Antique turns positive on Cochin Shipyard as LNG, Navy wins lift order book

Brokerage firm Antique Stock Broking continues to maintain a positive outlook on the naval shipbuilding sector and has upgraded its rating on Cochin Shipyard (CSL) to Hold from Sell citing that the Indian defence shipbuilding industry is poised for significant order inflows, driven by the Indian Navy and Indian Coast Guard’s ambitious fleet expansion plans, each targeting around 200 ships. 

Beyond defence, Antique highlighted that India’s commercial shipbuilding segment also presents a sizable opportunity, estimated at ₹120-150 billion per year. Key growth areas include container vessels, coastal shipping, dredgers, ferries and cruises, and oil and gas carriers. CSL’s strategic tie-up with KSOE gives it an edge over competitors. 

“We had maintained a negative stance on Cochin Shipyard, given its stagnant order book and the absence of near-term catalysts for major order inflows. Additionally, valuations remained elevated relative to peers. However, we note that, led by recent order wins, the order book growth outlook is improving,” said the brokerage in its report. 

The company has recently secured a prestigious order worth ₹3,240 crore from CMA, France, the world’s third-largest shipping company, raising its order book to ₹23,000 crore. CSL has also emerged as the lowest bidder for the Navy’s Next Generation Survey Vessel, with an estimated order value of ₹5,000 crore. These order wins, Antique said, have improved revenue visibility. 

Antique has, however, kept the target price of Cochin Shipyard shares unchanged at ₹1,471 per share. 

“In light of these developments, we are moderating our stance and revising our rating to Hold (earlier Sell), with an unchanged target price of ₹1,471,” said the brokerage.  READ | RIL correction amid Iran war 'overdone', says JM Financial; eyes 29% upside

CSL bags India’s first LNG vessel order

Cochin Shipyard has been contracted by CMA, France, to build six state-of-the-art LNG-powered containerships at its yard. These vessels will have a capacity of 1,700 TEUs and will be executed in technical cooperation with Korean shipbuilder HD Hyundai Heavy Industries (HD KSOE). Deliveries are scheduled from 2029 to 2031, with an estimated order value of $360 million. Antique said this marks a major step for CSL in establishing a foothold in the LNG-driven container vessel market.

L1 bidder for five Next Generation Survey Vessels

According to the brokerage, CSL has been declared L1 in a tender floated by the Ministry of Defence for the construction of five Next Generation Survey Vessels (NGSV) for the Indian Navy, with an estimated total order value of ₹5,000 crore. The order will be formally awarded upon completion of contractual formalities. Including this, Antique noted that the company’s order book could rise by 21 per cent to ₹28,000 crore. 

“Further, we expect the company to be a major contender for the Landing Platform Dock (LPD) order, with a potential order value of ₹17,000 crore,”  said Antique.  READ | Antique retains 'Buy' on Arvind Fashions, flags growth from brand overhaul

Commercial shipbuilding opportunities open up

Antique also highlighted that SCI has floated an expression of interest (EoI) for eight Very Large Gas Carriers (VLGCs) of 88,000 cubic metre capacity (estimated value USD 950 million) on behalf of its proposed JV with three oil companies. Under the EoI, two VLGCs are to be built at an international shipyard with prior VLGC experience, while the remaining six are to be built at an Indian shipyard through a technical tie-up with the global shipyard. 

The SCI JV has also floated a tender for procuring four medium-range product tankers, potentially worth $200 million. Antique noted that CSL’s tie-up with KSOE should help meet technical qualifications. In addition, CSL is planning a new shipyard in a 50:50 joint venture with KSOE, with an initial investment of about ₹4,500-5,000 crore. 

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