Monopolies are firms that dominate the market. monopoly companies are those which have no or less market competition due to a single-player presence. Monopoly companies benefit from economies of scale leading to lower average costs. These companies usually control the market and are solo or large players in the market.
Here are three monopoly stocks that have strong guidance for upcoming financial years.
Hindustan Aeronautics Ltd
Hindustan Aeronautics Ltd(HAL) is engaged in the business of manufacturing Aircraft and Helicopters and Repair and maintenance of Aircraft and Helicopters. HAL is the largest defense PSU and Navratna corporation under the Ministry of Defence’s Department of Defence Production.It dominates the india’s aerospace industry with a market share of 100%.
Hindustan Aeronautics Ltd shares have gained 120 percent in the last six months and 204 percent in a year. The company has a market capitalization of Rs 3,29,090 crores.
HAL’s operational revenue surged by 144% quarter-on-quarter, increasing from Rs. 6,061.3 crore in Q3 FY23-24 to Rs. 14,768.8 crore in Q4 FY23-24. Additionally, the company’s consolidated net profit soared by 241.5% QoQ, rising from Rs. 1,261.51 crore to Rs. 4,308.7 crore over the same period.
International brokerage firm, UBS has given a buy call on Hindustan Aeronautics Ltd for a target of Rs 5,200 per share.
UBS anticipates that HAL’s order book will triple by the financial year 2027, with revenue in the manufacturing business expected to grow by 25% over the same period. The manufacturing business constitutes half of HAL’s overall revenue.
In the next six months, HAL is set to deliver 8-10 trainer and fighter variants of the LCA-MK1A (Tejas) in FY25E, which will significantly enhance manufacturing revenue. Following this, deliveries are expected to include 12 new SU-30 MKI aircraft, 156 LCH Prachand (combat helicopter), and 240 AL 31FP engine orders for SU-30 by FY25E, as reported by UBS.
UBS analysts anticipate that around 20-25% of the $60 billion in new orders for HAL could be granted before FY26E, given the current pace of government procurement, strengthened domestic supply chain, and capacity expansion. Looking forward, they predict a threefold increase in HAL’s order book and a 25% revenue growth in manufacturing revenue for FY23-27E.
On Thursday,Hindustan Aeronautics Ltd shares were trading at ₹4,955 per share,up 0.69 percent from the previous close price.
Hindustan Zinc Ltd
Hindustan Zinc Ltd. is the world’s second-largest zinc-lead miner and holds a 78% market share in India’s primary zinc industry. The company was incorporated as Metal Corporation of India in 1966 as a Public sector undertaking.
Currently, the company is a subsidiary of Vedanta Limited which owns a 64.9% stake in the company, while the Government of India holds a 29.5% minority stake.
The management anticipates that production of both mined metal and refined metal in FY25 will surpass that of the previous year, owing to the full implementation of major projects commissioned last year and improved capacity utilization.
Mined metal production is projected within the range of 1,100-1,125 kt, while refined metal production is expected to range from 1,075-1,100 kt.
The company management anticipates that saleable silver production for FY25 will fall within the range of 750-775 MT. Additionally, the projected cost of zinc production for FY25 is expected to range between US$ 1,050-1,100 per MT.
Moreover, the project capital expenditure for the year is estimated to be between US$ 270-325 million.Hindustan Zinc Ltd shares have gained 103 percent in the last six months and 100 percent in a year. The company has a market capitalization of Rs 2,49,019 crores.
Looking at the the financial statements of the company, there was a 3 percent increase in revenue, rising from Rs. 7,067 crores in the December quarter to Rs. 7,285 crores in the March quarter. Conversely, net profits saw a modest 1 percent increase from Rs. 2,028 crores to Rs. 2,038 crores during the same period.
Hindustan Zinc achieved its highest-ever quarterly refined metal production of 273 kt, marking a sequential increase of 6 percent, attributed to improved plant availability, and a 1 percent increase year-on-year. Silver volume also hit a record high in FY24, aligning with management’s operational and financial objectives, reaching 24.0 moz, up 5 percent year-on-year.
In FY24, the company attained its highest-ever mined metal production, totaling 1,079 kt, a 2 percent rise from the preceding year, bolstered by enhanced mined metal grades. Additionally, refined metal production achieved its peak annual level.
On Thursday, Hindustan Zinc Ltd shares were trading at ₹735 per share, down 4.83 percent from the previous close price.
CE Info Systems Ltd
C.E. Info Systems(MapmyIndia) provides navigation, tracking, IoT, analytics, and web mapping services for desktop and mobile devices to companies such as Olx, Flipkart, Uber, Phonepe, and many more.
C.E. Info Systems Ltd is India’s largest navigation platform, which supports a wide range of navigation software and hardware platforms, with a market share of 95% in-dash navigation market.
The company caters to four primary markets: direct customers, the automotive sector, mobile internet, and enterprises and government. Management anticipates achieving a revenue target of Rs 1,000 crore by April-March 2027-28, driven by a tenfold expansion in the Internet of Things (IoT) business. This segment operates on a Software as a Service (SaaS) model integrated with a hardware component.
With an open order book now totaling Rs 1,372 crore, the company recently secured a Rs 400 crore order from Hyundai Kia, specifically for their maps business, scheduled to commence from the July-September quarter, as per company management.
Over the last six months, CE Info Systems shares have experienced an 8 percent decline, and a 89 percent decrease over the past year. The company’s market capitalization stands at Rs 10,729 crores.
On Thursday,CE Info Systems Ltd,shares were trading at ₹1,998 per share,down 0.13 percent from the previous close price.
Written by Omkar Chitnis
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