HAL gains 3% to cross Rs 4,000-mark; stock touches fresh lifetime high

Shares of Hindustan Aeronautics surged 3 per cent to hit a record high of Rs 4,024 (breaching the Rs 4,000-mark) on the BSE in Wednesday’s intra-day trade ahead of stock split. The stock of state-owned defense company surpassed its previous high of Rs 3,999.1 touched on July 31, 2023.

The board of directors of HAL, at their meeting held on July 27, approved sub-division/ stock split of existing 1 equity share of face value of Rs 10 each into 2 equity shares of Rs 5 each. The company has fixed September 29 as the record date for sub-division of equity shares.

On rationale behind sub division of shares, the company said that it was in compliance with the Department of Investment and Public Asset Management (DIPAM) guidelines on capital restructuring, encourage wider participation of small investors, and enhancement of liquidity in the stock market.

Thus far in the calendar year, the stock price of HAL has appreciated nearly 60 per cent, as compared to 6.8 per cent rise in the S&P BSE Sensex. In the past two years, the stock zoomed 261 per cent, while from its March 2020 lows, it skyrocketed nearly 800 per cent from the level of Rs 448.

HAL is engaged in design, development, manufacture, repair, overhaul, upgrade and servicing of a wide range of products including, aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures.

Indian Defence Sector - which was so far contributing as strategic sector is gradually developing as an economic sector capable of contributing to the economic growth of the country. Under the Atmanirbhar Bharat initiative, the government is facilitating development of the Indian industry to reduce defence import as well as dependence on the foreign OEMs.

Various initiatives of the GoI in recent days have given thrust on the indigenisation and indigenous procurement of defence equipment. Over the next 5 -10 years such reforms will equally help defence PSUs and private industry to put a firm step towards achieving a self-sustaining defence industry in the country.

HAL in its FY23 annual report said that in near future, Indian Defence market will continue to be prime revenue source for the company due to projects like LCA Mk1A, LCH, LUH and HTT-40. The company has taken various initiatives to make systems more agile, effective, cost efficient and to be competitive. Enhancement of HAL capability is being planned to cater above projects. New production lines are being installed for HTT-40 and LCA Mk1A production.

"In medium term, we are also looking forward to diversify and increase our presence in UAV, Civil MRO & allied operations, Digital Solutions and new space segments as strategic initiatives. We are also focusing on strengthening marketing efforts, expanding geographical presence and collaboration with Indian Industry/ Global OEMs to boost export sales," the company added.