Hindustan Aeronautics gains 8% on report of signing pact with French firm

The company has reportedly signed MoU with French aerospace engine firm Safran to extend cooperation and explore opportunities for new helicopter engines in civil and military markets

Shares of Hindustan Aeronautics moved higher by 8 per cent to Rs 1,481.35 on the BSE in Wednesday's intra-day trade on reports that the company has signed memorandum of understanding (MoU) with French aerospace engine firm Safran to extend cooperation and explore opportunities for new helicopter engines in civil and military markets.

“The Company has entered into an MOU on non-exclusive basis with Safran Helicopter Engines SAS, France for finding the feasibility of potential cooperation w.r.t. business opportunities, which does not constitute any obligation on the part of either Party to enter into any Definitive Agreement or make any financial commitments,” HAL said in clarification on news report.

Hence, the said transaction was not considered material for making disclosure to the stock exchanges, the company said today on clarification on media report.

In the past three months, the stock has outperformed the market by gaining 15 per cent, as compared to a 2.3-per cent decline in the S&P BSE Sensex. Over the past one year, it has rallied 37 per cent as against 12 per cent rise in the benchmark index. It had hit a record high of Rs 1,568 on October 18, 2021.

In the first nine months ended December 2021 (9MFY22), HAL had reported 23 per cent year-on-year (YoY) jump in profit after tax at Rs 1,985 crore on the back of strong operational performance. Revenue from operations, too, grew 9 per cent YoY at Rs 13,059 crore. Earnings before interest, taxes, depreciation, and amortization (ebitda) margin improved 232 bps at 26.04 per cent from 23.72 per cent in 9MFY21.

HAL is engaged in the design, development, manufacture, repair, overhaul, upgrades and servicing of a wide range of products including, aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures. The company has been set up to meet the requirement of Indian Defence Forces (namely Indian Airforce, Indian Navy, Indian Army and Indian Coast Guard) in the area of Aerospace.

The business of the company is mainly concentrated to defence services which is highly technology intensive. The company has a vision to expand the revenue sources in the domestic and international market. This is mainly to boost the growth of the company. The company has been developing aerospace ecosystem in the country to boost the growth of industry in line with "Atmanirbhar Bharat Abhiyan".