Cochin Shipyard shares may fall another 40%, this analyst says post Q3 results

Shares of state-run Cochin Shipyard Ltd. have more than halved from their peak seen in July last year, but the correction in the ship builder stock is not done yet, according to analysts at Kotak Institutional Equities.

The brokerage believes that stocks may fall another 40% over the next twelve months. The stock ended Thursday’s session at ₹1411.45 on the NSE, down 1% from the previous close.

Kotak Institutional Equities has a “sell” rating on the stock with a revised price target of ₹830 from ₹800 earlier.

The brokerage said that Cochin Shipyard’s December quarter results were in-line with expectations as the strong performance in the ship repair segment was offset by weakness in shipbuilding.
“After INS Vikrant, now INS Vikramaditya ship repair order will aid margins until Q1FY26,” the brokerage wrote in an investor note.Interestingly, the correction in the stock follows stellar rally in the last two years. After more than doubling in both 2023 and 2024, the stock of Cochin Shipyard has begun the new year with losses as it down by 8.3% since January this year. While the stock of Cochin Shipyard surged 127% in 2024, it gained another 153% the year before.

Also read: Cochin Shipyard Q3 net profit slides 28%, revenue up 9%; declares dividend

However, lack of major defense orders in the pipeline may restrict further up move in the stock, according to Kotak’s note. Additionally, media reports suggest a deferral of IAC-2 implies low potential for a major order win over the  near-term & remains a key concerns.

The net profit of Cochin Shipyard declined by 28% to ₹177 crore in the December quarter, compared to ₹244 reported in the year-ago period. The operating margin of the company also fell by 870 basis points (bps) to 20.7% in Q3 FY25. However, the revenue of the company increased by 8.6% to ₹1,148 crore compared to the ₹1,056 crore in the year ago period.