Why This Large Cap Defence Stock Is Climbing Today

Shares of Cochin Shipyard were gaining on Monday after the firm won a large contract from the Indian Navy.

What Happened: Cochin Shipyard clinched a major contract with the Indian Navy for the Medium Refits of two naval vessels.

The ₹150-crore contract encompasses dry-docking, refit and equipment upgrades for the naval ships.

Reporting an impressive 121% year-on-year surge, Cochin Shipyard’s net profit reached ₹244.4 crore, with a 64% increase in revenue, totaling ₹1,056.4 crore for the quarter ending December 2023. The company’s board has proposed a second interim dividend of ₹3.50 per share (70% of face value ₹5) for FY24, with the record date set as February 12.

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Recent Moves: On January 10, the company underwent a share split, reducing the face value from ₹10 to ₹5. On January 31, Cochin Shipyard received an order from a European client for designing and constructing a hybrid service operation vessel (SOV), valued at ₹500 crore, scheduled for delivery in 2026.

Additionally, in January, the company inaugurated a new dry dock and the international ship repair facility (ISRF) in Kochi, involving an investment of ₹1,799 crore. The facility, equipped with heavy ground loading capabilities, positions India for advanced handling of strategic assets like future aircraft carriers and large commercial vessels with a displacement of up to 70,000 tonnes.

Price Action: Cochin Shipyard’s share price was up 0.64% at ₹911 in early trade on Monday.

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