Hindustan Aeronautics scales new high on tie-up with Israel Aerospace

Shares of state-run aerospace and defence major Hindustan Aeronautics (HAL) scaled an all-time high of Rs 1,625.25 on Thursday after the company entered into a pact with its long-term partner Israel Aerospace Industries (IAI). The stock gained 5 per cent, before partially erasing gains. At 12:00 noon, it was up 2.7 per cent. 

Under the pact, the company has partnered with IAI to convert civil (passenger) aircraft to multi mission tanker transport (MMTT) aircraft in India. The scope of the partnership also covers "passenger to freighter aircraft" conversion along with MMTT conversions. 

"HAL will convert pre-owned civil aircraft into air refuelling aircraft with cargo and transport capabilities," it said in a filing. READ HERE

The company's chief managing director R. Madhavan said the venture of MMTT conversion business is one of the strategic diversification avenues identified by HAL. 

In the last four days, the stock has risen 7 per cent. Its previous record high was Rs 1,592.35, hit on Aoril 4, 2022, after the company said it recorded the highest-ever revenue of over Rs 24,000 crores (provisional and unaudited) for FY22, up 6 per cent from last year. 

"HAL achieved record revenue with production of 44 new helicopters, 84 new engines, overhauling 203 aircrafts and 478 engines," it had said. READ HERE

Moreover, the company recently bagged a contract from the government to produce 15 light combat helicopters at a cost of Rs 3,887 crores, along with infrastructure sanctions worth Rs. 377 crores. 

In an investor presentation last month, the company said the defence ministry has granted it acceptance of necessity (AoN) for several defence platforms, which are expected to strengthen its order book by Rs 30,000 crores and keep its position healthy in the medium term. 

AoN is accorded by the government for projects related to an operational situation foreseen as imminent, or for a situation where a crisis has emerged without prior warning.