Hindustan Aeronautics (HAL), a defence PSU giant with Navratna status, is in focus on Thursday as the company will declare its Q4 results and full-year earnings for FY24. Ahead of its Q4, HAL is advised to buy with a target price set at Rs 5,200 by UBS. This will mean a potential upside of a whopping 24% ahead in the stock. After Q4 earnings, chances are that the outlook on HAL may be modified by brokerages across.
HAL Share Price:
HAL is currently at Rs 4183.65 apiece, with a market cap of Rs 2,79,792.05 crore. Ahead of Q4, HAL touched a new 52-week high of Rs 4,191.85 apiece on May 15.
YTD, HAL shares are up by 48%, while in a year, the stock zoomed by 170%. In 5-years, HAL rallied by 1,202.51%.
In its regulatory filing, HAL said, "This is to inform you that a meeting of the Board of Directors of the Company will be held on Thursday, the 16th May 2024, to consider, inter-alia, the Audited Financial Results of the Company, for the quarter and year ended 31 51 March 2024."
Last month, HAL announced that it recorded the highest-ever revenue from operations of over Rs. 29,810 crores (provisional and unaudited) for FY24, registering a double-digit growth of around 11% as against 9% in the previous financial year. The corresponding figure for the previous year was Rs. 26,928 crores. HAL received fresh manufacturing contracts of over Rs 19,000 crores and ROH contracts of over Rs 16,000 crores during FY 2023-24.
UBS On HAL:
Global brokerage UBS has forecasted a threefold surge in HAL's order book and estimates 25% revenue growth in the manufacturing top-line (50% of revenue) in FY23-27E.
That being said, UBS believes this robust growth would be led by a pick-up in large military orders due to a depleting fleet, a robust supply chain and ready capacity.
Further, the UBS order intake estimate is 100% above the consensus on HAL. Thereby, the brokerage has raised its EPS forecasts by 4-11% for FY25027E."
Also, UBS expects a meaningful increase in new orders over FY25-27E for HAL, given MoD's significant procurement plans along with an increasing production run rate for combat aircraft and helicopters over the next three to five years implying healthy double-digit bottom-line growth in FY24-27E.
Against the backdrop of changing geopolitics, strengthening in domestic supply chain with supportive policies, in UBS' view, should lead to a healthy ramp-up in both manufacturing and MRO (major repair and overhaul) top lines.
Hence, UBS has raised its target price to Rs 5,200 on HAL for 12 months.
HAL Dividend:
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.
In FY23 alone, HAL paid up to 550% dividend amounting to Rs 55 per share.
HAL Stock Split:
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 nor Greynium Information Technologies. The author, nor 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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