Rs 81,784 crore order book & DIIs increase stake: Heavy buying in this President of India backed-multibagger aerospace & defence stock; Hit fresh 52-week high!

The stock gave multibagger returns of 175 per cent in just 1 year and a whopping 700 per cent in 3 years.

Today, the stock market was trading in green with the BSE Sensex Index and the NSE Nifty-50 Index up over 0.40 per cent each. Along with the market in green, shares of Hindustan Aeronautics Ltd gained 4.2 per cent and made a fresh new 52-week high of Rs 4,087.05 per share from its previous closing of Rs 3,923.45 per share with a spurt in volume by more than 2.50 times on BSE.

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.

In a major boost to India's self-reliance in defence, Hindustan Aeronautics Limited (HAL) secured a Rs 2,890 crore contract from the Ministry of Defence to upgrade 25 Dornier Do 228 aircraft and their equipment for the Indian Navy. This Mid-Life Upgrade (MLU) will equip the Dorniers with modern avionics and sensors, significantly enhancing their capabilities in critical missions like maritime surveillance, coastal security, and electronic intelligence.

The upgraded aircraft will also be able to perform secondary tasks like search and rescue, medical evacuation, and communication relay. This 6.5-year project is expected to generate 1.8 lakh man-hours of employment and will rely heavily on indigenous sources for major systems and equipment, contributing to the "Atmanirbhar Bharat" initiative under Make-in-India. This comes after another MoD contract with HAL worth Rs 8,073.17 crore to acquire 34 advanced ALH Dhruv Mk III helicopters for the Army and Coast Guard, further supporting domestic defence production and involving Indian small and medium enterprises (MSMEs).

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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.

According to the Quarterly Results, the net sales increased by 7 per cent to Rs 6,061 crore and net profit increased by 9.3 per cent to Rs 1,262 crore in Q3FY24 compared to Q3FY23. The net sales increased by 9.37 per cent to Rs 26,927 crore and the net profit increased by 14.25 per cent to Rs 5,828 crore in FY23 compared to FY22. The company has a market cap of over Rs 2,70,000 crore and has been maintaining a healthy dividend payout of 29.6 per cent.

The company's order book position is maintained at Rs 81,784 crore with the receipt of fresh manufacturing contracts, ROH and spare orders with continued budget allocation from the customer’s cash and the bank balance position has improved to Rs 20,306 crore. As of March 2024, DIIs have increased their stake to 9.58 per cent compared to 9.13 per cent in December 2023.

The stock has a PE of 44x, an ROE of 27 per cent and an ROCE of 31 per cent. The stock gave multibagger returns of 175 per cent in just 1 year and a whopping 700 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.