Dividend Paying Defence Stock: HAL Shares Jump 3% On Delivery Of First LCA Tejas Twin Seater to IAF

Leading aerospace and defence stock, Hindustan Aeronautics (HAl) zoomed by nearly 3% on BSE during Thursday's trade after the company handed over the first LCA Tejas twin seater to the Indian Air Force (IAF). This is a huge boost to self-reliance of India. HAL is among high dividend paying defence stock, and recently the equity shares also turned ex-split in the ratio of 1:2.

HAL shares rallied by at least 2.9% on BSE by hitting an intraday high of Rs 1,971.50 apiece during the Thursday's trade on bSE. The stock continues to be bullish. Year-to-date, HAL shares have gained nearly 53%.

As per the regulatory filing on October 4th, HAL said that it handed over the first LCA Tejas twin seater to the Indian Air Force in the presence of Rakha Rajya Mantri, Ajay Bhatt at a ceremony here.

The minister said, "I am proud to be part of this historic occasion and salute the spirit of HAL which has been spearheading Swadeshi manufacturing in defence."

While unveiling the twin seater LCA, the minister added, "In all, the development of LCA Tejas has also brought about a shift in our approach to defence procurement. It has demonstrated that India has the talent, knowledge and capability to design, develop and manufacture world-class fighters."

C B Ananthakrishnan, CMD (Add!. Charge), HAL said that the company is committed to deliver all the twin seater aircraft pertaining to IOC and FOC contract to IAF in the current financial year."

With this, HAL's CMD said, "we are moving one step closer towards achieving self-sufficiency on the fixed wing segment. These trainers also ensure smooth transition for the pilots from trainer to fighter aircraft in this class."

Also, Chief of Air Staff Air Chief Marshal VR Chaudhari said that IAF would be going forward to procure 97 more LCAs and with this it will have 220 LCAs in its inventory.

The LCA Tejas Twin Seater is a light weight, all weather multi-role 4.5 g~neration aircraft. It is designed to support the training requirements of the IAF and augment itself to the role of a fighter in case of necessity. It is an amalgamation of contemporary concepts arid technologies such as relaxed static-stability, quadraplex fly-by-wire flight control, carefree manoeuvring, advanced glass cockpit, integrated digital avionics systems and advanced composite materials for the airframe. The production of the LCA twin seater variant adds India to the list of very few elite countries who have created such a capability and have them operational in their Defence Forces, another feather in the cap of "Aatmanirbhar Bharat" initiative of Government of India.

HAL turned ex-split in the ratio of 1:2 in the last week of September. The split ratio means that the company's equity shares which had a face value of Rs 10 before September 28, have halved and are trading at a face value of Rs 5 each now. Also, last month, HAL shares turned ex-dividend for a final dividend payout of Rs 15 per share for the financial year 2022-23, amounting to Rs 501.58 crore. For the said fiscal, HAL has paid a first and second interim dividend of Rs 20 per share each, aggregating to Rs 1,337.55 crore. Overall, in FY23, HAL's dividend payout will be to the tune of Rs 1,839.13 crore to shareholders.

Recently, Prabhudas Lilladher has initiated coverage on HAL shares. Giving a Buy rating with a target price of Rs 2,266, the brokerage believes that HAL stands as a strategic investment opportunity, driven by India's advancing air defense capabilities.