Cochin Shipyard Limited has executed a Share Purchase Agreement to acquire a 23% equity stake in Conoship International Holding B.V., a Netherlands-based ship design and engineering firm. The transaction, valued at €2.30 million, was finalized on September 24, 2026, following board approval earlier this year.

This strategic move aims to help the Indian shipbuilder penetrate the European coastal and short-sea shipping segments with advanced design solutions. Cochin Shipyard and Conoship will jointly explore opportunities in alternate fuels for short-sea vessels, coastal shipping, inland waterways, and other marine services.

Deal Structure and Timeline

The acquisition involves cash consideration and is structured as a non-related party transaction. Clearance from the Department of Investment and Public Asset Management (DIPAM) has been obtained. The company expects the acquisition to be completed within two months of the agreement signing.

Target Company Financials

Conoship International Holding B.V., incorporated in February 2014, specializes in designing general cargo vessels, tankers, dredgers, ferries, and offshore vessels. The target’s financial performance shows consistent growth in group turnover over the last three years.

What the Numbers Show

The valuation implies a price-to-sales multiple of approximately 0.57x based on Conoship’s FY24 group turnover excluding intercompany adjustments (€2.30 million consideration / €4 million revenue). This suggests a strategic entry point relative to the target’s current revenue base, prioritizing access to European design capabilities and technology partnerships over immediate earnings accretion, given the modest net profit of €0.22 million.

Cochin Shipyard reported a net profit of ₹151.45 crore for the first quarter of FY27, down from ₹187.82 crore in the corresponding period last year. Revenue rose 2.4% to ₹1,094.21 crore, supported by strong order inflows and ongoing deliveries.

Financial performance

The company’s EBITDA margin for the quarter stood at around 24%, while the PAT margin was approximately 14%. Profit before tax (PBT) declined to ₹202.49 crore from ₹249.54 crore in Q1FY26. Management attributed the lower margins compared to previous years to the absence of high-margin aircraft carrier refit projects and reduced interest income from cash reserves following capital expenditure on the International Ship Repair Facility (ISRF) and new drydock.

Joint venture with Drydocks World Dubai

The board approved a joint venture with Drydocks World Dubai, a DP World firm, to operate the ISRF in Kochi. Each partner will hold a 50% stake. Cochin Shipyard will transfer the ISRF on a slump sale basis for a consideration of not less than ₹1,800 crore. The company will receive 50% of this amount in cash and the remaining 50% in shares of the joint venture company.

The definitive agreements are proposed to be signed on September 11, 2026, with implementation expected before the end of the current financial year. The facility, located at Willingdon Island, has a third-party valuation of ₹1,800 crore, representing about 30.55% of Cochin Shipyard's net worth of ₹5,892.83 crore as on March 31, 2026.

Operational updates and deliveries

Cochin Shipyard delivered three vessels in Q1FY27, including the third Anti-Submarine Warfare Shallow Water Craft for the Indian Navy, the second multipurpose vessel for a German client, and a double-ended Ro-Ro ferry for Kochi Municipal Corporation. Its subsidiary, Udipi Cochin Shipyard, delivered three vessels, including two general cargo vessels to Wilson Group, Norway, and a tug to Polestar Maritime.

Management plans to deliver 10 vessels in FY27. The order book currently stands at approximately ₹22,000 crore. The company is the lowest bidder (L1) for five next-generation survey vessels for the Indian Navy, valued at approximately ₹5,000 crore, which would raise the order book to around ₹27,000 crore upon contract signing expected in November 2026.

Strategic initiatives and capex

Cochin Shipyard is developing a ship repair facility at Vadinar, Gujarat, jointly with Deendayal Port Authority, targeting operationalization within 36 months of environmental clearance. It also emerged as the successful bidder for a 30-year lease at V.O. Chidambaranar Port in Tuticorin for a hybrid shipbuilding facility against a one-time payment of ₹305.76 crore.

The company plans to develop a Block Fabrication Facility independently at a smaller scale after failing to reach terms with HD KSOE. Additionally, it formed a joint venture with HBL for green maritime propulsion systems, holding a 40% stake, targeting revenue of ₹640 crore by the fifth year.

What the Numbers Show

The decline in PAT despite revenue growth highlights a shift in the revenue mix. Higher-margin defense refit projects and interest income from surplus cash have diminished as capital is deployed into new facilities like the ISRF and drydock. With shipbuilding constituting ~70% of turnover (10-12% margin) and ship repair ~30% (20-22% margin), the blended EBITDA margin guidance of 14-15% reflects this structural change from the previous high-margin cycle.