HAL shares scale life high after company bags Rs 6,800-crore defence ministry deal

Hindustan Aeronautics Limited (HAL) shares touched a lifetime high of Rs 2,887.5 apiece on Wednesday, after the aerospace and defence company sealed a deal worth Rs 6,800 crore with the defence ministry. HAL shares finished the day with a gain of Rs 154 or 5.7 per cent at Rs 2,864 apiece on BSE. 

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"The ministry of defence on March 7, 2023, signed contracts with Hindustan Aeronautics Limited (HAL) and for procurement of 70 HTT-40 basic trainer aircraft in the presence of Defence Minister Rajnath Singh," according to an official statementthe ministry said. 

The HAL will provide 70 HTT-40 aircraft over a period of six years, and the delivery of ships is scheduled to commence in 2026. 

HTT-40 is a turboprop aircraft with good low-speed handling qualities and provides better training effectiveness. It contains nearly 56 per cent indigenous content which will progressively raise to over 60 per cent through the indigenisation of major components and subsystems, according to the ministry. 

Also Read: PM unveils India's biggest helicopter manufacturing facility in Tumakuru

What Sharekhan makes of HAL

“HAL’s execution of manufacturing orders would drive revenues and the company aims for double-digit revenue growth from FY25 onwards. The margins are expected to inch upwards driven by a decline in input costs," brokerage Sharekhan said. 

It also highlighted that HAL has strong government support, proven execution capabilities and healthy cash balance. The stock, according to Sharekhan, trades at a multiple of 15.5 times its earnings per share (EPS) for the year ending March 2024, lower than its listed peers.

Sharekhan maintained a positive view of the stock citing the companyt's robust order pipeline and execution.  

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HAL share price: Historical performance

HAL shares have given multibagger returns in the last one year, growing 115 per cent in value as against a rise of nearly 12.5 per cent in the Sensex index. 

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