2:1 stock split & Rs 81,784 crore order book: This multibagger aerospace & defence company receives order worth Rs 2,890 crore from Ministry of Defence

The stock gave multibagger returns of 120 per cent in just 1 year, 325 per cent in 2 years and a whopping 500 per cent in 3 years.

Hindustan Aeronautics Ltd (HAL) secured a contract worth Rs 2,890 crore from the Ministry of Defence to perform a Mid Life Upgrade (MLU) on 25 Dornier Do 228 aircraft along with their associated equipment for the Indian Navy. This upgrade will involve incorporating modern Avionics Systems and Primary Role sensors, significantly enhancing the aircraft's capabilities in performing maritime surveillance, coastal surveillance, electronic intelligence, and maritime domain awareness. Additionally, the upgraded Dorniers will be able to undertake secondary roles like search and rescue, medical evacuation, and communication linking. The MLU project is expected to generate employment opportunities for around 1.8 lakh man-hours over 6.5 years and will heavily rely on indigenous sources for major systems and equipment, thereby contributing to the Indian government's "Atmanirbhar Bharat" (Self-Reliant India) initiative under the Make-in-India program.

Earlier, The Ministry of Defence signed contracts worth Rs 8,073.17 crore with Hindustan Aeronautics Limited (HAL) to acquire 34 advanced indigenous ALH Dhruv Mk III helicopters (25 for the Army and 9 for the Coast Guard) for various missions including search and rescue, troop transport, and maritime patrol, with significant involvement of Indian small and medium enterprises (MSMEs) in the project.

Additionally, the company ex-date for the stock split stock split, dividing each existing Rs 10 equity share into two Rs 5 equity shares on September 28, 2023. Additionally, the company paid a final dividend of Rs 15 per share on August 24, 2023.

According to the Quarterly Results, the net sales increased by 7 per cent to Rs 6,061 crore and net profit increased by 9.3 per cent to Rs 1,262 crore in Q3FY24 compared to Q3FY23. The net sales increased by 9.37 per cent to Rs 26,927 crore and the net profit increased by 14.25 per cent to Rs 5,828 crore in FY23 compared to FY22. The company has a market cap of over Rs 2,00,000 crore and has been maintaining a healthy dividend payout of 29.6 per cent.

The company's order book position is maintained at Rs 81,784 crore with the receipt of fresh manufacturing contracts, ROH and spare orders with continued budget allocation from the customer’s cash and the bank balance position has improved to Rs 20,306 crore.

The stock has a PE of 36x, an ROE of 27.2 per cent and an ROCE of 30.6 per cent.  The stock gave multibagger returns of 120 per cent in just 1 year, 325 per cent in 2 years and a whopping 500 per cent in 3 years. Investors should keep an eye on this multibagger aerospace & defence stock.

Disclaimer: The article is for informational purposes only and not investment advice. 

2 comments on article "2:1 stock split & Rs 81,784 crore order book: This multibagger aerospace & defence company receives order worth Rs 2,890 crore from Ministry of Defence"

Krishna Reddy Gangireddy

Good information

3/20/2024 9:19 PM

Uttam Halder

Thanks for important discussion .

3/21/2024 6:03 PM

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