Hindustan Aeronautics (HAL) performed well in the third quarter. The company's revenue grew 14.8 percent year-on-year to Rs 6,957 crore. Better order execution played a big role in this. The company's order book is good. The company has estimated the EBITDA margin to be between 26-27 percent. The company expects good revenue growth due to orders for LCA Mark 1A, Light Combat Helicopters, Advanced Light Helicopters, Dornier Aircraft, Marine Utility Helicopters.
Profit increased by 14 percent in the third quarter
Hindustan Aeronautics ' EBITDA stood at Rs 1,683 crore in the December quarter. This is 17.2 per cent higher on a year-on-year basis. HAL 's EBITDA margin is expected to increase by 50 basis points to 24.2 per cent in the March quarter of FY25. The company's consolidated net profit grew 14 per cent to Rs 1,440 crore in the December 2024 quarter. This is due to expansion in business and better margins. The company's order book is excellent. It was Rs 81,784 crore in FY23, which has now increased to Rs 1.3 lakh crore. This is four times the company's annual revenue.
Partnership with companies like Tata and L&T
HAL has received an order for 12 Sukhoi fighter jets from the Government of India in December 2024, which is worth Rs 13,500 crore. The company will gradually benefit from export orders as well. Defense spending is increasing in many parts of the world. For example, the European Union has recently announced a rearmament plan of 800 billion euros. Companies like HAL are expected to benefit from this. HAL is also partnering with some private companies. These include companies like Tata and L&T.
Eye on many countries for export
HAL is looking for export opportunities in countries like South-East Asian countries including Philippines, Nigeria, Morocco, Egypt and North America. The company's current order book gives a clear picture about its revenue. The company expects a total order book of Rs 1,60,000-1,70,000 crore in the next 18 months to 3 years. The company wants to keep its manufacturing line busy till 2032. The company has also planned to increase its production capacity. The company can spend capital of about Rs 3,000 crore every year.
Also read: Doors of equity derivatives will not be closed for retail investors, know what is SEBI 's plan
Should you invest?
In July last year, HAL's stock reached an all-time high of Rs 5,675. The ongoing decline in the market has also affected this stock. Now it has come down to Rs 3,398. This stock is trading at 26 times the estimated earnings of FY26 and 23 times the estimated earnings of FY27. The valuation looks fine considering the current and future order book of the company. This stock has fallen 26 percent in the last 6 months, making its price attractive.
