1:2 Split: Large Cap Defence PSU Rises 130% In 6-Months, Buy For TP Rs 5200: UBS

Leading brokerage firm UBS has upgraded target price of large cap defence PSU Hindustan Aeronautics Ltd shares to Rs 5200 from Rs 3,600 per share. Hindustan Aeronautics shares continue to witness back-to-back 52-week high and today it touched its third 52-week high in a row. Current market price of Hindustan Aeronautics Ltd share on BSE is Rs 4949.65 per share. Hindustan Aeronautics stock hit upper circuit on May 16. The company has a market capitalisation of Rs 3,31,020.22 crore. HAL shares offered return of 28.6% in last 2-weeks and soared 130% in last 6-months only. Life Insurance Corporation Of India (LIC) is 1.89% in HAL with 12,628,239 shares of the company.More details below:

UBS Bullish On HAL: UBS analysts highlighted the factors behind upgrading the target upgrade for HAL shares stating, "We believe this is justified by HAL's better order book scale-up, lower competition, and greater optionality in exports." For the next 6-months, the defence is poised to deliver 8-10 trainer and fighter versions of the LCA-MK1A (Tejas) in FY25E, enhancing manufacturing revenue. Additionally, order for 12 new SU-30 MKI aircraft, 156 LCH Prachand (combat helicopters), and 240 AL 31FP engines for the SU-30 is likely to be delivered by FY25E.

Of the $60 billion in new orders for HAL, UBS analysts think that nearly 20-25% could be awarded before FY26E, amid the ongoing pace of government procurement, a robust domestic supply chain, and capacity build-up. They projected a three-fold growth in HAL's order book and a 25% revenue growth in manufacturing topline in FY23-27E.

HAL Q4: It declared a rally in Q4 net profit on May 16 amid rising demand for its aircraft from defence ministry. HAL announced a growth of 52% year-on-year (YoY) in its net profit to Rs 4309 crore for the quarter ended March 31, 2024. According to reports, HAL bagged orders worth Rs 17,600 during the quarter, up 135% from an year ago. Its revenue from operations soared 18% YoY to Rs 14,769 crore in Q4 as compared to Rs 12,494 crore in the corresponding quarter of last year. For the whole year, its consolidated net profit zoomed 31% to Rs 7621 crore as against Rs 5,828 crore announced in FY 2023. Meanwhile, revenue from operations during the year rallied 13% to Rs 30,381 crore as against Rs 26,927 crore a year ago.

HAL announced its margin at 40% for March quarter as against 26% margin for the similar quarter of last year. EBITDA for the March quarter zoomed by 81.8% to Rs 5,901.1 crore as compared the last year's EBITDA of Rs 3245.8 crore.

Hindustan Aeronautics Share Performance: Its 52-week high share price on BSE is quoted at Rs 4992.85 per share (as on 23/05/2024) and 52-week low price is Rs 1490.38 per share (as on 25/05/2023). Hindustan Aeronautics shares gained 75% year-to-date, soared 224% in last 1-year, zoomed 445% in last 2-years, gained 865% in last 3-years, and surged 1396% in last 5-years.

HAL Dividend History: It declared 11 dividends since March 28, 2019. In last 1-year, HAL announced an equity dividend amounting to Rs 37.00 per share. At the current share price of Rs 4949.65, HAL offers a dividend yield of 0.75%. Adjusting for Bonus/Splits the dividend yield is 0.60%.

HAL Stock Split: HAL conducted stock split of shares once since September 28, 2023. It last split the face value of its shares from Rs 10 to Rs 5 in 2023 and traded ex-split as on September 28, 2023.

HAL About: Hindustan Aeronautics Ltd (HAL) is an aerospace and defense company, owned by the government of India. The company develops, designs, manufactures, and supplies aircraft, helicopters, avionics, and communications equipment for military and civil markets, among others.

Disclaimer:

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