Cochin Shipyard shares zoom 10% to hit fresh record high; here's what you should do

Cochin Shipyard shares on Thursday soared 10 per cent to hit their all-time high value of Rs 2,684.20. At this price, the multibagger stock has rallied 293.85 per cent on a year-to-date (YTD) basis.

The company's arm has recently secured an international order, valued at Rs 1,100 crore, to construct eight "TDW Dry Cargo" vessels.

"We would like to inform that Udupi Cochin Shipyard Ltd (UCSL), a wholly-owned subsidiary of CSL, has entered into contract with Wilson ASA, Norway, for Design and Construction of 4 numbers of 6300 TDW Dry Cargo Vessels. Agreement has also been entered into for additional 4 vessels of the same type which will be formally contracted within September 19, 2024. The overall project of 8 vessels is worth about Rs 1,100 crore and is to be executed within September 2028," it stated in a BSE filing.

Analyst largely remained 'optimistic' on the defence counter. One of them suggested accumulating the stock on dips, given the sharp run up in its share price.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said, "Cochin Shipyard has been one of the top performers from the defence pack. The earnings visibility is quite strong for this company. So, investors with long-term horizon should consider buying it on dips. They can also keep this stock in their key portfolio as the defence momentum is on."

On technical setup, support on the counter could be seen at Rs 2,550, followed by Rs 2,200 level.

Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, "The stock looked strong on all technical parameters. It has potential to hit an upside target of Rs 2,850 in the near term. Keep stop loss placed at Rs 2,550."

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "The stock has experienced a remarkable threefold increase within the current calendar year, reflecting an exceptionally bullish trajectory. From a technical standpoint, there is an intermediate support level around the Rs 2,200 zone, but the stock's resilience in uncharted territory remains uncertain. Overall, the market sentiment remains optimistic, but it's important to exercise caution given the overbought conditions."

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100, 150-day and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 79.09. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 78.95 against a price-to-book (P/B) value of 12.77. Earnings per share (EPS) stood at 30.91 with a return on equity of 16.18.

As of March 2024, promoters held a 72.86 per cent stake in the company.