HAL remains UBS top pick after new order worth Rs 13,500 crore from Minisitry of Defence

Shares of the defence PSU major Hindustan Aeronautics Ltd. (HAL) are in focus in Friday's session (December 13) after the company bagged an order from the defence ministry. In the previous session, the stock closed higher by 0.25 per cent at Rs 4,661.1 per share on the BSE.

The Ministry of Defence has signed a deal with HAL to procure 12 S Su-30MKI aircraft together with the allied equipment. The deal is worth as much as Rs 13,500 crore, inclusive of taxes.

Brokerage view on HAL

Global brokerage UBS has continued with its buy call on the counter with a target of Rs 5,700, implying a potential upside of over 22 per cent. The brokerage said the company received order for SU-30MKI aircraft with order value of Rs. 13, 500 crore and 62.6 per cent indigenisation. This is part of their FY25 order pipeline, noted the brokerage.

UBS noted that year-to-date the brokerage received manufacturing orders of Rs 40,000 crore (including Rs 26,000 crore  of AL -31 FP engines), representing 40 per cent of their FY25 order intake of Rs 1 lakh crore.

Moreover, the brokerage expects defence orders to bunch up in the last quarter of the current fiscal.

Within the PSU space, HAL remains its top pick.

HAL share price performance 

The company's scrip in the last one year has zoomed as much as 69 per cent, while its 3-year return is at 615 per cent.