Cochin Shipyard shares rally 20% to hit one-year high; time to book profit or more upside ahead?

Shares of Cochin Shipyard Ltd continued their upward trend for the seventh consecutive session in Thursday's trade. The counter zoomed 20 per cent to hit a 52-week high of Rs 1,146.15 against its previous close of Rs 955.15. The multibagger stock has ascended by 116.36 in 2023 so far and 195.25 per cent in a year.

Cochin Shipyard has declared a final dividend of Rs 3 for the financial year 2022-23 (FY23) and the stock would trade ex-dividend on September 21, 2023. The defence manufacturer is scheduled to hold its annual general meeting (AGM) later on September 28.

The share price soared today on anticipation of getting a new order to build an aircraft carrier, said market expert Ravi Singh. "Cochin Shipyard was already in a buy momentum on technical setup as most of the parameters indicated a strong uptrend inherent in the counter. The stock may touch Rs 1,250 level in coming trading weeks," he stated.

A strong buying action with volumes was seen in Cochin Shipyard even at higher prices, Rajesh Palviya, Head Technical Research at Axis Securities, told BT TV. He sees the stock at Rs 1,150. There were 99,176 buy orders on BSE today against sell orders of nil shares.

"Those who have bought this counter at lower levels can now trail their stop loss towards Rs 1,020," Palviya further mentioned.

On the flipside, an analyst suggested investors to book profits at current levels. Support on the counter could be seen at Rs 988.

"Cochin Shipyard is bullish but also overbought on the daily charts with next resistance at Rs 1,214. Investors should book profits at current levels as a daily close below support of Rs 988 could lead to target of Rs 805 in the near term," said AR Ramachandran from Tips2trades.

The counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 79.80. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 31.81 against a price-to-book (P/B) value of 2.84.

The scrip has an analyst target price of Rs 682, Trendlyne data showed, suggesting a potential downside of 40 per cent. It has a one-year beta of 1.28, indicating high volatility on the counter.

Cochin Shipyard has India's largest ship building and maintenance facility and its ability to deliver complex Defence Vessels is vindicated by its delivery of India's first indigenous Aircraft Carrier (INS Vikrant), LKP Securities said. The brokerage noted that Cochin Shipyard is also constructing India's first hydrogen fuel cell vessel, adding that the company is expected to see good momentum this fiscal on the back of its strong Rs 21,000 crore order book.

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