- 10 Sep 2024
- ICICI Securities
COCHIN SHIPYARD LAUNCHES TWO ANTI-SUBMARINE WATERCRAFTS FOR NAVY
News: Cochin Shipyard (CSL) has launched two anti-submarine warfare - shallow water crafts (ASW-SWC), INS Mulki and INS Malpe. The company is in process of manufacturing eight ASW-SWC for the Indian Navy. These ASW-SWC ships will be equipped with indigenously developed, state-of-the-art underwater sensors, and are envisaged to undertake anti-submarine operations in coastal waters as well as Low Intensity Maritime Operations (LIMO) and Mine Laying Operations. The ASW SWC ships are 78 m long and displacement is approx 900 tons, with a maximum speed of 25 knots.
Views: Launching of a ship is a critical step in ship-building considering that the major revenue recognition process starts considerably after this step. With the launch of these two ASW-SWC, CSL has launched 5 such ships out of total contract of 8 ships. We expect meaningful recovery in execution of this project after facing some supply chain issues in the last 2 years. The final three ships are also under advanced stages of block fabrication. Order backlog of ~Rs 22500 crore (5.7x TTM revenues) with pick-up in execution, provides strong revenue growth visibility. Order pipeline remains robust in both ship-building (including exports) and ship-repair segments.
Impact: Positive