Shares of Hindustan Aeronautics Ltd. in today's trade surged as much as 14% to Rs. 1048 apiece on the NSE. This is after the cabinet has approved procurement of Tejas aircraft from the Indian Air Force. As per a statement from PIB, there has given an approval to procure 73 Tejas Mk-1A fighter aircraft and 10 Tejas Mk-1 trainer aircraft. The total cost for the aircraft will be Rs 45,696 crore, along with design and development sanctions worth Rs 1,202 crore, it said.
"The manufacturing of light combat aircraft by Hindustan Aeronautics will give a further push to Atmanirbhar Bharat initiative and boost indigenisation of defence production and the defence industry in the country," the note said. Around 500 Indian companies, including micro, small and medium enterprises in the design and manufacturing sectors, will be working with HAL in this procurement. The LCA-Tejas programme will act as a catalyst for transforming the Indian Aerospace manufacturing ecosystem, Defence Minister Rajnath Singh said in a tweet on Wednesday
Overall it's a positive development but its implementation shall be a major problem, said Avinash Gorakshakkar of Profitmart Securities. As per Bloomberg consensus, the analysts have been recommending a buy on the stock and it is currently 12.6% higher than its 12-month target price of Rs. 885 per share.