Hindustan Aeronautics (HAL) shares have risen about 22 per cent in the last 6 months. However, in the financial year 2024-25, the company’s revenue increased just 2 percent. There were some other reasons including its engine deficiency. The biggest feature of HAL is its orderbook. The company’s orderbook is Rs 1,84,000 crore, which is six times its annual revenue. This does not cause any concern about the company’s revenue in future. In the financial year 2024-25, the company got new contracts worth Rs 1,02,000 crore and contracts worth Rs 17,500 crore.
Improvement is expected in HAL’s examination. The company is increasing its capacity. It has also increased the focus on exports. Further growth is expected to be good. The government is emphasizing on the production of defense equipment in the country itself. This means that the defense equipment which was being imported till now, will now be produced in the country itself. These include fighter aircraft. This is sure to get a major benefit of Hindustan Aeronautics.
The large order received by the company includes 240 AL-31FP engine, 156 LCH Prachandi helicopters and Sukhoi-30 MKI aircraft. The company’s orderbook is quite strong. This can lead to a realization of about Rs 1,00,000 crore in the next two years. The company is expected to supply 12 engines of LCA Mark 1A by December this year. With this, the company will get a revenue of about Rs 3,000 crore. In the next 5 years, the company is scheduled to deliver the Army and Air Force of Tejas LCA Mark 2, 84 Sukhoi-30mki aircraft and 156 light comebat helicopters.
The HL Small Satellite Launch Vehicle (SSLV) has become successful bidder. With this, HAL will manufacture SSLV’s technology as well as manufacturing it. ISRO has developed SSLV. Given the strong orderbook, the company is increasing its capacity. The company in Bengaluru is increasing the manufacturing capacity of the aircraft from 16 to 24. At the same time, Nashik’s Greenfield is delivering units from Facili. The company has a plan of 14,000-15,000 crore capital expenditure in the next five years. This will strengthen the manufacturing capacity and R&D.
The company’s growth in this financial year is expected to be 8–10 percent. It can be more than 10 percent in the next financial year. The company has signed a commercial aircraft MRO with Airbus. This will increase both revenue and profits. Currently, FY27 is trading at 31 times the estimated earnings of this stock. It seems reasonable. This stock shows scope for attractive returns with low risk.
