Defence PSU, Hindustan Aeronautics (HAL) is the top bet in the sector after its Q4 results for FY24. At the latest, Choice Broking and Jefferies have advised BUY on the Navratna company owing to HAL's impressive earnings, strong market position and limited competition in the sector. The highest target price on HAL is Rs 5,575, indicating a potential upside of 21%.
HAL Share Price:
In the special live trading session on Saturday, HAL's stock accelerated to hit a new 52-week high of Rs 4,752.00 apiece on BSE. The stock ended at Rs 4729.30 apiece, up by 4.4% with a market cap of Rs 3,16,283.76 crore.
YTD, and HAL shares have zoomed by 67% on BSE.
HAL Shares Long-Term Target Prices:
Global brokerage Jefferies has recommended BUY on HAL shares while raising its target price to Rs 5,725 ahead. Earlier, Jefferies' target was Rs 3,900 for the company.
Meanwhile, Choice Broking said, "We have a bullish outlook on HAL, given its strong market position and limited competition from the private sector, largely due to the high capital requirements and lengthy development timelines in this industry."
Choice further explained that HAL's strategic diversification into the civilian sector and anticipation of major future orders for platforms like LCA Tejas Mk-1A, LCA Tejas Mk-2, LUH, LCH, Su30, and HTT-40 in the near to medium term further bolster its growth prospects. The company is strategically positioned as the sole domestic supplier and has formed valuable collaborations with industry giants such as Safran, Airbus, and GE.
Furthermore, Choice Note said, "HAL's impressive order book, standing at approximately Rs.940 billion-about 3.1 times the FY24 revenue-reinforces its robust growth narrative. Given these strengths, we rate the stock as "BUY" with a target price of Rs.5,042, based on a 38x of FY26E EPS. This valuation reflects the expected influx of new orders like Tejas Mk-1A, Sukhoi-30MKI upgrades, ALH Dhruv helicopters, and various aerospace structures for PSLV and GSLV, along with a sharp focus on export opportunities."
On the consolidated basis, HAL reported revenue from operations of Rs 14,768.75 crore in Q4FY24, rising from Rs 12,494.67 crore in Q4FY23, and more than doubling from Rs 6,061.28 crore in Q3FY24. Meanwhile, PAT stood at Rs 4,308.68 crore, robust growth from a profit of Rs 2,831.19 crore in Q4FY23, and Rs 1,261.51 crore in Q3FY24.
FY24 revenue stood at Rs 30,381.08 crore versus Rs 26,927.46 crore in FY23. While PAT also climbed by Rs 7,620.95 crore as against Rs 5,827.73 crore in FY23.
HAL Other Key Factors:
As per Trendlyne data, the consensus recommendation from 13 analysts for Hindustan Aeronautics Ltd. is BUY. Of the total consensus, 7 analysts have suggested 'STRONG BUY' and 4 analysts have given 'BUY' on HAL stock.
Earlier, in February this year, HAL turned ex-dividend for its first interim dividend of Rs 22 per share having a face value of Rs 5 each for FY24. Its dividend payout was 440% in percentage terms. This was also its first dividend payout since HAL shares turned ex-split in the ratio of 1:2.
HAL shares turned ex-split on September 28, 2023, for the ratio of 1:2. That meant HAL's share price face value was reduced to Rs 5 per share compared to earlier Rs 10 per share.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns. in advises users to consult with certified experts before making any investment decision.
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