Buy Multibagger Defence PSU For TP Rs 4731, Shares Tumble 13.61%: CLSA

Leading brokerage firm CLSA has issued outperform call on aerospace & defence sector public sector undertaking (PSU) Hindustan Aeronautics Ltd shares with target price of Rs 4731 per share. Current market price of Hindustan Aeronautics share on BSE is Rs 4364.05 per share. HAL shares hit 4 lower circuits in one day on June 4, 2024 amid major bloodbath on Dalal Street when Sensex tanked over 6000 points. Hindustan Aeronautics shares witnessed attractive rally of 165% in last 1-year and soared 71% in last 6-months. HAL shares declined 13.61% in last 1-week and 11.31% in last 2-weeks.

CLSA also expects the new Modi government to walk-the-talk for the defence 'Make in India' and execute the $43 billion in Indian-made products approved by the Defence Acquisition Council in financial year 2024. More details below:

LIC Stake In HAL: LIC has 1.89% stake in Hindustan Aeronautics. FII/FPI reduced holdings from 12.93% to 12.42% in Mar 2024 quarter. Number of FII/FPI investors jumped from 711 to 769 in March 2024 quarter.

ISRO Chairman Inaugurates HAL Facilities to Support LVM3 Program: According to press release dated June 5, 2024, "S. Somanath, Chairman, ISRO inaugurated state-of-the-art Propellant Tank Production and CNC Machining facilities at HAL's Aerospace Division today in the presence of Mr C B Ananthakrishnan, CMD (Addl. Charge), HAL and senior officers from ISRO and HAL. The newly established facilities will provide a major boost to ISRO's ability to meet its growing production needs, particularly for the Launch Vehicle Mark-3, India's heaviest and most powerful rocket. Currently, the existing capacity allows for only two L VM3 launches per year, whereas ISRO's requirements stand at six launches annually. The facilities will address this gap, enabling HAL to manufacture enough critical components to support the production of six L VM3 rockets per year."

HAL Shares Performance: The 52-week high share price of Hindustan Aeronautics shares on BSE is Rs 5,434.90 per share (as on 03/06/2024) and 52-week low price is Rs 1646.10 per share (as on 06/06/2023). HAL has a market cap of Rs 2,91,856.75 crore. Hindustan Aeronautics shares gained 34.66% in last 3-months, soared 54% year-to-date, jumped 359% in last 2-years, and gave eye-catching returns of 720% in last 3-years. In last 5-years, HAL stock soared 1105%.

HAL Q4: HAL declared growth in Q4 net profit on May 16 amid rising demand for its aircraft from defence ministry. HAL announced a rise of 52% year-on-year (YoY) in net profit to Rs 4309 crore for the quarter ended March 31, 2024. HAL bagged orders worth Rs 17,600 during the quarter, up 135% from an year ago. Its revenue from operations surged 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, Hindustan Aeronautics's consolidated net profit jumped 31% to Rs 7621 crore as against Rs 5,828 crore announced in FY 2023. Revenue from operations during the year rose 13% to Rs 30,381 crore as against Rs 26,927 crore a year ago.

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

HAL Dividend History: HAL declared 11 dividends since March 28, 2019. In last 1-year, HAL declared an equity dividend amounting to Rs 37.00 per share. At the current share price of Rs 4364.05, Hindustan Aeronautics Ltd share offers a dividend yield of 0.75%. Adjusting for Bonus/Splits the dividend yield is 0.68%.

HAL Stock Split History: HAL carried out stock split of shares once since September 28, 2023. HAL last split 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.

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