Shares of this large-cap company jumps around 2 percent in Monday’s trading session after receiving an order worth Rs. 2890 crores for Dornier Aircraft. The shares have delivered a multibagger return of 137 percent to its shareholders in one year.
With a market capitalization of Rs. 2,09,096 crores, the shares of Hindustan Aeronautics Ltd started Monday’s trading session on a higher note at Rs. 3,138 compared to its previous close of Rs. 3,099. During the trading session, the shares hit a high of Rs. 3,184, gaining around 2 percent and are currently trading at Rs. 3,138 apiece.
Such a bullish movement in the share price was observed after the company in an exchange filing announced that the company had signed a contract with the Ministry of Defence for a mid-life upgrade (MLU) of 25 Dornier aircraft along with associated equipment for the Indian Navy worth Rs. 2,890 crores.
Furthermore, the MLU for the Dornier aircraft includes installing avionics systems and primary role sensors and enhancing their operational capability to perform primary roles of maritime surveillance, coastal surveillance, electronic intelligence and development of maritime domain awareness.
Moreover, the defence company mentioned that the Mid Life Upgrade (MLU) of 25 Domier Aircraft is likely to generate employment of 1.8 Lakh Man-days during its execution span of 6.5 years.
Coming onto the company’s financial statement, the revenue increased by 8 percent from Rs. 5,636 crores during the September quarter to Rs. 6,061 crores in the December quarter. In addition, the net profits increased marginally by 1.5 percent from Rs. 1,235 crores to Rs. 1,254 crores during the same timeframe.
As of May 2023, Hindustan Aeronautics Limited has an order book worth Rs. 81,784 Crores, which consists of Manufacturing Contracts, Repair and Overhaul, Design and Development Projects, supply of spares, and exports.
Additionally, ICICI Direct one of the well-known brokerage firms has given a ‘Buy’ target on the company’s stock with a target of Rs. 3,660 indicating a potential upside movement of around 17 percent compared to its current market price.
The investment rationale for providing such a recommendation pertains to the strong order-book position that provides healthy revenue growth visibility over the next 3 years. Further, as per the estimates, Rs. 2 lakh crore worth of contracts are expected to be placed with HAL in the coming 3 to 4 years.
Headquartered in Bangalore, Hindustan Aeronautics was incorporated in 1963. The company is engaged in the business of manufacturing Aircraft and Helicopters and repairing, and maintenance of Aircraft and Helicopters. They are the Indian government’s prime manufacturer of defence machinery in the Aeronautic segment.
Written By Vaibhav Patil
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