Hindustan Aeronautics | Stocks Updates

This helicopter manufacturing company signs contract worth Rs 5,249 crore: Stock soars over 2%

The stock has witnessed significant buying activity as it has given multibagger returns of more than 134% in the last one year.

During Friday’s trading session, the shares of Hindustan Aeronautics Limited zoomed 2.47%. The company’s current market capitalisation is Rs 2,11,028.61 crore.

Recent development

The Ministry of Defence (MoD) announced the signing of five capital acquisition contracts totalling Rs 39,125.39 crore on Friday.

Among these contracts, Hindustan Aeronautics Limited secured one for the procurement of Aero-engines for MiG-29 aircraft. Larsen & Toubro Limited secured two contracts for the procurement of a Close-in Weapon System (CIWS) and High-Power Radar (HPR). Additionally, BrahMos Aerospace Private Limited clinched two contracts for the procurement of BrahMos missiles and the Shipborne BrahMos system for the Indian Defence Forces.

HAL has signed a contract worth Rs 5,249.72 crore for the procurement of RD-33 Aero Engines for MiG-29 aircraft. These engines will be manufactured by HAL’s Koraput division and are intended to sustain the operational capability of the Indian Air Force’s (IAF) MiG-29 fleet for the remaining service life.

About the company

Hindustan Aeronautics is involved in manufacturing aircraft and helicopters, as well as in the repair and maintenance of aircraft and helicopters.

In terms of product-wise breakdown, Hindustan Aeronautics primarily focuses on several key areas. Repair and overhaul of helicopters constitute the largest portion of their business at 50.89%, followed by spare parts and accessories at 19.36%.

The sale of aircraft and helicopters accounts for 18.24% of their activities, while other segments such as erection works, civil works, electricals, O&M, equipment servicing, spare parts, defence products, rail & metro products, earth-moving equipment, and others collectively make up 11.51%.

Furthermore, geographically the majority of Hindustan Aeronautics’ operations are concentrated within India, representing 98.89% of their business. The remaining 1.11% pertains to activities conducted in the rest of the world.

Shareholding pattern

The President of India holds a substantial stake in the company, amounting to 75.15%. Additionally, Foreign Institutional Investors (FIIs) have increased their stake from 12.63% in September 2023 to 12.93% in December 2023. This robust promoter holding and the rise in FII ownership indicate a positive growth outlook for investors in the future.

Furthermore, the stock has witnessed significant buying activity as it has given multibagger returns of more than 134% in the last 1 year.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.