 "Hindustan Aeronautics joins Rs 1-trillion market cap club; hits new high")
The market capitalisation (m-cap) of state-owned aerospace & defense company Hindustan Aeronautics (HAL) crossed the Rs 1-trillion mark with the stock hitting a new high of Rs 3,021 (up 3 per cent) on the BSE in Wednesday’s intra-day trade.
At 10:03 am; with a market cap of Rs 1.006 trillion, HAL claimed the 52nd spot in the overall market cap ranking, the BSE data shows. In the past one month, the stock has outperformed the market by surging 11 per cent as compared to a 3.5 per cent rise in the S&P BSE Sensex.
HAL, a defence public sector undertaking (DPSU), is engaged in the business to undertake design, development, manufacturing, maintenance, repair, overhaul, and servicing of products like aircraft, helicopters, engines and other related systems like avionics, instruments, and accessories.
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It also engages with the Indian Space Research Organisation (ISRO) to contribute to the space programmes of the country. The Government of India (GoI) remains HAL's largest shareholder, with a current shareholding of around 75 per cent.
HAL registered its highest-ever revenue from operations of around Rs 26,500 crore (provisional and unaudited) for the financial year 2022-23 (FY23) as against Rs 24,620 crore for the previous financial year. The company has recorded a revenue growth of 8 per cent during the year as compared to FY22.
The order book of the company stood at around Rs 82,000 crore at the end of March 2023 after liquidation of the supplies during FY23. During the year, fresh contracts of around Rs 26,000 crore were received, which includes manufacturing contracts for 70 HTT -40, 6 Do-228 Aircraft and PSL V launch vehicles. In addition, on ROH front fresh orders to the tune of Rs 16,600 crore were received during the year, HAL had said in a media release.
The cash flow of the company has improved substantially with payments of around Rs 25,000 crore received from various Defence Customers during FY23.
"HAL faces limited competition from the private sector due to high capital intensity and long gestation periods for developing manufacturing capabilities in the sector. Though competition from the private sector is likely to intensify in the medium term, HAL’s established track record and large manufacturing capacities with adequate pool of trained manpower and focus on research and development (R&D) will continue to be strong mitigating factors. The govt’s increased focus on indigenisation with the Make in India policy and mandatory offset policy for defence procurement by the govt, augur well for the company’s future growth, " said rating agency ICRA.
The ratings factor in the majority ownership held by the govt in HAL and its strategic position as a dominant supplier of aircrafts, helicopters, engines, avionics, and accessories as well as main provider of maintenance, repair, and overhaul (MRO) services to the Indian defence forces, ICRA said in its rating rationale.
