HAL Share Price Surges After ₹26,000 Crore Order Win, Analysts Bullish on Long-Term Growth
Shares of Hindustan Aeronautics Limited (HAL) have been in focus after the company received a ₹26,000 crore order for 240 AL-31 FP aero-engines from the Cabinet Committee on Security. The deliveries for the order are expected to begin in a year and be completed over an eight-year period.
The stock has surged over 5% following the announcement, trading at ₹4,837.5 as of September 3, 2024. However, the share price is still down 17% from its record high of ₹5,674.
Main Points
Challenges in Tejas Deliveries, but Robust Order Backlog
Despite the positive news, HAL has faced some challenges in delivering the new Tejas Light Combat Aircraft (LCA) for the current financial year and beyond. This is attributed to delays in engine deliveries from General Electric.
HAL had assured the Indian Air Force that it would deliver 16 LCA Mk1A jets in FY 2024-25 and 83 by FY 2029. However, the first delivery, initially scheduled for March 31, 2024, has been pushed back to November 2024.
Nevertheless, the ₹26,000 crore order will further bolster HAL’s already strong order backlog, which stood at ₹94,000 crore at the end of FY 2024 and is expected to reach ₹1.2 lakh crore.
Brokerage firm Antique Stock Broking has maintained its “buy” recommendation on the stock with a price target of ₹6,145. The firm believes that despite the near-term volatility in earnings due to Tejas delivery challenges, HAL shares are “attractively valued” with a multi-year, double-digit earnings growth potential and a robust return-ratio profile of over 20%.
Key Financials and Valuation Metrics
As of September 12, 2024, HAL’s share price was ₹4,641.70, with a market capitalization of ₹310,425.3 crore. The company’s P/E ratio stands at 37.7, and the PB ratio is 10.7. HAL reported an operating revenue of ₹30,813.23 crore on a trailing 12-month basis. The company’s Return on Equity (ROE) is approximately 27.18%.
Upcoming Corporate Actions and Dividends
HAL’s board is scheduled to meet on August 14, 2024, to announce the quarterly results. The company has also declared a final dividend of ₹13 per share (260%) for FY 2024.
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
