HAL Share Price Prediction: Soaring to New Heights on ₹26,000 Crore Order Win
Hindustan Aeronautics Limited (HAL) is making headlines as its share price surges over 5% following a massive ₹26,000 crore order win. The Cabinet Committee on Security has approved the procurement of 240 AL-31 FP aero-engines from HAL, a move that is expected to further strengthen the company’s already robust order backlog.
The contract, which will begin deliveries in a year and be completed over an eight-year period, has caught the attention of investors and analysts alike. Brokerage firm Antique Stock Broking has maintained its “buy” recommendation on the stock, with a price target of ₹6,145. The firm believes that this order will bolster HAL’s order backlog, which stood at ₹94,000 crore at the end of the previous financial year, potentially reaching ₹1.2 lakh crore.
Main Points
HAL Quarterly Results: A Snapshot of Growth
HAL’s quarterly results have been a subject of keen interest among investors. The company has consistently delivered strong financial performance, with the latest quarter (Q1 FY2024) reporting an income of ₹5,083.85 Cr and a profit of ₹1,437.16 Cr. The company’s annual results for the year ending March 31, 2024, showed a total revenue of ₹32,277.68 Cr and a profit of ₹7,621.05 Cr on a consolidated basis.
Analysts have been bullish on HAL share price, with several brokerage firms setting attractive price targets. Antique Stock Broking, for instance, believes that HAL’s shares are “attractively valued” and have the potential for multi-year, double-digit earnings growth, along with a robust return ratio profile of over 20%. According to the research report by MSSV, HAL’s share price target for the year 2024-2030 is as follows:
- Initial Target (2024): ₹3,684
- Mid-Year Target (2024): ₹4,785
- Year-End Target (2024): ₹5,446
The report also provides a month-wise target for HAL’s share price, with the highest target of ₹12,240 set for December 2024.
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HAL’s Order Backlog: A Solid Foundation for Growth
HAL’s strong order backlog is a testament to its capabilities and the trust placed in the company by its clients. The recent ₹26,000 crore order for aero-engines is just the latest addition to an already impressive list of orders. The company has also faced some challenges in executing the large Tejas MK I A order, with delays in engine deliveries by General Electric. However, HAL has assured the Indian Air Force that it will deliver 16 LCA Mk1A jets in the current financial year and 83 by FY2029, despite the initial delivery timeline being pushed back from March 31, 2024, to November 2024.
HAL’s Financials: A Picture of Stability
HAL’s financials have been a source of stability for investors. The company has a market cap of ₹3,17,407 Cr and a debt-to-equity ratio of 0.00, indicating a strong financial position. The company’s return on capital employed (ROCE) stands at 38.9%, while its return on equity (ROE) is 28.9%.HAL’s stock has a price-to-earnings (P/E) ratio of 38.38 and a price-to-book (P/B) ratio of 10.86. The company has a dividend yield of 0.55% and a Piotroski score of 7.00, indicating strong financial health.
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