The shares of this largecap PSU company jumped around 1 percent after reports suggested it is likely to get ‘Maharatna’ PSU status by the end of the year. The stock has delivered more than a 130 percent return to its shareholders in one year.
Price Movement:
With a market capitalization of Rs. 3,11,281 crores, the shares of Hindustan Aeronautics Ltd started Friday’s trading session after on a higher note at Rs. 4,658 compared to its previous close of Rs. 4,641.70.
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During the trading session, the shares hit a high of Rs. 4,690, gaining around 1 percent and are currently trading at Rs. 4,657 apiece.
What Happened:
Such a positive movement in the share price was observed after the reports suggested the public sector defence player could be the next to a ‘Maharatna’ PSU.
As per reports, Hindustan Aeronautics Ltd. (HAL) may just become the next state-run company to be accorded a “Maharatna” status.
The defence company could be upgraded from ‘Navratna’ to ‘Maharatna’ by the end of this year.
Moreover, Oil India was the latest company to be awarded “Maharatna” status by the government, with the designation granted in August of the previous year.
To qualify for Maharatna status, a CPSE must have an average annual turnover exceeding Rs. 25,000 crore over the past three financial years.
Additionally, it should have an average annual net worth of more than Rs. 15,000 crore during the same period, and its average annual net profit after tax must be over Rs. 5,000 crore in the last three years.
After getting the Maharatna status, the companies can invest between Rs. 1,000 crores to Rs. 5,000 crores in a single project without requiring prior government approval.
They are also allowed to invest up to 15 percent of their net worth in projects without needing permission from the government.
Furthermore, Maharatna PSU can also undertake mergers and acquisitions in India and abroad. They can also offer competitive financing in their sector.
Financials:
Looking at the company’s financial statements, the revenue decreased by around 71 percent from Rs. 14,769 crores during the March quarter to Rs. 4,348 crores in the June quarter. On the other hand, the net profits declined by 67 percent from Rs. 4,309 crores to Rs. 1,437 crores during the same period.
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Recent Developments:
The Ministry of Defence (MoD) of India has signed a significant contract with Hindustan Aeronautics Limited (HAL) for the procurement of 240 AL-31FP aero engines intended for the Su-30MKI aircraft at a cost of over Rs. 26,000 crores.
Order Book:
As of Q1 FY25, Hindustan Aeronautics Ltd (HAL) has a robust order book valued at approximately Rs 94,000 crores. This figure reflects HAL’s strong position in the defence sector, supported by a solid pipeline of contracts and expected future orders.
Company Profile:
Headquartered in Bangalore, Hindustan Aeronautics Limited (HAL) is an Indian aerospace and defence company that designs, develops, manufactures, repairs and overhauls aircraft, helicopters, engines and related systems like avionics, instruments and accessories for military and civil markets.
Written By Vaibhav Patil
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