Cochin Shipyard Shares Slide 8 Percent After Q2 Net Profit Halves

Cochin Shipyard shares fell 8 percent to an intra-day low of 1,186.75 rupees on Wednesday, November 11, after the defence public sector undertaking reported a sharp drop in its September quarter earnings.

Financial Results

The Miniratna PSU posted a consolidated net profit of 53.77 crore rupees in the second quarter of financial year 2027, down nearly 50 percent from 107.53 crore rupees in the same period a year ago. Revenue from operations grew 11.7 percent year-on-year to 1,249.19 crore rupees, while total income increased 6.9 percent to 1,331.81 crore rupees. Earnings before interest, taxes, depreciation, and amortisation dropped 30.7 percent to 51 crore rupees, and the EBITDA margin contracted to 4.1 percent. Total expenses climbed 14.7 percent to 1,256.72 crore rupees, outpacing revenue growth and weighing heavily on performance.

Segment Performance And Dividend

The shipbuilding division remained the main drag, swinging to a loss of 6.08 crore rupees compared to a profit of 149.71 crore rupees previously, even as its revenue rose 3.2 percent to 783.14 crore rupees. Conversely, the ship repair business more than doubled its segment result to 143.34 crore rupees, marking growth of 113.3 percent. Despite the weaker earnings, the company announced an interim dividend of 3 rupees per equity share for financial year 2027, representing a 60 percent payout on the 5-rupee face value. November 16, 2026, is set as the record date, with payment scheduled on or before December 9, 2026.

Brokerage View

Antique Stock Broking lowered its target price on the stock to 1,407 rupees from 1,671 rupees while maintaining a hold rating. The brokerage cited execution challenges, expensive valuations, and the shipbuilding division's loss as key concerns, though it noted that a sizeable order book still offers medium-term revenue visibility.

Context

Public sector undertakings in the defence sector often rely on large, long-term government orders that can cause uneven quarterly financial results depending on project execution stages. Shipbuilding projects involve heavy upfront costs and lengthy completion timelines, which frequently lead to fluctuations in quarterly margins and profitability.