HAL hits new high on strong Q4 results; stock soars 18% in a week

Shares of Hindustan Aeronautics hit a new high of Rs 1,785.35, after rallying 6 per cent on the BSE in Friday’s intra-day trade. In the past one week, the stock has gained 18 per cent after the company reported 90 per cent year on year (YoY) jump in consolidated net profit at Rs 3,105 crore for March quarter (Q4FY22). Meanwhile, the state-owned defence company made a profit of Rs 1,628 crore in Q4FY21.

Moreover, the company’s revenue from operations grew 6 per cent YoY to Rs 11,561 crore from Rs 10,867 crore in Q4FY21. The company said that the sales include Rs 1,276 crore of differential sales on finalization of fixed price quotation for FY2016-17, approved by the Ministry of Defence.

Meanwhile, HAL on Thursday said that 'Type Certification' of first indigenous light transport civil passenger aircraft "Hindustan 228-201" was handed over by Directorate General of Civil Aviation (DGCA) to Transport Aircraft R&D Center, HAL Kanpur at DGCA HQ New Delhi.

"Hindustan 228-201 aircraft is the first Type Certified fixed wing aircraft in India complying with latest FAR 23 certification requirement which is a major milestone towards vision of building a new, Atmanirbhar Bharat," the company said.

In the previous month, HAL had entered into a pact with its long-term partner Israel Aerospace Industries (IAI). Under the pact, the company partnered with IAI to convert civil (passenger) aircraft to multi mission tanker transport (MMTT) aircraft in India. The scope of the partnership also covered "passenger to freighter aircraft" conversion along with MMTT conversions.

In the past three months, HAL outperformed the market by surging 32 per cent, as compared to 7 per cent decline in the S&P BSE Sensex.

Analyst at ICICI Securities has a ‘buy’ rating on HAL with a target price of Rs 1,805 per share. "Defence PSUs have stayed resilient in recent corrective phase after multiyear breakouts early during the year. HAL stays our top pick in the sector as it remains in a structural uptrend and offers a fresh entry opportunity with favourable risk reward after three week’s correction," the brokerage firm added.

According to technical analyst at ICICI Securities, the stock signals inherent strength and bullishness that augurs well for the next leg of upmove. “Key observation is that the stock, has held above its 50 day EMA post results. Now fresh buying demand emerging after taking support at recent breakout area around Rs 1,500,” the brokerage firm said.