HAL Share Price Performance in 2024
Hindustan Aeronautics Ltd (HAL) shares are gaining traction, with the PSU defence company’s price up 84% in 2024 and 167% in the previous year. This increase in share price demonstrates investor optimism about HAL’s growth potential. The Ministry of Defence has issued a Request for Proposal (RFP) for the acquisition of 156 Light Combat Helicopters. This includes 90 helicopters for the Indian army and 66 for the Indian air force. HAL confirmed this development in a filing with the stock exchanges, emphasizing its critical role in national defense.
Strong Order Book and Pipeline
According to Chola Securities, HAL has a solid order book of over Rs 94,000 crore, representing a 15% rise year on year. This robust pipeline demonstrates the company’s strong position in the defence sector.Chola Securities recently included HAL in its investment recommendations for the forthcoming budget. The brokerage firm underlines HAL’s focus on defence and the Make in India initiative, which positions it well for future growth.
Budget Allocations for Defence
The interim Budget for 2024-2025 provided Rs 6,21,541 crore ($74.8 billion) to the Ministry of Defence, a 4.7% increase over prior appropriations. This huge investment demonstrates the government’s determination to bolster the country’s defense capabilities. HAL has formed strategic ties with global giants such as General Electric (USA), Safran Helicopter Engines (France), and Airbus. These collaborations boost HAL’s technological capabilities and market reach.
Financial Strength
HAL is financially stable, with no net debt and a cash per share of approximately Rs 395. Shareholders receive a dividend yield of 0.59%. The company has solid financials, with a return on equity (ROE) of 29% and margins of 32% based on fiscal year 24 data. HAL’s profit has increased by 27% per year over the last five years. This remarkable growth rate indicates the company’s operational effectiveness and market demand for its products.
Long-Term Defence Manufacturing Goals
The Ministry of military plans to generate Rs 1.75 lakh crore in aerospace and military industry revenue by 2025, including Rs 35,000 crore in exports. HAL is ideally positioned to contribute greatly to this lofty goal. HAL’s outstanding performance, strategic connections, and solid financial health make it an attractive investment in the defense sector. With significant government support and a strong growth pipeline, HAL is poised to continue its upward trajectory.
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