Cochin Shipyard Ltd (COCHINSHIP) Q1 FY27 Results Analysis: PAT Falls 19.4%, Margin Compresses 494 bps

Cochin Shipyard Ltd's Q1 FY27 numbers came in soft, with revenue of Rs. 1,094.21 Cr (+2.40% YoY) and PAT growth of -19.37% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Cochin Shipyard Q1 FY27 reported modest revenue growth but a sharp 19.4% PAT decline and 494 bps EBITDA margin compression, driven by higher material costs and finance costs from debt-funded capex. Ship building segment showed strong revenue growth, but ship repair revenues fell and two suspended passenger vessel contracts remain overhangs. Balance sheet remains strong with AAA rating, but debt/equity rose and auditor concerns on suspended contracts and board governance persist.

Key Investment Insights

Key Positives

• Ship building revenue surged 59.47% YoY to Rs.700.04 Cr, with margin improving from 8.29% to 9.13%
• Ship repair PBIT margin remained healthy at 34.25% despite revenue decline
• Net worth grew 6.5% YoY to Rs.6,042.60 Cr
• Unallocated segment turned positive to Rs.28.94 Cr PBIT vs -Rs.52.93 Cr a year ago
• Credit rating remains AAA, and asset coverage ratio for NCDs is 5.72x

Risk Factors

• PAT declined 19.37% YoY to Rs.151.45 Cr, with EPS falling 19.33% to Rs.5.76
• EBITDA margin compressed 494 bps YoY to 17.65%, driven by material cost share rising 1,100 bps to 41.42% of revenue
• Finance costs more than doubled YoY to Rs.25.36 Cr due to higher debt for capex
• Ship repair revenue fell 37.40% YoY to Rs.394.17 Cr as base high, and margin contracted from 44.19% to 34.25%
• Two passenger vessel contracts remain suspended at ~55% completion, with bank guarantees of Rs.1,124.12 Cr pending
• Standalone revenue declined 6.91% YoY, and subsidiaries drove the consolidated growth but contributed only 10.3% of PAT