Cochin Shipyard’s arm bags ₹1,100 cr order; stock surges

Cochin Shipyard Ltd (CSL’s) wholly owned subsidiary Udupi Cochin Shipyard Limited (UCSL) has bagged an international order worth ₹1,100 crore from Wilson ASA, Norway, for design and construction of four 6,300 TDW dry cargo vessels, according to the shipbuilding company’s statement in a release.

Following the announcement of acquisition of this order, CSL's shares surged by 2.08% to reach ₹2,258.70 apiece on BSE at 12:38 pm today, after hitting an intraday high of ₹2,310.15 per share on Monday.

Under the contract, UCSL will design and construct the four 6,300 TDW dry cargo vessels. This contract follows a previous one awarded in June last year for design and construction of six 3800 TDW dry cargo vessels, which are now in advanced stages of construction at the Udupi yard in Karnataka, the company states.

"Agreement has also been entered into for additional 4 vessels of the same type which will be formally contracted within September 19, 2024,” the state-owned shipbuilding company added.

The entire project comprising eight vessels is valued at approximately ₹1,100 crore and is scheduled for completion by September 2028, it states.

The shipbuilding company states that each new vessel will measure 100 metres in length, with a deadweight of 6300 metric tonnes at a design draft of 6.5 metres. They will be designed by Conoship International of the Netherlands and built as environmentally friendly diesel-electric vessels for transporting general cargo in European coastal waters.

Wilson ASA, based in Bergen, Norway, is Europe's short sea fleet operator, transporting approximately 15 million tonnes of dry cargo across Europe with a fleet of about 130 vessels ranging from 1500 to 8500 DWT, it adds.

CSL reported a 558% year-on-year (YoY) increase in net profit, reaching ₹258.9 crore for the fourth quarter ending March 31, 2024, as disclosed in its regulatory filing. This marks a rise from ₹39.3 crore recorded in the same quarter of the previous year. The company's revenue from operations also saw a growth of 114.33%, amounting to ₹1,286 crore compared to ₹600 crore in the corresponding period of the previous fiscal year.

At the operational level, EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) surged to ₹288.3 crore during the fourth quarter of the fiscal year, reversing from a loss of ₹67.1 crore reported in the same period a year earlier. CSL's revenue from the shipbuilding segment totaled ₹985.15 crore, up from ₹453.84 crore in Q4 FY23, while revenue from ship repairing stood at ₹300.89 crore, an increase from ₹146.24 crore a year ago.

For the entire fiscal year 2023-24, the company's annual profit more than doubled to ₹783.27 crore, compared to ₹304.70 crore in FY23.