HAL Stock: Elara Securities raises target price, shares upgrade more than 120% in 6 months

Brokerage firm Elara Securities has upgraded defense PSU stock Hindustan Aeronautics Limited (HAL) to ‘Buy’ from ‘Accumulate’. The company has upgraded Hindustan Aeronautics Limited (HAL) to ‘Buy’ from ‘Accumulate’. -Its net profit for the fourth quarter results (Q4 FY24) increased year-on-year to ₹4,308.7 crore.

The brokerage firm has also raised the target price of the PSU defense stock to ₹5,590 from ₹4,100. “As we move forward, we progress to buy from Accumulate, with a higher TP of Rs 4,100 to Rs 5,590 based on 45x (from 35x) March 2025E P/E. Our revised TP is driven by a new stream of export business, growth in inflows to Rs 1.6 trillion, expanding margins and expectations of sustained double-digit earnings growth, Elara Securities said in a note.

It said that, “We believe in rising share of indigenization. Reassessment of unknown export opportunities in the aircraft and helicopter industry is necessary. We expect earnings CAGR of 17% during FY24-26E and ROE of 24% during FY25-26E. The key risks in our call include lower spending in the defense capital budget, lower domestic procurement allocation, increased competition from the private sector and delays in execution.”

For fiscal 2024, Hindustan Aeronautics reported revenue of ₹30,380 crore, higher than the provisional figure of ₹29,810 crore announced on April 1.
EBITDA for the quarter increased by 81.8% to ₹5,901.1 crore compared to ₹3,245.8 crore in the same period last year.

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