HAL Shares Trade At Record High, Up Over 4%; Market Cap Crosses Rs 2 Lakh Crore First Time

The share price of Hindustan Aeronautics Ltd (HAL) traded at a new 52-week high value of 3078.85 in the early morning trade on Friday. This is the first time that HAL shares have traded at this price. With the sharp jump in the HAL stock price, the market cap of the state-run defence player crossed Rs 2 lakh crore for the first time.

At 11:32 am IST today, shares of Hindustan Aeronautics Ltd were up almost 4% at Rs 3018.45 per share. At this price, the company has a market capitalization of 2,01,866.39 crore. The company has a 52 Wk High and 52 Wk low of 3,078.85 and 1,150.50 respectively.

Why the rally in HAL shares?

Today's rally in HAL shares was seen after Global brokerage UBS commenced Global brokerage UBS has initiated a 'buy' rating on Hindustan Aeronautics (HAL) with a target of Rs 3,600, indicating a 24% upside from the last closing price. UBS believes that HAL is a credible defence compounder in the making. The foreign brokerage has maintained a bullish stance on the stock on grounds that the defence major has sharpened its policy focus and is working to compress the US$60 billion opportunity into 5-7 years.

The brokerage firm highlighted that the new orders will result in a material step-up, with a revenue growth of 16% CAGR.

On November 30, 2023, Defence Acquisition Council (DAC), under the chairmanship of Raksha Mantri Shri Rajnath Singh, accorded approval in respect of Acceptance of Necessity (AoNs) for various Capital Acquisition Proposals amounting to Rs 2.23 lakh crore, of which, acquisition worth Rs 2.20 lakh crore (98% of total AoN amount) will be sourced from domestic industries. This will give a substantial boost to the Indian Defence Industry towards the aim of achieving the goal of 'Aatmanirbharta'.

Since HAL is a prominent domestic player in defence manufacturing in India, the company is likely to benefit from this govt initiative also.

HAL stock price performance:

HAL shares have gained 60.79% in the last six months, while the stock is up 54.49% in the last three months. The last one-year, 2-year, and 3-year returns from the Hindustan Aeronautics Shares are up 139.09%,372.97%, and 552.01% respectively.

About the company:

Hindustan Aeronautics is an Indian public-sector aerospace and defence company. The history and growth of Hindustan Aeronautics Limited is synonymous with the growth of the Aeronautical industry in India for more than 79 years. The Company which had its origin as Hindustan Aircraft Limited was incorporated on 23 Dec 1940 at Bangalore by Shri Walchand Hirachand, a farsighted visionary, in association with the then Government of Mysore, with the aim of manufacturing aircraft in India.

In March 1941, the Government of India became one of the shareholders in the Company and subsequently took over its management in 1942. In collaboration with the Inter Continental Aircraft Company of USA, the Company commenced its business of manufacturing of Harlow Trainer, Curtiss Hawk Fighter, and Vultee Bomber Aircraft.
In January 1951, Hindustan Aircraft Limited was placed under the administrative control of the Ministry of Defence, Government of India.

Hindustan Aeronautics is currently involved in designing and manufacturing fighter jets, helicopters, jet engines and marine gas turbine engines, avionics, software development, spare supply, overhauling and upgrading of Indian military aircraft.

The manufacturing programs underway at HAL are the production of SU-30 MKI, LCA & DO-228 aircraft and ALH-Dhruv, Chetak, Cheetal & LCH Helicopters. The Repair Overhaul (ROH) programs being carried out presently are Jaguar (with upgrade), Mirage (with upgrade), Kiran, HS-748, AN-32, MiG 21, Su-30 MKI, Hawk, Dornier Do-228, ALH, Cheetal, Cheetah and Chetak.