Hindustan Aeronautics, a government-owned company operating under the Ministry of Defence and holding Navaratna status, saw its stock surge by 4.15% to reach ₹4,111.15 per share in early trading on Monday.
This uptick was in response to the Indian defence ministry's approval of nine procurement proposals, totaling approximately ₹45,000 crore. Among these proposals is the acquisition of 12 Su-30 MKI fighter jets, which are manufactured by Hindustan Aeronautics Limited (HAL).
In June, the aerospace unit of General Electric (GE) signed a memorandum of understanding (MoU) with Hindustan Aeronautics to produce fighter jet engines for the Indian Air Force. The agreement includes the potential joint production of GE Aerospace's F414 engines in India, and the engines will be used to power Tejas fighter jets.
In July, HAL secured a contract for the supply of two Dornier-228 aircraft to the Indian Coast Guard (ICG), along with the associated engineering support package, at an overall cost of ₹458.87 crore.
During the same month, HAL signed a letter of intent (LoI) with the defence ministry of Argentina for productive cooperation and acquisition of LMU helicopters for the armed forces of the South American country.
The LoI was signed after the visit of Argentinian Defence Minister Jorge Taiana to the HAL facility in Bengaluru, as per the company's regulatory filing.
The Indian Defence Sector, which was so far contributing as a strategic sector, is gradually developing as an economic sector which is capable of contributing to the economic growth of the country.
Under the Atmanirbhar Bharat initiative, the government is facilitating the development of the Indian industry to reduce defence imports as well as dependence on foreign OEMs. Various initiatives of the GoI in recent days have given thrust to the indigenization and indigenous procurement of defence equipment.
Over the next 5–10 years, such reforms will equally help defence PSUs and private industry to take a firm step towards achieving a self-sustaining defence industry in the country, the company said in its FY23 annual report.
In the near future, the Indian defence market will continue to be a prime revenue source for HAL due to projects like LCA Mk1A, LCH, LUH, and HTT-40. In the medium term, the company is also looking forward to diversifying and increasing its presence in UAV, civil MRO and allied operations, digital solutions, and new space segments as strategic initiatives.
Also, the company is focusing on strengthening marketing efforts, expanding its geographical presence, and collaborating with Indian industry and global OEMs to boost export sales.
So far this year, the stock has delivered an impressive return of 58.78%. Furthermore, in CY22, the stock achieved outstanding growth, culminating in a remarkable return of 109%.
In terms of financial performance, the company achieved a 34% YoY increase in its consolidated net profit, reaching ₹814 crore for the quarter ending in June. The revenue from operations witnessed an 8% YoY growth to ₹3,915 crore.
According to data from Trendlyne, HAL maintains a debt-free status, reflecting a strong financial position.
09 analysts polled by MintGenie on average have a 'buy' call on the stock.
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