30% Dividend: Multibagger Stock Hits New High On Strong Order Book, Rallies Over 128% YTD

Kerala-based leading shipbuilding and maintenance company, Cochin Shipyard has witnessed stellar buying in the trading week from September 4th to 8th. The stock zoomed nearly 33% in 5 trading sessions and even touched a new 52-week high. Strong deal wins have made investors bullish on defense stocks including Cochin. Cochin Shipyard will be in focus ahead for its dividend payout as well apart from optimism related to a strong order pipeline.

On BSE, Cochin Shipyard shares closed at Rs 1209.30 apiece, up by Rs 5.51% on Friday. The stock extended its gaining spree to touch a new 52-week high of Rs 1,258 during the day.

Year-to-date, Cochin Shipyard shares have gained by 128.3% on BSE. In a year, the stock's upside is nearly 216%. Hence, the stock is a multi-bagger.

Cochin Shipyard will be trading ex-dividend later in September for its 30% dividend payout apart from optimism related to a strong order pipeline.

The company has recommended a final dividend of Rs 3 per share on the 13,15,40,390 fully paid equity shares of ₹10/- each.

For the final dividend, in its regulatory filing, the company said that the said Dividend, if approved at the 51st AGM, shall be disbursed (subject to TDS) by October 27, 2023, i.e. within 30 days from the date of approval, to those Members whose names appear in the Register of Members/ Depositories' records, as the case may be, at the close of business hours on September 21, 2023.

Hence, the stock will turn ex-dividend on September 21.

Coming to the order book, during the 'Antique Defence Conference' organized by the Antique Institutional Equities Investment Trust of India (ITI Group) on September 8, 2023, Cochin Shipyard highlighted its financial position under which it also revealed its strong order book.

As of June 30, 2023, the company's order book position stood at Rs 22,000 crore approximately. Under the defense segment, the company's deals stood at Rs 17,288 crore, while commercial domestic vessel orders book was Rs 1,367 crore, and commercial export orders stood at Rs 2,360 crore. In addition to this, the company's subsidiaries have an order book of Rs 789 crore.

That being said, defense accounts for 79% of the company's total order book.

Further, the company has an order pipeline worth Rs 16,000 crore approximately. Earlier, two interim dividends of ₹7/- each aggregating to ₹14/- per equity share had been paid to the shareholders during 2022-23. Thus, the total dividend for the year 2022-23 is ₹17/- per equity share (170%), amounting to ₹223.62 crore.

In the annual report, Madhu Sankunny Nair Chairman & Managing Director said, "I have full confidence in CSL's resilience and
anticipate a robust recovery in FY24, considering the strong order visibility and the execution of various orders in hand."

Also, Nair highlighted that the company is executing two large expansion projects costing ₹2,769 crore viz., International Ship Repair Facility (ISRF) costing ₹970 crore and a new dry dock
costing ₹1,799 crore. He added, "Overall, the project is progressing well and it is expected to complete the construction by December 2023 and thereafter full commissioning of the project by mid of 2024."

Although, the fiscal year 2022-23 presented certain financial and operational challenges for Cochin Shipyard, however, Nair added, "Our results fell short of our initial expectations. Specifically, the revenue from operations for the year amounted to ₹2330.46 crore, compared to ₹3190.00 crore in the prior fiscal year. The profit before tax stood at ₹448.51 crore, down from ₹794.39 Crore in the preceding year. The net profit for the year was ₹334.49 crore, a decrease from ₹586.57 crore in the previous year. Despite this, we achieved PAT Margins of 14%, while the Earnings Per Share (EPS) stood at ₹25.43. Moreover, we achieved an EBIDTA of ₹533.40 crore with a fairly decent EBITDA margin of 23%."

Consolidated revenue from operations stood at Rs 475.86 crore in Q1FY24 versus Rs 440.85 crore in Q1FY23. Profit for the period stood at Rs 98.65 crore in the first quarter of FY24 as against Rs 42.18 crore in Q1FY23.

Cochin Shipyard was incorporated in the year 1972 as a fully owned Govt of India company. In the last three decades, the company has emerged as a forerunner in the Indian Shipbuilding and ship repair industry. This yard can build and repair the largest vessels in India.