Hindustan Aeronautics Ltd. share price target

Hindustan Aeronautics (HAL) reported strong performance in Q2FY23. Key highlights: 1) EBITDA margin at 31% was ahead of the 25-26% guidance for FY23- FY25.

Hindustan Aeronautics (HAL) highlighted visibility on orders worth ~Rs1,500bn over next three years, with Rs450bn of manufacturing orders expected in FY23- H1FY24.

Hindustan Aeronautics’ (HAL) Q1FY23 result was better than expected with revenue growth of 124.2% YoY and PBT increasing 203.8% YoY.

Hindustan Aeronautics’ (HAL) management has maintained 6% revenue growth guidance for FY23. While FY24 growth guidance is revised down to single digits, a strong EBITDA margin outlook at 25-26%, on the back of 55-60% Repair overhaul and spares (ROH) execution in the medium term leads to earnings upgrades.

Hindustan Aeronautics (HAL) procures Rs40-42bn worth of spares and parts
(used in ROH) from Russia, for which it has maintained inventory to cater to the
requirement for at least next 8-9 months. The company is also focusing on
indigenous production of Russian supplies to reduce the import dependence.
Management mentioned that Russia has confirmed to supply critical raw material
to the company, but the payment mechanism is yet to be established.

Hindustan Aeronautics Ltd. is one of the largest defence PSUs engaged in the design, development, manufacture, repair, overhaul, upgrade and servicing of a wide range of products including, aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures. The company has a strong order backlog of Rs. 52,000 cr. as of July 2020 which is expected to

Hindustan Aeronautics Ltd (HAL), a Navratna' enterprise, engaged in the design, manufacture, overhaul, upgrade and servicing of a wide range of products including aircrafts, helicopters, aero-engines, avionics and aerospace structures. HAL derives ~93% of sales from Indian Defence Services and export its products and services, primarily spares to more than 13 countries. The company's operations are spread over 20 production divisions and 11 R&D; centres. HAL's Revenue and PAT registered CAGR of 7% and 62% respectively over FY15-17. Robust...