Rs 1,20,000 Crore Order Book: Defence Aircraft Company Bags New from MoD for Avionics Upgrade of Dornier-228 Transport Aircraft
The stock gave multibagger returns of 120 per cent in just 1 year and a whopping 1,100 per cent in 5 years.
Maharatna Aerospace & Defence PSU Company - Hindustan Aeronautics Limited (HAL) has been awarded a contract by the Ministry of Defence (MoD) for the avionics upgrade of Dornier-228 transport aircraft. This upgrade, as tweeted by the MoD at 1611 hours on November 8, 2024, aims to enhance the Indian Air Force's operational capabilities. The project is a significant step towards the "Atmanirbhar Bharat Abhiyan" as it primarily involves indigenously designed and developed avionics subsystems.
Earlier, the Ministry of Defence (MoD) has entered into a contract with Hindustan Aeronautics Limited (HAL) for the manufacturing of 240 AL-31FP Aero Engines for Su-30MKI aircraft, worth over Rs 26,000 crore. This contract is a major step towards achieving Aatmanirbhar Bharat in the defence sector. The aero engines will be produced by HAL's Koraput Division and are expected to meet the Indian Air Force's requirement to sustain the operational capability of its Su-30 fleet. HAL plans to enhance the indigenisation content of the aero-engines to up to 63 per cent, which will also boost the indigenous content of their repair and overhaul tasks.
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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 designing, manufacturing, repairing, and maintaining aircraft, helicopters and engines, making them a critical supplier for the country's defence program. 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 2.94 lakh crore and has been maintaining a healthy dividend payout of 30 per cent.
The company's order book as of March 31, 2024, was Rs 94,000 crore. With the addition of a new order worth Rs 26,000 crore, the total order book now stands at Rs 1,20,000 crore. The stock has a PE of 36x, an ROE of 29 per cent and an ROCE of 39 per cent. The stock gave multibagger returns of 120 per cent in just 1 year and a whopping 1,100 per cent in 5 years. Investors should keep an eye on this multibagger aerospace & defence stock.
Disclaimer: The article is for informational purposes only and not investment advice.