Latest news with #CochinShipyard
Economic Times
4 days ago
- Business
- Economic Times
Mutual funds cut Rs 1,700 crore exposure in 9 defence stocks. Too expensive to buy or smart exit?
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Their top picks in the space are BEL and Data Patterns. The multi-billion-dollar boom in defence stocks is showing signs of a slowdown, as mutual funds offloaded a staggering Rs 1,700 crore across nine defence stocks last month — a signal that even the smartest money managers believe valuations have turned dangerously expensive after the post-Operation Sindoor the positive news around increased defence spending following Operation Sindoor , coupled with NATO's defence spending targets creating a double-barrelled opportunity in both domestic and export markets, has now pushed valuations into uncomfortable territory. This has prompted institutional investors to hit the exit selling spree was broad-based, with Solar Industries bearing the brunt with outflows of Rs 952 crore, followed by Zen Technologies at Rs 192 crore and Bharat Forge at Rs 165 crore. GRSE saw selling worth Rs 153 crore, while Cochin Shipyard faced outflows of Rs 120 crore, and Mazagon Dock witnessed exits of Rs 96 crore, according to estimates by Prime Database. Total gross selling stood at approximately Rs 1,713 stark contrast, buying was limited to a meagre Rs 100 crore across seven stocks, including Bharat Dynamics, Unimech, and sell-off has been reflected in share prices, with the Nifty India Defence Index falling around 4% over the past month. GRSE, Astra Microwave, and Cochin Shipyard have reported double-digit losses, while Solar Industries is down 9% and HAL has shed around 3%, underscoring the broad-based nature of the concerns are now front and center, as even the sector's most vocal cheerleaders are beginning to pump the brakes.'We have been avoiding a lot of defence plays... those are the places where we are finding a little bit of overenthusiasm in the marketplace and among market participants,' said Vikas Khemani of Carnelian Asset Management, highlighting the frothy sentiment gripping the caution reflects a broader shift in institutional thinking. "It is not that tomorrow if we find an interesting company where the risk-reward is there, we will be buying those segments also, so I am not making a broad judgment that we will not do anything, but it is just that those are the places where we are finding a little bit of overenthusiasm in the marketplace and market participants," he added, suggesting that selectivity, not blanket avoidance, is the new warning signs are flashing red across the sector, with execution risks emerging as the new worry. Ambareesh Baliga sounded the alarm on what many investors are overlooking: "In fact, I am finding the valuations are a bit expensive at this point of time... the issue would be on delivery, on execution, which not too many people are talking about. They have got huge orders, but how will they execute? I think that is the big issue."Baliga's concerns are particularly acute for the medium term. "The issue is mostly on the defence side of the market because quite a few of them have got order books full for the next six-eight years, and if they are not able to increase their capacity and deliver, that is where the issue would happen," he pointed to HAL as an early warning: "We have already seen that happening in HAL to some extent, that we should see across the other companies." This suggests that the order book visibility that investors have been celebrating could become a liability if companies can't scale up operations to meet recent downgrade of BDL by Motilal Oswal further weighed on sentiment, serving as a wake-up call for investors who had been riding the momentum. The brokerage initiated coverage on Bharat Dynamics with a 'neutral' rating and Rs 1,900 target price, nearly 4% below its then market value, citing "lofty valuations."While the brokerage applauded BDL's strong order pipeline and export growth, it noted that the stock's sharp run-up leaves "little room for near-term upside." The brokerage stated it would "look for lower price points to enter the stock," essentially telling investors to wait for a correction before jumping cautious stance is becoming more common among institutional investors. Even seasoned bulls are turning cautious. Harsha Upadhyaya, CIO-Equity at Kotak AMC, who has been a long-term believer in the defence story, admitted: "While valuations are on the higher side, we are not increasing our position at this point of time... however, in the short term yes, the valuations are on the higher side so one needs to have a little bit of caution."Upadhyaya's comments are particularly significant because Kotak AMC has been building defence positions since the government started focusing on indigenization. "We have been very positive on defence for quite some time now, and we started building our positions when the government started to focus on indigenization, and also larger investments continue to happen into defence," he said, making his current caution all the more easing of tensions in the Middle East, particularly between Israel and Iran, had already begun to dampen sentiment, as geopolitical risks that had supported defence stocks started to the near-term turbulence, the structural story remains compelling for those willing to look beyond the current valuation concerns. The macro backdrop, including NATO's 5% defence spending target by 2035 and recent Defence Acquisition Council approvals worth Rs 1 trillion, continues to provide a solid foundation for long-term remains bullish on the sector's long-term prospects, particularly favoring the Defence Electronics segment: "We prefer the Defence Electronics segment, which shall grow 2–3x of defence budget outlay (7–8% CAGR over next five years) powered by the dual engines of ongoing modernisation and higher localisation content for larger programs in the pipeline for Air Force and Navy."Nuvama highlighted that "over the past three decades, India's defence spending growth rate has been among the highest (~8%) across global defence superpowers due to import embargoes and growing export potential." This translates to an estimated $130 billion opportunity over the next five to seven catalysts remain strong despite valuation concerns. Following Operation Sindoor, the government has approved Rs 400 billion for emergency procurement to fast-track military purchases, with the Ministry of Defence recently clearing emergency procurement worth Rs 20 billion for various platforms. Additionally, the Defence AcquisitionCouncil has approved Acceptance of Necessity (AoN) for 10 proposals amounting to Rs 1,050 Securities expects robust order inflows in FY26, with most companies under its coverage guiding for revenue growth of over 15%. Some, like BDL, Solar Industries, and Azad Engineering, have projected even higher growth in the range of 25–30%.Among its top picks, ICICI Securities lists Solar Industries, Astra Microwave, and Azad Engineering in the private space. Among DPSUs, it prefers HAL, BEL, and the valuation challenge remains very real. Nuvama noted that 'Indian defence stocks across the spectrum have re-rated explosively over the past two to three years on the back of improved visibility,' with 'most private defence stocks now trading at a premium to DPSUs, given their higher earnings CAGR and superior return profile.'For retail investors caught in the crossfire, Aamar Deo Singh, Sr. VP – Research at Angel One, offered practical advice: 'Defence stocks have witnessed a spectacular rally, and post the India-Pakistan conflict, this sector has once again taken off, with some stocks hitting record highs and trading at expensive valuations. So, it would be wise not to invest all at once in this sector. Adopting an SIP approach over the long term would deliver better results.'As the dust settles, the defence sector stands at a crossroads — caught between compelling long-term growth drivers and stretched near-term valuations that have even the most bullish investors hitting the pause button.
Korea Herald
13-07-2025
- Business
- Korea Herald
Korean shipbuilders' global ambitions depend on skilled labor, local support
Korea's top shipbuilders are eyeing expansion in the United States and India to capture rising demand for naval and strategic shipbuilding, but their plans hinge on securing skilled workers and government support to avoid the pitfalls that plagued earlier overseas ventures. The country's two largest players, HD Hyundai and Hanwha Ocean, are pressing ahead with new partnerships and investments. HD Hyundai has teamed up with India's state-run Cochin Shipyard and US shipbuilders Huntington Ingalls and Edison Chouest Offshore. Meanwhile, Hanwha Ocean, backed by an 800 billion won ($582 million) rights offering from its parent Hanwha Aerospace, is pursuing additional overseas opportunities following its acquisition last year of Philly Shipyard in Pennsylvania. Both companies aim to secure early access to surging demand for naval and commercial vessels, especially as countries seek to counter China's growing dominance in global shipbuilding. Experts, however, warned that significant challenges remain in human resources. Despite the appetite for expansion, neither the US nor India currently has the workforce or infrastructure to build large commercial or naval vessels at the scale Korean firms are accustomed to. 'Even if they operate a yard overseas, the first challenge they will face is a lack of process know-how and skilled workers,' said Kim Myung-hyun, an ocean engineering professor at Pusan National University. The US builds only about five commercial vessels a year, compared with a global capacity of roughly 1,300. India accounts for less than 1 percent of the world's shipbuilding output. Such limited domestic industries mean both countries lack not only experienced shipbuilders but also local suppliers of essential components, which can constitute around 60 percent of a vessel's value. 'Ship manufacturing, where adapting to diverse orders is key, still relies heavily on skilled labor trained on-site,' said an industry veteran. 'Even with a shared language and culture, training new workers takes time, so imagine how much harder it was overseas.' Without sufficient skilled labor and local supply chains, Korean shipbuilders risk relying on components and personnel from overseas, undermining the cost advantages of overseas production and potentially adding significant expenses. In response, Korean firms are looking to governments in Washington and New Delhi for support to help bridge these gaps. US President Donald Trump announced in March potential tax exemptions and plans to establish a special White House office dedicated to shipbuilding. India, meanwhile, is investing $2.2 billion in its shipbuilding sector to bolster capacity and competitiveness. Korean companies view these measures as essential for overcoming local constraints and aligning shipbuilding projects with national security and naval expansion goals in both countries. Yet experts warn that government policies are still at an early stage and uncertainties remain. 'For instance, it remains unclear how much of the demand for US naval vessel construction and maintenance will go to Korean shipbuilders, even if they invest in the US, or what specific roles they might be assigned,' said Yang Jong-seo, a researcher at the Overseas Economy Institute of the Korea Export-Import Bank. 'A range of issues, including regulations, the potential role of Korean workers and the scope of local participation, must be clarified. This may require formal talks between governments to ensure Korean firms are not disadvantaged in negotiations.' Despite these plans, the shadow of past failures still looms large. In the 2010s, Korean shipbuilders suffered heavy losses in overseas ventures. Daewoo Shipbuilding & Marine Engineering, now Hanwha Ocean, sold its Mangalia yard in Romania for 29 billion won — about half its initial investment. Hanjin Heavy Industries & Construction and STX Offshore & Shipbuilding, once ranked among the world's top 10 shipbuilders, collapsed under losses at overseas yards in Subic, the Philippines, and Dalian, China. The central lesson is that future success abroad will depend not only on political partnerships but also on building skilled local workforces and stable supply networks, according to experts. 'Relying solely on cheap labor, the yards struggled to compete with China's even lower-cost, government-backed offerings,' the industry veteran said.
Times of Oman
08-07-2025
- Business
- Times of Oman
Cochin Shipyard partners with HD Hyundai to expand footprint in India's booming shipbuilding market
Seoul: India's largest state-owned shipbuilder, Cochin Shipyard Limited (CSL), and HD Korea Shipbuilding & Offshore Engineering (HD KSOE), the shipbuilding division of South Korea's HD Hyundai, have signed a memorandum of understanding (MoU) to jointly expand their global footprint and boost India's shipbuilding capacity, The Korea Herald reported. As per The Korea herald's report, the strategic MoU outlines long-term cooperation between the two companies in multiple areas, including ship design support, equipment supply, technical collaboration, and workforce training. Cochin Shipyard, which operates under a majority government stake and is located in Kerala, has delivered 70 ships in the past five years. It is known for building and maintaining a wide range of vessels, from merchant ships to aircraft carriers, the report added The partnership is expected to enhance CSL's global competitiveness and productivity, while also creating joint opportunities for securing vessel orders both in India and abroad, The Korea Herald reported. "This bilateral partnership is a critical move to strengthen our influence in the fast-growing Indian market and to support domestic equipment suppliers in expanding overseas," an HD KSOE official told The Korea Herald. The collaboration is in line with India's ambitious maritime policies, including the Maritime India Vision 2030 and Amrit Kaal Vision 2047. Earlier this year, India announced a 250 billion rupees (USD 2.92 billion) Maritime Development Fund aimed at boosting port infrastructure, coastal shipping, and shipbuilding. According to market research firm Ken Research, India's shipbuilding market has expanded more than 12-fold since 2022 and is projected to grow at an annual rate of over 60 per cent through 2033.
Yahoo
07-07-2025
- Business
- Yahoo
HD Hyundai signs MoU with CSL to boost shipbuilding capabilities
HD Hyundai's Korea Shipbuilding & Offshore Engineering has signed a memorandum of understanding (MoU) with India's state-owned shipbuilder, Cochin Shipyard Limited (CSL), to foster long-term collaboration in the shipbuilding industry. The MoU will focus on providing design and procurement support for CSL, technical collaboration to boost productivity and meet global quality standards, and workforce training. This agreement also includes exploring new shipbuilding orders both domestically and internationally. India's shipbuilding industry is experiencing rapid expansion, with the market projected to grow at an average annual rate of 60% until 2033. The partnership is in line with India's maritime development strategies: the Maritime India Vision 2030 and the Maritime Amrit Kaal Vision 2047, both of which aim to elevate India's maritime industry. In support of these initiatives, India has set up a Maritime Development Fund of Rs250bn ($2.9bn) and is enhancing policy support for the shipbuilding sector. An HD Hyundai official stated: 'This collaboration will serve as a springboard for both HD Hyundai and CSL to reach new heights, while also marking a turning point in accelerating India's national maritime vision. 'By leveraging HD Hyundai's accumulated technological expertise and experience, we will support CSL in enhancing its global competitiveness, while also seeking opportunities for shared growth with Korean equipment suppliers.' HD Hyundai is also broadening its international partnerships, having signed MoUs with Huntington Ingalls Industries in the US and Edison Chouest Offshore, as well as engaging in defence cooperation with Peru's SIMA shipyard. These efforts aim to create synergies and foster growth in the global shipbuilding industry. HD Hyundai affiliates Avikus and HD Hyundai ENT have signed an MoU to promote the adoption of autonomous navigation technology in the maritime sector. "HD Hyundai signs MoU with CSL to boost shipbuilding capabilities" was originally created and published by Ship Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Business Standard
07-07-2025
- Business
- Business Standard
Cochin Shipyard inks MoU with KSOE for strategic shipbuilding collaboration
Cochin Shipyard said that it has signed a comprehensive Memorandum of Understanding (MoU) with HD Korea Shipbuilding & Offshore Engineering (KSOE), South Korea to establish long term co-operation across various domains of shipbuilding development. KSOE is a global leader in shipbuilding and marine engineering, with proven expertise in designing and constructing commercial vessels, naval platforms, and offshore infrastructure. KSOE oversees the operations of some of the worlds largest shipyards, including Hyundai Heavy Industries, Hyundai Mipo Dockyard, and Hyundai Samho Heavy Industries. The MoU includes the joint exploration of newbuilding opportunities in India and abroad as well as sharing technical expertise to scale up to the global standards in shipbuilding. The collaboration also aims to identify initiatives to enhance productivity and improve capacity utilization. In addition both the parties will work together to upskill and strengthen workforce while also exploring potential collaboration in other shipbuilding-related projects. Cochin Shipyard is primarily engaged in shipbuilding and ship repair, catering to both the domestic and international markets. As of 31 March 2025, the Government of India held 67.91% of the total voting rights in the company. The company's consolidated net profit advanced 10.9% to Rs 287.19 crore on a 36.7% rise in revenue from operations to Rs 1,757.65 crore in Q4 FY25 over Q4 FY24. The counter added 2.08% to settle at Rs 2,057.25 on the BSE.
