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Cochin Shipyard IPO: Way2wealth advise investors to SUBSCRIBE to the issue

Way2wealth | 01 Aug, 2017  | Follow Author | Add to my Favourites 
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Company Background

Cochin Shipyard Ltd. (CSL) is the largest public sector shipyard in India in terms of dock capacity, as on March 31, 2015. CSL is primarily engaged in the business of shipbuilding and ship repair. It also offers services in respect of marine engineering training apart from shipbuilding and ship repair. CSL caters to clients engaged in the defence sector in India and commercial sector worldwide. CSL has two docks- dock number one, primarily used for ship repair (Ship Repair Dock) and dock number two, primarily used for shipbuilding (Shipbuilding Dock). The Ship Repair Dock is one of the largest in India with a maximum capacity of 125,000 DWT. The Shipbuilding Dock can accommodate vessels with a maximum capacity of 110,000 DWT.


Valuation And Investment Argument

Over FY15-17, CSL has reported 14.1% and 112.3% Sales and PAT CAGR respectively. The Company has achieved ROE of 16.2% in FY17. At upper band of offer price Rs432, the issue is being offered at a P/E multiple of 18.8xFY17 earnings and PB of multiple of 2.9xFY17 Book value.  We believe issue is being offered at reasonable valuations given a) its strong execution capability and track record b) healthy order book (Rs33bn 1.6xFY17 sales) c) Net debt free – Cash rich balance sheet. We advise investors to SUBSCRIBE to the issue.

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About Way2wealth

Way2Wealth today has established itself as one of India’s ‘Premier Investments Consultancy Firms’, known for making investing simpler, more understandable and profitable for the investors. They offer a wide range of products & services viz: Equity, Derivatives, Currency Futures, Commodities Trading, IPO's, Mutual Funds, Portfolio Management Services & Depository Services.


For more information please write in to [email protected]

Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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