Rs 94,000 crore order book: President of India-backed multibagger aerospace & defence stock hit 52-week high as Board is likely to announce dividend

The stock gave multibagger returns of 175 per cent in just 1 year and a whopping 955 per cent in 3 years.

Hindustan Aeronautics Limited (HAL) informed that the company's board of directors will convene a meeting on Wednesday, June 26, 2024, to discuss, among other items, the recommendation for a final dividend for the financial year 2023-24. In accordance with their Insider Trading Policy, to prevent unfair advantage, trading in HAL securities will be closed immediately for all insiders, including designated persons, connected persons, and their immediate relatives. This trading blackout will remain in effect for 48 hours after the official announcement of the board meeting's outcome.

The Ministry of Defence (MoD) initiated the procurement process for 156 indigenously developed Light Combat Helicopters (LCH) by issuing a Request for Proposal (RFP) to Hindustan Aeronautics Limited (HAL), the state-run aerospace company. The helicopters will be divided between the Indian Army and Indian Air Force, with 90 slated for the Army and 66 for the Air Force. This acquisition aims to bolster India's defence capabilities, particularly in high-altitude regions, as the LCH is a 5.8-tonne, twin-engine helicopter equipped for engaging enemy tanks, bunkers, drones and other aerial targets.

Furthermore, ISRO Chairman, S. Somanath, inaugurated new propellant tank production and CNC machining facilities at Hindustan Aeronautics Limited's (HAL) Aerospace Division. This collaboration aims to address the increasing demand for India's Launch Vehicle Mark-3 (LVM3) rockets. The existing capacity allows only two LVM3 launches per year, while ISRO needs six. The new facilities will enable HAL to manufacture the critical components needed to support the production of six LVM3 rockets annually. ISRO and HAL also discussed future collaborations, with Somanath emphasizing HAL's potential for future space missions and Ananthakrishnan highlighting their commitment to developing next-generation launch vehicles and human spaceflight capabilities. The collaboration extends beyond LVM3 production, with HAL symbolically handing over the first Gaganyaan Service Module and LVM-3 Isogrid Version Hardware to ISRO during the inauguration. The new facilities include a Propellant Tank Production Facility for high-performance fuel and oxidizer tanks (essential LVM3 components) and a CNC Machining Facility with advanced machines for precise fabrication of LVM3 parts. This signifies a major step towards India's space ambitions with HAL playing a more prominent role in future endeavours.

Today, shares of Hindustan Aeronautics Ltd gained 0.95 per cent and made a fresh new 52-week high of Rs 5,585.65 per share from its previous closing of Rs 5,533.35. At the closing bell, shares of the company were trading at Rs 5,313.30 per share, down 3.98 per cent.

Also Read: Abu Dhabi Investment Authority bought 5,60,875 shares of this multibagger defence stock with a Rs 600 crore order book; Scrip hit 52-week high!

Hindustan Aeronautics Limited (HAL) is a one-stop shop for India's defence aviation needs, specializing in the design, manufacture, repair, and maintenance of aircraft, helicopters, and their engines, making them a critical supplier for the country's defence program.

According to its Quarterly Results, the net sales increased by 18.2 per cent to Rs 14,768.8 crore, operating profit increased by 62.8 per cent to Rs 6,458.6 crore and net profit increased by 51.1 per cent to Rs 4,296.9 crore in Q4FY24 compared to Q4FY23.  In its annual results, the net sales increased by 12.8 per cent to Rs 30,381.1 crore, operating profit increased by 39.4 per cent to Rs 11,637.7 crore and net profit increased by 30.4 per cent to Rs 7,594.5 crore in FY24 compared to FY23. 

Additionally, the shares of the company ex-traded stock split, dividing each existing Rs 10 equity share into two Rs 5 equity shares on September 28, 2023. Additionally, the company paid a final dividend of Rs 15 per share on August 24, 2023. The President of India’s portfolio owns the majority of the stake i.e., 71.64 per cent as of March 2024. The company has a market cap of over Rs 3,50,000 crore and has been maintaining a healthy dividend payout of 26 per cent.

The company has an order book of Rs 94,000 crore as of March 31, 2024. The stock has a PE of 41x, an ROE of 29 per cent and an ROCE of 39 per cent. The stock gave multibagger returns of 175 per cent in just 1 year and a whopping 955 per cent in 3 years. Investors should keep an eye on this multibagger aerospace & defence stock.

Disclaimer: The article is for informational purposes only and not investment advice.