1:2 Split, Rs 37 Dividend: Defence PSU HAL Gains 211.12%, 2 Analysts Recommend Call

Large cap PSU operating in aerospace & defence sector, Hindustan Aeronautics Ltd shares continue to remain unstoppable. HAL shares have been hitting back-to-back 52-week high since May 14 and witnessed stunning rally of 17.30% in last 1-week. HAL shares today (May 21) hit 52-week high to Rs 4771.20 per share with 0.89% gain at 11:51 am. Hindustan Aeronautics shares offered eye-catching return of 1370% in last 5-years.Hindustan Aeronautics declared its margin at 40% for March quarter as against 26% margin for the corresponding quarter of last year. EBITDA for the March quarter surged by 81.8% to Rs 5,901.1 crore as compared the last year's EBITDA of Rs 3245.8 crore.

Life Insurance Corporation Of India (LIC) is 1.89% in HAL with 12,628,239 shares of the company. It is important to note that HAL already declared equity dividend amounting to Rs 37.00 per share in last 1-year and conducted stock split in the ratio of 1:2 in the year 2023. The company has a market capitalisation of Rs 3,21,610.55 crore. More details below:

PL Assigns Hold Call: According to the brokerage firm latest report dated May 21, 2024, "Order book stands at ~Rs940 bn (3.2x FY24 revenue). It is expected to book orders worth ~Rs470bn in FY25 for 12 LUH, 12 Su-30 aircraft, and 240 AL 31-FP engines. It also has a robust order pipeline worth ~Rs1.6-1.7trn for the next ~3 years including 97 Tejas Mk1A, 60 Naval UHM, 156 LCH Prachand, 43 ALH Dhruv, and Dornier aircraft upgrades. These contracts provide revenue visibility until at least FY32. Thus, manufacturing execution should scale up strongly over the next 7-8 years. Maintain Hold with TP Rs 4,515 valuing the stock at 40x FY26e EPS on the back of strong long-term revenue visibility."

Jefferies Upgrades Target Price, Recommends Buy: The analyst upgraded the target price of Hindustan Aeronautics Ltd share to Rs 5,725 per share from the earlier target price of Rs 3900. The analyst said, "margins should be largely sustainable as cost optimization is a focus." The analyst said that the higher margin service income and aircraft deliveries should see double-digit revenue growth for 4-6 years. Export visibility is witnessing improvement."

HAL Q4: It announced a surge in Q4 net profit on May 16 amid soaring demand for its aircraft from defence ministry. The defence PSU declared a surge of 52% year-on-year (YoY) in its net profit to Rs 4309 crore for the quarter ended March 31, 2024. According to Elara Capital, the company secured orders worth Rs 17,600 during the quarter, up 135% from an year ago. Its revenue from operations zoomed 18% YoY to Rs 14,769 crore in Q4 as against 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.

Hindustan Aeronautics Share Performance: The PSU's 52-week high share price on BSE is Rs 4870.80 per share (as on 21/05/2024) and 52-week low price is Rs 1490.38 per share (as on 25/05/2023). Hindustan Aeronautics shares gave return of 69% year-to-date, soared 123% in last 6-months, gained 443% in last 2-years, and surged 831% in last 3-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 4729.30, HAL offers a dividend yield of 0.78%. Adjusting for Bonus/Splits the dividend yield is 0.62%.

HAL Stock Split: The PSU carried out stock split/sub-division of shares once since September 28, 2023. HAL 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:

The stock has been picked from the brokerage report of Jefferies and Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.