Defence PSU giant, Hindustan Aeronautics (HAL) dipped by nearly 3% in the early trade of Thursday, October 17, 2024, creating a buy-on-dips opportunity. HAL, the largest defence company in terms of market cap, recently bagged Maharatna status. Despite the latest drop due to the bear market, HAL's weekly and monthly gains are nearly 2% each. YTD, HAL is up nearly 61%. Brokerage Sharekhan has recommended BUY ahead of its Q2 results.
HAL Share Price:
At the time of writing, HAL stock traded at Rs 4543 apiece, down by Rs 111.70 or Rs 2.40% on BSE. A few minutes ago, the stock price nosedived by Rs 134.7 or 2.9% to hit an intraday low of Rs 4,520 apiece. HAL stock opened at an intraday high of Rs 4692.95 apiece before correcting to the red zone.
The stock's 52-week high and low is at Rs 5,675 apiece and Rs 1,767.95 apiece respectively. While the stock has a price-to-equity ratio of 37.89x and a strong return on equity of 28.29%. HAL is a multi-bagger with gains of 132% in 1-year.
In 2024, so far, the company has delivered two dividends - an interim dividend of 440% worth Rs 22 per share (Ex-date on February 20), and a final dividend of 260% valued at Rs 13 per share (ex-date on August 21). In total, HAL has distributed a 700% dividend worth Rs 35 per share for FY24. This comes after HAL split for the first time in the ratio of 1:2 during September 2023, where the face value of Rs 10 each was cut to Rs 5 each.
HAL Share Price Recommendation:
Brokerage Sharekhan predicts HAL to report sales of Rs 6,199 crore in Q2FY25, registering double-digit growth of 15.3% QoQ and 13.5% YoY. While PAT is predicted at Rs 1,411 crore, which is likely to be up by 14.2% YoY but marginally down by 1.7% QoQ.
HAL is the preferred pick of Sharekhan, and hence it has recommended BUY. The target price is at Rs 5,486 apiece.
Earlier this month, HAL was granted "Maharatna" status by the Department of Public Enterprises, Ministry of Finance, Government of India.
HAL becomes the 14th Central Public Sector Enterprises (CPSE) in India to receive this recognition. This milestone marks a significant achievement for HAL, which is a prominent player in the Indian aerospace and defence sector.
HAL plays a crucial role in India's defence capabilities, focusing on self-reliance in military aviation. The company's developments, like the Light Combat Aircraft (LCA) namely Tejas and the Light Utility Helicopter (LUH), are central to modernizing the Indian Armed Forces. HAL's commitment to innovation and quality has positioned it as a significant player in the global aerospace industry.
In a significant advancement for Aatmanirbhar Bharat, the Ministry of Defence (MoD) signed a contract with Hindustan Aeronautics Limited (HAL) on September 9, 2024, for 240 AL-31FP aero engines for Su-30MKI aircraft, valued at over Rs 26,000 crore. This contract underscores a commitment to indigenous manufacturing, as the engines will be produced at HAL's Koraput Division, bolstering the Indian Air Force's operational capabilities. HAL aims to deliver 30 engines annually over the next eight years, with plans to enhance indigenisation to 63% by the program's completion, significantly increasing local content in repair and overhaul tasks. This initiative emphasizes collaboration with India's defence manufacturing ecosystem, including MSMEs and both public and private sectors, reinforcing the nation's self-reliance in defence production.
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