1:2 Split Done, Debt-Free Defence Stock HAL To Reward With Rs 22/Share Dividend; CLSA Recommends BUY

Hindustan Aeronautics (HAL), a dominant player in the aerospace and defence segment, has grabbed attention for its upcoming interim dividend payout to the tune of Rs 22 per share ahead. HAL also declared its Q3 results, under which, it garnered single-digit growth in revenue and PAT. It will be HAL's strong order book that has investors and analysts hoodwinked. Right after the Q3 report card, leading global brokerage CLSA recommended buying HAL shares for a target price of Rs 3,225 apiece.

HAL Share Price:

On BSE, HAL shares ended at Rs 2922.75 apiece, up by 2.75% with a market cap of Rs 1,95,466.21 crore on February 13. The stock is currently trading higher by nearly 144% from its 52-week low of Rs 1,200 apiece.

In a year, HAL shares have gained by 137% on BSE. In 5 years, the upside is impressive by 842%.

HAL Dividend:

This will be the first dividend after HAL shares turned ex-split last year. Also, it is the first interim dividend for FY24.

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The first interim dividend is Rs 22 per share having a face value of Rs 5 each for financial year 2023-24. In percentage terms, the payout is 440%.

HAL fixed February 20 as the record date for the payment of the first interim dividend. This will also be its ex-dividend date. To be eligible for HAL's dividend payout, investors must have shares of HAL in their demat account by the end of February 20, 2024.

In FY23 alone, HAL paid up to 550% dividend amounting to Rs 55 per share.

Currently, the stock has a dividend yield of 0.94%.

HAL Q3 Results:

Standalone net profit came in at Rs 1,253.51 crore in Q3FY24, registering a growth of 8.62% from a net profit of Rs 1,153.99 crore in the same quarter a year ago. In Q2FY24, the company reported a net profit of Rs 1,235.30 crore.

Meanwhile, standalone revenue also jumped to Rs 6,060.91 crore in Q3FY24, registering growth against revenue of Rs 5,665.86 crore in Q3FY23 and Rs 5,635.81 crore.

CLSA Recommends BUY On HAL:

The leading global brokerage, CLSA is optimistic about HAL's growth trajectory and share price. The brokerage has recommended 'OUTPERFORM' on HAL for a target price of Rs 3,225 per share.

As per the brokerage, the key point from Q3 was the wait for its biggest engine order of $3.6 billion. While HAL has a $2.6 billion pile of cash, up by 27% year-on-year coupled with depreciating charges.

Also, the consensus recommendation from 11 analysts for Hindustan Aeronautics Ltd. is BUY, as per Trendlyne data. Further, HAL's revenue was higher than the average estimate 3 times in past 3 years.

Additionally, the Trendlyne report also highlighted key fundamentals for HAL's stock analysis. They are:

- Debt to Equity Ratio is zero as the company is debt-free.

- Stock Price rose 138.88% and outperformed its sector by 42% in the past year.

- Price to Earning Ratio is 31.82, lower than its sector PE ratio of 101.03.

- Return on Equity(ROE) for the last financial year was 24.72%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit.

- Promoter Share Holding stayed the same in the most recent quarter at 71.64%.

- Interest Coverage Ratio is 154.33, higher than 1.5. This means that it is able to meet its interest payments comfortably with its earnings (EBIT).

- Promoter Pledges are zero.

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.