Cochin Shipyard shares are down 33% from record high, oversold on charts; what’s next?

Shares of Cochin Shipyard are down 33% from their record high in nearly two months. The stock, which touched a record high of Rs 2977.10 on July 8, 2024 was trading at Rs 1,998 in early deals today, falling 33% during the period. However, the stock rose 6% to Rs 1998 in the current session on BSE. Cochin Shipyard’s market cap rose to Rs 51,758 crore.

Earlier, Cochin Shipyard stock opened higher at Rs 1,886.95 on BSE. Total 2.62 lakh shares of the firm changed hands amounting to a turnover of Rs 50.82 crore on BSE. Cochin Shipyard has a one-year beta of 1.1, indicating very high volatility during the period.

The stock has delivered multibagger returns of 189% in 2024 and risen 330% in a year.

In terms of technicals, the relative strength index (RSI) of the stock stands at 29.2, signaling the stock is oversold on charts. Cochin Shipyard shares are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day , 100 day but higher than the 150 day and 200 day moving averages.

Mandar Bhojane, Equity Research Analyst, Choice Broking said, "Cochin Shipyard is currently trading at Rs 1886 , having corrected nearly 35% from its all-time high, which suggests that the stock is in a correction phase. If we observe a bullish reversal around the Rs 1850 level or the Rs 1800 level—these levels could present fresh buying opportunities for investors targeting Rs 2,800 and Rs 2,850 in the short term. If the price closes above the Rs 1,977 level, the stock could further rally toward the Rs 2,150 and Rs 2,200 levels. The immediate support is at Rs 1,800. The RSI is currently trading in the oversold region, indicating a potential bullish reversal. Therefore, it is advisable to consider buying on dips, particularly around Rs 1,850 and Rs 1,800, to capitalize on potential retracements in the stock price. To manage risk prudently, a stop loss at Rs 1,770 is recommended."

Kotak Institutional Equities has estimated a fair value of Rs 740 for Cochin Shipyard. Earlier, the fair value of the stock stood at Rs 540. However, the brokerage has retained its Sell call on the stock.

“With the stock trading at 65X March 2026E earnings, it is pricing in multiple such large contracts in the potential Rs 3 trillion Navy awarding pipeline (in the next five years), which we see limited visibility for Cochin Shipyard,” said the brokerage.