Why did the stock of Cochin Shipyards rally so sharply on Tuesday 23 February?
Answer
Answer
Cochin Shipyards is a public sector undertaking specializing in building ships, sea vehicles for the armed forces and also into ship repair services. Cochin Shipyard stock saw a very sharp 11% appreciation on 23 Feb after the company received several high value orders from the Indian Navy. Cochin Shipyards is a major supplier to the Indian Naval Forces.
The Indian Navy has declared Cochin Shipyards the lowest bidder in the tender floated by the Navy after a comparative analysis of various bids. These bids are for the construction of 6 Next Generation Missile Vessels (NGMV), which will be customised to the unique needs of the Indian Navy.
It is estimated that the value of these orders could be in the vicinity of Rs.10,000 crore overall. However, the Indian Navy has clarified that this is only indicative of the eligibility and the final contract placement would be subject to other stringent formalities. The stock of Cochin Shipyards is trading at around Rs.383, fairly close to its 52-week high price of Rs.396 per share. The order talks did contribute to the rally in a big way.