Shares of Hindustan Aeronautics Limited (HAL) continue their remarkable ascent, defying market norms and attracting increasing attention from investors and analysts alike. Despite a recent surge of over 22% in the past week and an impressive 200% over the past year, HAL’s stock remains in high demand, driven by its exceptional Q4 performance.
Investors are flocking to the company, enticed by its strong growth visibility, robust order book, and stellar earnings performance. In the midst of the buzz surrounding HAL, the state-owned defense PSU reported a staggering 52% year-on-year spike in net profit to Rs 4,309 crore for the March quarter of FY24, with net sales also experiencing an 18% growth to Rs 14,769 crore. Furthermore, HAL’s EBITDA margin surged to 40% in Q4, a significant rise from the previous fiscal quarter.
The stellar quarterly performance has not only impressed investors but also prompted numerous brokerages to upgrade their target prices for the stock, signaling further upside potential. Global brokerage UBS, anticipating an upside of over 10% from current levels, raised its price target for HAL by over 44%, citing the company’s improved order book scale, lower competition, and increased export potential.
Similarly, Jefferies revised its price target upwards by nearly 47%, emphasizing HAL’s strong prospects and clear visibility. The brokerage anticipates higher margin service income and double-digit revenue growth from aircraft deliveries for the foreseeable future. Nomura also joined the fray, upgrading its price target by over 7% while maintaining a ‘buy’ call on the stock, citing HAL’s robust order backlog and promising pipeline supported by the Indian Air Force.
Elara Capital highlighted opportunities for HAL in indigenization and unexplored export markets, projecting significant earnings growth. The brokerage not only raised its price target by 36% but also upgraded its rating for the stock to a ‘buy’.
With the flurry of target price upgrades, HAL’s flight seems far from over, presenting investors with an enticing opportunity to capitalize on its continued growth trajectory.
