Cochin Shipyard shares hit upper circuit on ex-dividend date, what should investors do?

Shares of Cochin Shipyard were stuck in the upper circuit of 5% even as the defence firm traded ex-dividend in the current session. The board of the firm on November 7 announced an interim dividend of Rs 4 per share for the financial year ending March 2025. The board fixed record date at November 20. In the current session, the defence sector stock was trading at Rs 1365.25, up 5% on BSE.  Cochin Shipyard’s market cap climbed to Rs 35,752 crore. The multibagger stock is trading in the oversold zone, indicates its relative strength index (RSI) at 29.8. It indicates there are more sellers for the stock than buyers in the current trading session. Later, the stock ended 4.84% higher at Rs 1363.15 on BSE.

The stock is amid a major bearish trend as it is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day ,200 day but higher than the 5 day moving averages.

Total 0.32 lakh shares of the firm changed hands amounting to a turnover of Rs 4.33 crore in the afternoon session on BSE. 

The multibagger stock has delivered returns of 99.70% in 2024 and risen 152% in a year. In two years, the stock has risen 313.49%. 

Jigar S Patel, manager at Anand Rathi said, "Support will be Rs 1286  and resistance at Rs 1400. A decisive move above the Rs 1400 level may trigger a further upside of Rs 1450. The expected trading range will be between Rs 1286 to Rs 1450 for the short-term."

Kotak Equities has a sell call on the stock with a fair valu of Rs 800. It has a cautious view on the sector.

"Lack of major defense orders in pipeline and uncertainty around IAC-2 implies low potential for a major order win over the near term and remains a key concern for the stock. Retain SELL, with a revised FV of Rs 800, as we roll forward to September 2026," said the brokerage.   

On the other hand, Antique Broking has a price target of Rs 1627 on the stock. It has a hold call with no change in price target post Q2 earnings. 

"We roll over our earnings estimate to FY27 (from 1HFY27 earlier) and maintain HOLD rating with a target price of Rs 1,627 (earlier Rs 1,622) at a core target P/E multiple of 33x FY27 earnings," said the brokerage. 

AR Ramachandran, an independent Sebi registered analyst said, "Cochin Shipyard is bullish but also oversold on the Daily charts with strong support at Rs 1290. Investors should buy only if Daily close is above the resistance of Rs 1374 for target of Rs 1589 in the near term."

Cochin Shipyard's consolidated net profit surged 4% to Rs 189 crore in Q2 against Rs 182 crore profit in the corresponding quarter of the previous fiscal. Revenue climbed 13% to Rs 1143.2 crore in Q2 against Rs 1011.7 crore in the corresponding quarter of the previous fiscal. Cochin Shipyard's EBITDA surged 3.2% to Rs 197.3 crore in Q2 against Rs 191.2 crore in the corresponding quarter of the previous fiscal.

Cochin Shipyard Limited is engaged in the shipbuilding and ship repair business. The company is engaged in the construction of vessels and repairs and refits of all types of vessels including upgradation of ships periodical layup repairs and life extension of ships.