HAL Share Price: At 0.93% Yield, Top Defence Stock To Consider Interim Dividend On Monday, Q3 Preview; BUY?

Aerospace and defence stock, Hindustan Aeronautics is the star of the sector with a huge order book and massive returns to its shareholders. HAL is back in the limelight due to its upcoming Q3FY24 earnings report and interim dividend proposal which will be considered for approval on February 12. Last week, HAL touched a new record high.

HAL Share Price:

On February 9th, HAL share price ended at Rs 2,965.65 apiece, down by 4.22% on BSE with a market cap of Rs 1,98,335.26 crore. But during the trading session of this day, HAL also touched a new record high of Rs 3,130 apiece before correcting.

Compared to its 52-week low of Rs 1,180 apiece, HAL has become a multi-bagger with gains of over 151% as of now on BSE.

HAL Interim Dividend:

HAL is among the top dividend-paying defence stocks. The company's board are scheduled to meet on February 12, 2024, to consider the declaration of the first interim dividend for the financial year 2023-24. This will be the first interim dividend for FY24.

Also, for the same, the company fixed February 20, 2024, as the record date to determine eligible shareholders.

In FY23, the company paid dividends up to 550% amounting to Rs 55 per share.

At the current market price, it has a dividend yield of 0.93%.

HAL Results:

HAL will announce its Q3 results for FY24 on February 12 as well. In Q2FY24, the company reported a net profit of Rs 1,236.67 crore, while revenue from operations stood at Rs 5,635.70 crore.

In its Q3 preview report, Elara Capital said, HAL's revenue could jump by 7%. The brokerage expects HAL's revenue from operations to come in at Rs 6,050.5 crore in Q3FY24, yp by 7.4% QoQ and 6.8% YoY. While EBITDA is factored at Rs 1,360.4 crore, down by 11.4% QoQ but up by 38% YoY. PAT is estimated to come to around Rs 1,102.1 crore, down by 11.5% QoQ but up by a whopping 51.4% YoY.

Meanwhile, Prabhudas Lilladher in its preview note said, "We expect Hindustan Aeronautics to grow 9.2% YoY, driven by continued execution of a strong order book. EBITDA margin is likely to jump ~460bps YoY to 22.0% owing to a sharp reduction in provision expenses. Status of contract finalization for orders in the pipeline such as AL 31-FP and RD-33 engines as well as ALH Rudra and LUH helicopters will be key monitorables.

HAL Share Price Targets:

In January 2024, UBS initiated BUY coverage on HAL for a target price of Rs 3,600. In its note, UBS said, "After three years of flattish growth, we think HAL is set to triple its order book from Rs0.8tn in FY23 to Rs2.4tn in FY26E. We believe HAL is on course to re-rate by a similar magnitude to BHE in the past decade if it gets its execution right. Initiate Buy with a PT of Rs3,600.00, based on a 32x PE, in line with BHE's current 12m fwd PE."

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