1. At a Glance
Cochin Shipyard Ltd (CSL) is India’s naval tailor—cutting out ferries, tugs, and frigates like it’s the Paris Fashion Week for warships. Despite slow revenue growth, it’s nearly debt-free, cash-rich, and strategically expanding into inland and defence shipbuilding.
2. Introduction with Hook
Imagine if the Titanic had been built by a PSU, delivered ahead of time, with margins so fat they could float. That’s Cochin Shipyard for you. A company that earns more from interest on cash than some startups earn from actual business.
- Market cap: ₹49,000+ Cr
- Dividend payout: 42.9% (a PSU that actually pays!)
- ROCE: 20%
- Debtor days: down from 34 to 18 (what sorcery is this?)
3. Business Model (WTF Do They Even Do?)
CSL is in 4 main businesses:
- Shipbuilding – From Naval Offshore Patrol Vessels to commercial vessels.
- Ship repair – Refits, upgrades, and maintenance, including aircraft carriers like INS Vikramaditya.
- Marine Engineering Training – Churning out marine professionals via its MTI.
- Advanced Maritime Solutions – Turnkey EPC work, tugs, and cruise ships for Brahmaputra tourism.
Oh, and now they’re making luxury river cruise ships. Ganga mein Titanic, basically.
4. Financials Overview
| FY | Revenue (₹ Cr) | EBITDA (₹ Cr) | Net Profit (₹ Cr) | OPM (%) | EPS (₹) |
|---|---|---|---|---|---|
| 2021 | 2,819 | 727 | 610 | 26% | 23.19 |
| 2022 | 3,190 | 635 | 587 | 20% | 22.29 |
| 2023 | 2,330 | 273 | 334 | 12% | 12.71 |
| 2024 | 3,645 | 885 | 813 | 24% | 30.91 |
| 2025 | 4,528 | 873 | 843 | 19% | 32.04 |
Key notes:
- 3Y CAGR on revenue = 13%
- Profit includes ₹380 Cr “Other Income” (Hello treasury team!)
- Operating leverage is finally showing up
5. Valuation
Let’s play some “What’s this PSU worth?” game:
Method 1: PE-based
- EPS FY25: ₹32
- Fair PE: 30–40x (given PSU + defence + infra combo)
- Fair Value Range: ₹960–1,280
Method 2: EV/EBITDA
- EV/EBITDA of 18–22x on FY25 EBITDA of ~₹873 Cr
- FV Range: ₹1,100–1,400
Method 3: DCF (assuming modest 10% growth, 12% discount)
- Intrinsic value estimates: ₹1,100–₹1,300
Current Price: ₹1,868
Verdict: Premium baked in… for now.
6. What’s Cooking – News, Triggers, Drama
- MoU with HD KSOE (South Korea): Next-gen naval + merchant ship tech tie-up.
- New orders:
- ₹100–250 Cr: Luxury cruise vessels for Brahmaputra
- ₹100–250 Cr: 70T Bollard Pull Tugs for Polestar Maritime
- Hooghly CSL: A subsidiary winning cruise ship contracts
- Record cash pile: ₹1,200+ Cr treasury playing Mozart in the background
7. Balance Sheet
| Metric | Value (₹ Cr) |
|---|---|
| Total Assets | 13,045 |
| Net Worth | 5,611 |
| Debt | 501 |
| Reserves | 5,479 |
| Cash | ~2,000 (across bank + investments) |
Key Takeaways:
- Virtually debt-free
- Negative working capital cycle (hello PSU leverage!)
- Huge capex underway: CWIP still ₹511 Cr (down from ₹2,189 Cr)
8. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Change |
|---|---|---|---|---|
| 2023 | ₹2,051 Cr | ₹(226) Cr | ₹(272) Cr | ₹1,553 Cr |
| 2024 | ₹(173) Cr | ₹478 Cr | ₹(371) Cr | ₹(65) Cr |
| 2025 | ₹(269) Cr | ₹613 Cr | ₹(279) Cr | ₹65 Cr |
Decoded:
- Big swing in operating cash due to lumpy working capital
- Investing in CWIP, infra, new facilities
- Consistently negative financing cash = dividends + buybacks
9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 20.1% |
| ROE | 15.8% |
| OPM | 19% |
| EPS (FY25) | ₹32 |
| PE | 58x |
| Book Value | ₹213 |
| P/B | 8.9x |
Verdict:
- Return ratios – Sweet.
- PE – A bit rich (like that one PSU kid who did IIT and UPSC).
- P/B = Too hot to hold unless they start printing ₹10K Cr revenue.
10. P&L Breakdown – Show Me the Money
| FY | Sales | OPM % | Other Income | PAT | EPS |
|---|---|---|---|---|---|
| 2023 | ₹2,330 Cr | 12% | ₹268 Cr | ₹334 Cr | ₹12.71 |
| 2024 | ₹3,645 Cr | 24% | ₹307 Cr | ₹813 Cr | ₹30.91 |
| 2025 | ₹4,528 Cr | 19% | ₹380 Cr | ₹843 Cr | ₹32.04 |
Note: Without “Other Income”, margins would sink 400bps. Treasury team is the real MVP.
11. Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | OPM % | ROCE % | PE | M.Cap (₹ Cr) |
|---|---|---|---|---|---|---|
| Mazagon Dock | 11,432 | 2,413 | 18% | 43% | 50x | ₹1,21,457 Cr |
| Cochin Shipyard | 4,528 | 843 | 19% | 20% | 58x | ₹49,154 Cr |
| Hariyana Ship | 0.22 | 0.46 | NEG | 3.2% | 48x | ₹76 Cr |
| Laxmipati Engg | 50 | 6.5 | 20% | 29% | 38x | ₹250 Cr |
Verdict: CSL is #2 in size and margins. Mazagon is the king, CSL is the crown prince.
12. Miscellaneous – Shareholding, Promoters
| Shareholder | Stake (Mar 2025) |
|---|---|
| Promoters (GoI) | 67.91% |
| FIIs | 2.88% |
| DIIs | 6.82% |
| Public | 22.39% |
| Total shareholders | 10.11 lakh |
Points to Note:
- Govt stake trimmed from 72.86% to 67.91% (hello OFS?)
- Retail count 10L+ = PSU cult stock confirmed
13. EduInvesting Verdict™
Cochin Shipyard Ltd is that rare PSU which:
- Delivers quality vessels
- Pays dividends
- Manages working capital better than startups
- And still trades like a mid-cap momentum darling
But hey, let’s not ignore:
- 25% of PAT is “Other Income”
- Sales growth hasn’t been breathtaking (6% CAGR over 5 years)
- P/B of 9x needs earnings to explode for current price to sustain
So while the river cruise is smooth for now, keep your lifejackets handy.
Metadata
Written by EduInvesting Research Desk | 18 July 2025
Tags: Cochin Shipyard, Defence PSU, Shipbuilding, Marine Infra, Dividend PSU, EduInvesting Premium
