Hindustan Aeronautics Ltd. share price target

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...

IPO NOTE

HAL, the “Navratna” company is a leader in the Indian defence and aviation markets, currently owned 2 trademarks, 7 patents, 11 design registrations and 77 copyrights as of December 31, 2017, plans to double manufacturing line for LCA to 16 per year from the current eight. Further, company have a strong balance sheet, nil borrowings which will help to make investments required for growth plan, including investments in R & D going forward. In addition, strong financial ratios and credit ratings currently enable to have ready access to domestic and international credit markets. Orders to manufacture 40LCA, & the completion of Sukhoi orders will bring in revenue going ahead. The government’s decision to go ahead with LCA for single engine fighter jets requirement will also help the company. Moreover, taking into consideration, the current market opportunities in defense and Government of India’s initiative, ‘Make in India’ aims to boost the nation’s manufacturing sector as well as to create market globally . we recommend to SUBSCRIBE the IPO for long term listing benefits.

for maintenance, repair and overhaul for these indigenous and licence manufactured aircraft and helicopters, as well as for aircraft and helicopters procured directly by the Indian Defence Services, Mirage 2000, MiG-29 aircrafts (the Indian Air Force procured from third parties) and An-32 aircraft along with the associated engines, accessories and avionics. Most of its Divisions and R&D; Centres comply with quality management system accreditations including international standards such as the AS9100C, ISO9001:2008 and...