Cochin Shipyard Limited

Industrials — Aerospace & Defense · NSE

₹1,248.80−₹5.20 (−0.41%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Low

Driven by negative free cash flow, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Cochin Shipyard Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Cochin Shipyard Limited, together with its subsidiaries, engages in the building and repair of ships and offshore structures in India and internationally. The company operates through two segments, Shipbuilding and Ship Repair.

IndustryAerospace & Defense

SectorIndustrials

Employees2,131

Annual revenue₹4,775 Cr

How does it make money?

Turns over ₹4,775 Cr a year. Of every ₹100 of sales, about ₹15 reaches shareholders as profit, with ₹26 left at the operating level before interest, tax and depreciation. Each of its 2,131 employees supports ₹2.24 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.24 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 16.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE15.2%

What is the outlook?

3 analysts covering the stock expect revenue to grow about 20.0% and earnings to grow about 23.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+20.0%

Est. earnings growth+23.8%

Analysts3

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +105% while net margin moved +15% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+105%

Margin effect+15%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 48.3x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 53.0x
✗ P/B of 5.59x is a steep premium to book

Quality vs. Valuation

Company Quality

71/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

54/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

48.3x

3Y Median

53.0x

40 monthly readings · mean 65.7x · range 37.9x–226.3x

Sector Median

88.8x

median of 3 sector peers

🟡Currently trading close to its 3y median of 53.0x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 46% below the peer median of 88.8x.

vs. its own history

Fair

53.0x median over 40 months · -9%

vs. sector peers

Cheap

88.8x median of 3 peers · -46%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

27.3x

PEG

1.46

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 19.8% to 26.4% over 3 years.
Return on equity is rising
ROE has improved from 6.9% to 12.2%.
Return on capital is rising
ROCE has improved from 9.3% to 16.7%.
Very low debt
Debt/Equity of 0.28x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 185% over 3 years, from ₹587 Cr to ₹1,672 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Inventory building faster than salesFinancial
Inventory up 514% against revenue up 105% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 19.8% to 26.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 46% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 20% a year✓ 26.9% CAGR
Latest reported year was 2.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 24%✓ 26.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹1,385 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 14%✓ 16.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 4 neutral · 4 weak

Market Cap

₹32,854 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

48.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

5.59x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹25.86

Profitable

Profitable on a per-share basis

ROE

12.2%

Moderate

Moderate capital efficiency

ROCE

16.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.28x

Low

Conservative leverage

Revenue Growth (YoY)

2.4%

Modest

Modest growth

Profit Growth (YoY)

-19.3%

Falling

Profits are shrinking

Dividend Yield

0.90%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹1,385 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

27.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

14.7%

Average

Average margins

Net Margin

13.5%

Good

Strong bottom-line conversion

Current Ratio

1.33

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.60

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

1304.1 / 1411.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,334 Cr	₹3,767 Cr	₹4,656 Cr	₹4,775 Cr	+26.9%
EBITDA	₹462 Cr	₹1,194 Cr	₹1,359 Cr	₹1,262 Cr	+39.8%
EBITDA Margin	19.8%	31.7%	29.2%	26.4%	—
PAT (Net Profit)	₹305 Cr	₹783 Cr	₹827 Cr	₹717 Cr	+33.0%
EPS	₹11.58	₹29.77	₹31.45	₹27.24	+33.0%
ROE	6.9%	15.7%	14.8%	12.2%	—
ROCE	9.3%	20.0%	19.0%	16.7%	—
Total Debt	₹587 Cr	₹502 Cr	₹560 Cr	₹1,672 Cr	+41.7%
Free Cash Flow	₹1,538 Cr	-₹805 Cr	-₹542 Cr	-₹1,385 Cr	—

🟢 Revenue has grown at 26.9% a year over 3 years.

🟢 EBITDA has grown at 39.8% a year over 3 years.

🟢 EBITDA Margin has risen from 19.8% to 26.4% over 3 years (+6.6 pts).

🟢 PAT (Net Profit) has grown at 33.0% a year over 3 years.

🟢 EPS has grown at 33.0% a year over 3 years.

🟢 ROE has risen from 6.9% to 12.2% over 3 years (+5.3 pts).

🟢 ROCE has risen from 9.3% to 16.7% over 3 years (+7.4 pts).

🔴 Total Debt has grown at 41.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1,538 Cr to -₹1,385 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹14,531 Cr

Total Liabilities

₹8,658 Cr

Cash & Equivalents

₹105 Cr

Operating Cash Flow

-₹1,234 Cr

Capex

-₹151 Cr

Shareholding (proxy)

Institutional Holding

10.7%

Insider Holding

63.3%

Corporate Actions

Dividend Rate

₹11.25

Ex-Dividend Date

18 Sept 2026

Analyst Consensus

Recommendations

2 Buy · 1 Hold · 1 Sell

Target Price (Mean)

₹1,499

+20.0% vs CMP

Target Range

₹860 – ₹1,900

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive3 mixed1 negative1 general

Why Cochin Shipyard Share Price is Falling

Equitymaster, 11 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Cochin Shipyard shares jump 5% as firm gets order to build 40 ships from US and other countries; details here

Upstox, 09 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Cochin Shipyard Q4 EBITDA Rises, Dividend Declared

scanx.trade, 11 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

#StockOfTheDay Sell Cochin Shipyard Futures: SL 1525 Tgt 1430, 1410 Government to sell 5% stake at 1400/share via OFS Buy HDFC Bank Futures: SL 815 Tgt 840, 850 Big breakout after long time Expect more FIIs buying Buy Varun Beverages Futures: SL

Facebook, 06 Jul

Cochin Shipyard Shares Down 4% as Rs 1,800 Crore OFS Opens

HDFC Sky, 07 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Cochin Shipyard falls over 8% as company indicates lower EBITDA margin; ICICI Direct downgrades stock to...

Moneycontrol.com, 11 SeptAnalyst view

🔴Potentially negativeAn analyst opinion changing, which moves the price without changing the business.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health · Risk

WeakValuation

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 3 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑