Hindustan Aeronautics Shares: Hindustan Aeronautics Limited (HAL) saw its shares rise by 2.33%, hitting an intraday high of Rs 4,770 per share on Friday. Although the stock closed with a slight increase of 0.13%, at Rs 4,667.25 on the BSE, analysts are optimistic about further growth in HAL’s share price.
As per Economictimes, the boost in HAL’s stock came after the company announced a major contract worth around Rs 13,500 crore with the Ministry of Defence (MoD). The contract involves the procurement of 12 Sukhoi Su-30 MKI aircraft and related equipment, which will be built at HAL’s Nasik division.
“We wish to inform you that a contract for procurement of 12 Su-30 MKI aircraft along with associated equipment has been signed between the Ministry of Defence and Company at an approximate cost of Rs 13,500 crore inclusive of taxes and duties,” said the Bengaluru-based company in an exchange filing, according to Business standard.
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This deal will enhance the Indian Air Force’s operational capability and strengthen the country’s defense. The aircraft will feature 62.6% indigenous content, thanks to the involvement of the Indian defense industry in manufacturing many of the components.
HAL’s Order Backlog and Future Revenue Growth
According to reports, analysts at UBS have set a target price of Rs 5,700 per share for HAL, suggesting a potential increase of over 22% from its closing price of Rs 4,667.25 per share on Friday.
This contract brings HAL’s order backlog to around Rs 1 trillion, which is about 4.1 times its revenue from the last 12 months. This gives the company strong visibility for future revenue growth. The order pipeline remains strong, with approximately Rs 1 trillion worth of contracts expected to be placed with HAL over the next two years.
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These include orders for 97 more LCA MK1A fighters, 156 light combat helicopters, and 60 naval utility helicopters. HAL is also working on upgrades for existing Su-30MKIs for the Indian Air Force (IAF), with a recent contract for AL-31FP engines.
Apart from HAL, companies like Bharat Electronics (BEL), Astra Microwave, and Data Patterns will benefit from the Su-30 MKI contract by supplying key electronics systems such as radars and electronic warfare equipment. Bharat Dynamics (BDL) will supply Astra air-to-air missiles and Nirbhay missiles for use on these aircraft. Mishra Dhatu Nigam (Midhani) will also play a key role by supplying critical materials and alloys for the aircraft engines.
