The stock of Cochin Shipyard is up 4.39% on Tuesday as the company announced that it has been selected as the lowest bidder for a contract of Ministry on Defence. The contract is worth Rs 5,000 crore, it said in an exchange filing dated February 16.
The crucial contract has come as a major milestone for the company, reviving investors’ interest in the stock after falling for four days during the previous trading sessions.
Shares of the Miniratna company were trading at around Rs 1,532.60 on the bourses during 12 PM. The company’s stock surged to its intraday high of Rs 1,575 earlier in the trade after opening at Rs 1550. On Monday, the stock had closed on Rs 1468.20 apiece.
The company said that it has been declared as the L1 bidder in the tender floated by the Ministry of Defence for construction of 5 next generation survey vessels for the Indian Navy.
“We would like to inform that at the meeting held today at the Ministry of Defence, New Delhi, Cochin Shipyard Limited (CSL) has been declared as L1 in the tender floated by the Ministry of Defence for construction of 5 nos. of Next Generation Survey Vessels (NGSV) for the Indian Navy. The estimated total order value is around Rs. 5,000 crore,” it said in the filing.
It further added that the final announcement of the contract will be subject to the satisfactory completion of necessary formalities in this regard, which will be updated in due course.
In the December ended quarter, Cochin Shipyard reported a revenue of Rs 1,165.37 crore and a net profit of 137.69 crore. The value of the defence contract is over four times the company’s top line in the third quarter.
According to the BSE website, the company had a market capitalisation of Rs 40,319.76 as of 12:30 PM on Tuesday.
Incorporated in 1972, the shipbuilding company operates under the Union Government’s Ministry of Ports, Shipping and Waterways.
