Cochin Shipyard 's board of directors has made a significant financing decision, choosing to abandon plans for a US$ 50 million debt issuance in favor of domestic borrowing alternatives.

Strategic Financing Decision

The board's decision represents a notable shift in the company's capital raising strategy. By opting against the international debt instrument, Cochin Shipyard is demonstrating a preference for local financing solutions over foreign currency-denominated borrowing.

Implications of the Board's Choice

The decision to pursue domestic borrowing instead of the US dollar debt issue could offer several advantages for the shipbuilding company. Domestic financing typically eliminates foreign exchange risk, which can be particularly important for companies with primarily rupee-based revenue streams.

This strategic choice also suggests that the company has identified viable domestic financing options that meet its capital requirements. The move away from international debt markets may reflect current market conditions or the company's assessment of relative borrowing costs between domestic and international markets.

Financial Strategy Considerations

By choosing domestic borrowing over the proposed US$ 50 million debt issue, Cochin Shipyard's board appears to be prioritizing financial stability and risk management. This approach aligns with prudent financial management practices, particularly for companies operating primarily in the domestic market.

The decision indicates the board's confidence in India's domestic capital markets and available financing instruments that can adequately support the company's growth and operational requirements.

Cochin shipyard Limited delivered a robust performance in the third quarter of FY2026, demonstrating strong operational execution across its shipbuilding and ship repair segments. The company's Board of Directors approved the quarterly results at their meeting held on January 28, 2026, alongside several strategic corporate decisions.

Financial Performance Highlights

The company's consolidated financial results for Q3FY26 showed solid growth momentum across key metrics:

For the nine months ended December 31, 2025, the company achieved consolidated revenue of ₹353,759.17 lakhs compared to ₹306,230.76 lakhs in the corresponding period last year, representing growth of 15.5%. Net profit for the nine-month period stood at ₹44,002.82 lakhs.

Segment-wise Performance

The company's business segments showed varied performance during the quarter:

The shipbuilding segment demonstrated exceptional growth, while the ship repair segment experienced a decline compared to the previous year's strong performance.

Dividend Declaration

The Board declared a second interim dividend of ₹3.50 per equity share of face value ₹5.00 each (70%) for the financial year 2025-26. Key dividend details include:

Strategic Corporate Initiatives

The company announced two significant strategic moves to strengthen its market position and technological capabilities.

Joint Venture with HBL Engineering Limited

Cochin Shipyard approved the formation of a joint venture company with HBL Engineering Limited to develop electric mobility technology and energy storage solutions in the marine space. The proposed shareholding structure allocates 60% to HBL and 40% to Cochin Shipyard. This collaboration aims to leverage complementary strengths for developing indigenous capabilities in sustainable marine technologies, aligning with the Government of India's Aatmanirbhar Bharat vision.

Acquisition of Conoship International Holding B.V.

The Board approved acquiring 23% equity shares in Netherlands-based Conoship International Holding B.V., a leading ship design and engineering company. Conoship reported group turnover of 4 million Euros for 2024 and serves shipyards worldwide with diverse vessel designs including cargo vessels, tankers, dredgers, ferries, and offshore vessels. This acquisition will help Cochin Shipyard penetrate European coastal and short-sea shipping markets while exploring opportunities in alternate fuel technologies.

Operational Challenges

The company continues to manage the suspended construction of two passenger vessels originally ordered in 2015 by a Union Territory administration at a contract value of ₹819 crore. With approximately 65% construction completed and ₹665.60 crore received in payments, the Ministry of Ports, Shipping and Waterways directed book transfer of the vessels on January 17, 2025, pending Cabinet Committee of Security and Acceptance of Necessity Committee approvals.

Financial Position

The company maintains a strong financial position with consolidated networth of ₹575,481.72 lakhs as of December 31, 2025, compared to ₹541,556.57 lakhs in the previous year. The debt-equity ratio stood at 0.17, while the current ratio remained stable at 1.30. The company continues to hold its AAA credit rating, reflecting strong financial health.

Funding Decision

The Board decided not to proceed with the previously approved US$ 50 million non-convertible senior unsecured fixed rate notes issuance, citing significant changes in economic conditions that made domestic borrowing more cost-effective and changes in sustainability project implementation methodology.

Source: Exclusive content from company filings