Cochin Shipyard shares up over 165% in 6 months; can this multibagger defence stock rally further?

Shares of Cochin Shipyard Ltd rose sharply in Tuesday's trade, pausing their five-day losing run. The stock jumped 14.18 per cent to hit a day high price of Rs 1,123 over its previous close of Rs 983.55. It was last seen trading 12.97 per cent higher at Rs 1,111.10 today. At this price, the multibagger counter was up 166.74 per cent in the past six months.

On the technical setup, analysts largely suggested that the stock looked 'bullish' at current levels. Support could be seen around Rs 984, followed by Rs 980 level.

"For Cochin Shipyard, the overall trend has been positive in the last 4-5 months. This is a very good entry point at current levels. Stop loss would be placed at Rs 980. This level would also act as support on the downside. On the higher side, we could see levels of Rs 1,098-1,140 in the next few sessions," Sudeep Shah, Head, Tech & Derivatives Research at SBI Securities, told BT TV today.

"Cochin Shipyard is bullish on the daily charts with strong support at Rs 984. A daily close above resistance of Rs 1,101 could lead to target of Rs 1,205 in the near term," said AR Ramachandran from Tips2trades.

The counter was last seen trading higher than the 5-day, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs) but lower than the 10-day SMA. The counter's 14-day relative strength index (RSI) came at 59.36. 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 32.75 against a price-to-book (P/B) value of 2.92.

Yet, the scrip has an analyst target price of Rs 766, Trendlyne data showed, suggesting a potential downside of 28 per cent. It has a one-year beta of 1.52, indicating high volatility on the counter.

Cochin Shipyard's stock turned ex-dividend on September 21. The company had declared a final dividend of Rs 3. The defence manufacturer is now scheduled to hold its annual general meeting (AGM) on September 28 (Thursday).

Nuvama Research, while sharing an outlook on India's defence sector, said it continue to remain positive. "Defence capex budget estimate for FY24 is Rs 1.63 lakh crore versus Rs 1.52 lakh crore in FY23, with defence capex (actuals) expanding at a CAGR of 13.3 per cent over three years. India is not only adding new systems with upgraded technology to its defence forces, but also replacing the older ones along with ramping up of exports at a fast clip," it stated.

 

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

 

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