Cochin Shipyard shares zoomed 32% in 3 days; what should investors do now?

Shares of defence PSU Cochin Shipyard Ltd continued their strong run for the third consecutive session on Friday. The stock jumped 8.38 per cent to hit a day high of Rs 2,547.25. At this price, it has soared 32.48 per cent in just three trading days.

A market expert suggested that the stock is currently fully priced in, while another indicated that a pullback could be likely due to the recent sharp rally.

"Defence stocks such as Cochin Shipyard have seen a notable rally recently. Although the stock seems fully valued in the short to medium term, its long-term growth potential remains strong. Investors should consider accumulating it only on declines," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

The stock has jumped over 65 per cent in the past month, noted Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One. "Given this sharp rally, a pullback may be on the cards, warranting a more cautious investment approach," he added.

The stock could rise to an upside target of Rs 2,650 level in the near term, said Ravi Singh, Senior Vice-President of Retail Research at Religare Broking. He advised placing a stop loss at Rs 2,280.

The scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). Its 14-day relative strength index (RSI) came at 80.22. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-earnings (P/E) ratio of 78.09 against a price-to-book (P/B) value of 12.09. Earnings per share (EPS) stood at 31.28 with a return on equity (RoE) of 15.48. According to Trendlyne data, Cochin has a one-year beta of 1.4, indicating high volatility.

The state-run defence company has joined hands with Drydocks World to enhance its ship repair and offshore fabrication capabilities. This collaboration is aimed at establishing a world-class ship repair ecosystem catering to both domestic and international fleets.

As of March 2025, the government held a 67.91 per cent stake in the state-run firm.