Initiating Coverage - Hindustan Aeronautics Ltd - ICICI Direct

Hindustan Aeronautics (HAL), the largest defence PSU in India, is engaged in design, development, manufacture, repair, overhaul, upgrade and servicing of a wide range of products including, aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures.

- The company has delivered revenue, EBITDA and PAT CAGR of 7.4%, 12% and 26.5%, respectively, in FY18-22. In FY22, repair & overhaul contributed ~64% to total revenues while manufacturing contributed~30%

Key triggers for future price performance

- Increasing capital outlay in defence with indigenisation has been the focus area of government considering requirement of armed forces of faster procurement of modern equipment

- HAL caters to a large spectrum of aerospace business, which includes design, development, manufacturing and maintenance, repair & overhaul (MRO) of different types of aircraft/helicopters and engines

- Healthy order-book position at Rs. 82,153 crore (~3.3x FY22 revenues), of which manufacturing segment order backlog is at Rs. 61,564 crore (75% of total OB) led by large scale orders of LCA, LCH and ALH). Strong pipeline of Rs. 1.24 lakh crore worth of orders in manufacturing for the next three to four years led by LUH, LCH and engines for Su-30 & MiG-29

- LCA Tejas MK1A deliveries to IAF will start from FY25E; execution of large order backlog of manufacturing and sustained growth in MRO will drive revenue growth in double digits

For details, click on the link below: Link to the report

Shares of Hindustan Aeronautics Limited was last trading in BSE at Rs. 1735.85 as compared to the previous close of Rs. 1769.15. The total number of shares traded during the day was 22145 in over 2134 trades.

The stock hit an intraday high of Rs. 1779.65 and intraday low of 1727.60. The net turnover during the day was Rs. 38593478.00.

Source : Equity Bulls

Keywords

HindustanAeronautics INE066F01012 HAL Aerospace InitiatingCoverage ICICIDirect