Cochin Shipyard surges 7% on securing large order from European client

Shares of Cochin Shipyard (CSL) surged 7 per cent to Rs 1,278.70 on the BSE in Tuesday’s intra-day trade after the company said it has bagged a large order from a European client, for the design and construction of a hybrid service operation v+essel (Hybrid SOV) with an option for two more such vessels.

As per CSL's classification, orders in the Rs 500 crore to Rs 1,000 crore are termed as 'large' orders.

In exchange filing, CSL said the vessel is equipped with hybrid battery systems to improve the energy efficiency and reduce the carbon foot prints. The vessel is designed and built for the service, maintenance and operational needs of the offshore wind farm industry in the European market where sustainable energy solutions are in high demand. The project is expected to be completed by the end 2026.

At 09:26 am; CSL was trading 4 per cent higher at Rs 1,246.65, as compared to 0.05 per cent decline in the S&P BSE Sensex. The stock had hit a 52-week high of Rs 1,378.95 on April 30.

Earlier, on April 4, CSL signed the master shipyard repair agreement (MSRA), a non-financial agreement, with United States Navy. This will facilitate repair of US Naval vessels under military sealift command in CSL.

As on December 31, 2023, CSL has a total order book position of Rs 21,400 crore. The company said it has shipbuilding order pipeline of approximately Rs 9,000 crore. The other project proposals - request for proposals (RFPs) are at around Rs 84,000 crore, the company said.

With all the policy initiatives taken by the Government of India in the recent times for encouraging & supporting ‘Atmanirbharata’, the overall scenario for warship building looks quite positive in coming years.

The defence shipbuilding segment continues to look promising on account of ambitious acquisition plan of Indian Navy and Indian Coast Guard which is quite encouraging for the Indian shipbuilders and the entire eco-system. A number of RFPs for various shipbuilding projects have been floated by the Ministry of Defence (MoD) during last one year and some more are expected to come out in the near future, according to analysts.