported close to 50 ships and vessels to many countries including USA, Germany, Netherlands, Cyprus and Saudi Arabia.
Currently, CSL has 2 docks for shipbuilding (capacity of 110K DWT) and ship repair (capacity of 125K DWT). CSL is adding new dry dock at a total cost of Rs18 bn and international ship repair facilities at the cost of Rs9 bn which will enable the company to build large ships like LNG vessels, large container vessels, new generation aircraft carriers etc.

CSL is the only profitable company among its peers. CSL is the largest public sector shipyard in India in terms of dock capacity.
It is the only shipyard company to have undertaken dry dock repairs of aircraft carriers INS Viraat and INS Vikramaditya, for the Indian Navy.
CSL have healthy order book indicates strong revenues to add in coming quarters. CLS’s current order book stands around Rs 3087cr. It is likely to receive order for indigenous aircraft carrier which will be more than Rs 8,000 crore.
CLS has expended its business in developing dry dock and international ship repair which will be key growth drivers for the company in coming years.
CSL has a very strong broad based product portfolio and has built large ships and executed these orders successfully hence this factor is unparalleled as compared to its local peers which are much smaller in size.
CSL enjoys 39% market share in ship repair segment and is a quality play in this sector.

Technical Aspect

Newly listed counter Cochin Shipyard positive sign after couple of days consolidation between 501 to 545 (range of 45). On a longer term, Stock is expected to make new highs. Order book of the company with 3000 crore odd and balance sheet strengthens the company. Company will surprise with positive numbers in its first set of quarterly results. 20% up move was witnessed at the day of listing followed by some profit booking that led price to corrective itself. Investors, who missed opportunity by not getting allotment, were seen accumulating throughout the sideways move. Momentum have been quite bullish and RSI retains above 60 levels indicates bullishness in place. Resistance levels seen around 595 and above that 624 while supports stands around 524. Thus one should keep watch in this counter with the positive bias in coming months.

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