Should You Keep an eye on defense stocks having an orderbook valued at ₹94,000 Cr.

Keep an eye on defense stocks having an orderbook valued at ₹94,000 Cr.

Because of the government’s support, the long-term contractual obligations, and the consistent demand for defense shares, investing in them offers financial development. You can add the defense stock, which is the leading producer of defense equipment for the Indian government in the aviation sector, to your watchlist or portfolio by clicking on it.

Hindustan Aeronautics Limited’s shares finished at Rs. 4,446.85 per equity share, down 0.76 percent from its closing price of Rs. 4,481.10 the day before, with a market value of Rs. 2,97,394 Crores.

The main producer of defense equipment for the Indian government in the aviation sector is Hindustan Aeronautics Limited (HAL). It is responsible for designing, developing, producing, maintaining, and modernizing airplanes, helicopters, and essential aerospace parts and accessories.

It features ten sites devoted to research and development co-located with the manufacturing grounds, in addition to over twenty production facilities. These divisions/centers are dispersed among nine different places in seven different states throughout the US.

Additionally, it has a number of fruitful collaborations with companies including Israel Aerospace, Rolls Royce, Honeywell, and Air Mauritius. In addition to other cooperative research and development, HAL and Rolls Royce have continuing contracts centered on the production and maintenance of Adour engines for the aircraft and their parts that serve military clients in India and abroad.

The management of Hindustan Aeronautics Limited anticipates growing the company’s robust order book, which now stands at Rs. 94,000 crore as of Q1FY25, to Rs. 1,20,000 crore by the conclusion of the fiscal year.

With projected contracts for LCA Mark 1A, Domier Aircrafts, Utility Helicopter Marine, Advanced Light Helicopter, and many others estimated to be worth between Rs. 1,60,000 and 1,70,000 crores, and with a goal of materializing them within the next three years, HAL’s order pipeline appears promising.

In the next five years, Hindustan Aeronautics Limited (HAL) expects to engage in a range of greenfield projects and capacity augmentation of various programs, with an anticipated capital expenditure plan (CAPEX) of between Rs. 14,000 and Rs. 15,000 crores, or around Rs. 3,000 crores annually.

With earnings of Rs. 814 crores to Rs. 1,436 crores, its revenue from operations increased by 11% YoY from Rs. 3,915 crores in Q1FY24 to Rs. 4,348 crores in Q1FY25.

It has disclosed return on equity (ROE) of 28.9 percent and return on capital employed (ROCE) of 38.9 percent in terms of return ratios. With a debt-to-equity ratio of zero, the firm is debt-free.

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Disclaimer: The above article is for educational and news purposes, this is not a buying or selling recommendation. TraderPulse recommends that users to check with certified experts before making any investment decisions.