2:1 Stock Split & Rs 94,000 Crore Order Book: Multibagger Defence Company Selects SAFHAL Helicopter Engines for Powering India's IMRH and DBMRH Platforms
The stock gave multibagger returns of 140 per cent in just 1 year and a whopping 570 per cent in 3 years.
Hindustan Aeronautics Limited (HAL) and SAFHAL Helicopter Engines Pvt Ltd (SAFHAL) have signed an airframer contract, to commence joint design, development, manufacture, supply and support of a new generation high-power engine named 'Aravalli' for the 13-ton Medium Lift class, Indian Multi-Role Helicopter (IMRH) and the Deck-Based Multi-Role Helicopter (DBMRH), being designed & developed by HAL. The name 'Aravalli' derived from the mighty mountain range of India, symbolises the aspirations of the country in achieving Aatmanirbharta in critical engine technologies.
This MoU is dedicated to the design, development, production, sales and support of new-generation helicopter engines in India, marking a significant milestone in India's aerospace and defence sector, aiming to enhance the nation's Aatmanirbharta in helicopter engine technology.
Under this strategic contract, SAFHAL will work with its parent companies on cutting-edge engine technologies, ensuring superior performance, reliability and operational efficiency. This collaboration involves state-of-the-art design, advanced manufacturing processes and rigorous testing protocols to meet the highest global standards.
IMRH is a new 13-ton multi-role helicopter designed by HAL to meet the requirements of the Indian Armed Forces. A naval version, the 12.5-ton DBMRH is also being developed for the Indian Navy. The engines will be designed to operate in diverse and challenging environments in which these Helicopters get deployed. Future extension to the civil market for offshore operations, utility, VVIP transport etc., is also planned followed by MRO activities.
Safran Helicopter Engines has been HAL's partner of choice for powering its helicopters, starting with the Artouste engines used in Cheetah and Chetak, followed by the Shakti engine and its variants powering the ALH, LCH and LUH. The present collaboration elevates this time-tested relationship to the next level through the joint design and development of modern state-of-the-art helicopter engines intended for application in Medium Lift Helicopters.
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About Hindustan Aeronautics Ltd (HAL)
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 11 per cent to Rs 4,347.50 crore, operating profit increased by 34.2 per cent to Rs 1,727.06 crore and net profit increased by 76.6 per cent to Rs 1,431.11 crore in Q1FY25 compared to Q1FY24. 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 June 2024. The company has a market cap of Rs 3.17 lakh crore and has been maintaining a healthy dividend payout of 30 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 140 per cent in just 1 year and a whopping 570 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.
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