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Cochin Shipyard is on a dream run, but not without some turbulence. On Thursday (June 5, 2025), the stock jumped around 11.5 per cent, catching attention on the back of strong revenue growth and a roaring defence order book. But beneath the surface, there’s a dip in profitability that investors shouldn’t ignore.
Q4 FY25 snapshot: A mixed bag
Cochin Shipyard’s Q4 FY25 numbers paint a mixed picture. Revenue rose sharply by 37 per cent YoY, while net profit 11 per cent. But margins slipped, and operating profit fell nearly 8 per cent.
| Metric | Q4 FY25 | Q4 FY24 | YoY change |
|---|---|---|---|
| Revenue | Rs 1,758 crore | Rs 1,284 crore | 37 per cent |
| EBITDA | Rs 266 crore | Rs 288 crore | -7.6 per cent |
| EBITDA margin | 15.1 per cent | 22.4 per cent | -0.3 bps |
| Net profit | Rs 287 crore | Rs 259 crore | 10.8 per cent |
The margin compression raises questions, especially in an industry where contracts are long-term and cost overruns are real.
What’s driving the rally?
The stock is currently trading at Rs 2,324 on the BSE, backed by huge volumes.
This surge comes as part of a broader rally in defence stocks. Investors are betting big on India’s naval expansion, and Cochin Shipyard is at the centre of it. The company’s expanding order book and execution wins are keeping the momentum going.
Long-term rally, but priced in?
Over the last two years, the stock has returned a staggering 737 per cent. Over three years? 1,178 per cent. That kind of run usually prices in a lot of future optimism. With defence orders still flowing in and the stock above all major moving averages, bullishness may persist, but fresh upside could be more measured.
Brokerages now peg a near-term target of Rs 2,460, with support seen near Rs 2,050.
What does Cochin Shipyard do?
Cochin Shipyard is India’s largest public sector shipbuilder. The company builds and repairs everything from aircraft carriers and patrol vessels to tankers. It’s a key supplier to the Indian Navy and Coast Guard.
Below is a table showing its fundamentals.
| Metric | Value |
|---|---|
| Market cap | Rs 54,792 crore |
| ROE | 16.6 per cent |
| ROCE | 23.3 per cent |
| P/E ratio | 66.2 |
| P/B ratio | 9.8 |
| Dividend yield | 0.5 per cent |
| Book value | Rs 212.1 |
| EPS | Rs 31.4 |
Value Research Online ratings
- Overall: 3/5
- Quality: 9/10
- Growth: 6/10
- Valuation: 2/10
- Momentum: 8/10
Should you chase the rally?
Cochin Shipyard has delivered. The defence tailwind, strong financials, and visibility from government contracts make it a solid long-term story. But after such a sharp run-up, and with margins under pressure, this may not be the best time to go all-in.
If you're holding the stock, it may be best to stay put but watch the earnings trend. But if you're looking to enter, it may be better to wait for a dip or more clarity on cost control.
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Disclaimer: This is not a stock recommendation. This story was created with the assistance of artificial intelligence and is intended for informational purposes only. Please take it with a pinch of salt and do your own research or consult a financial advisor before making investment decisions.
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