Buy Hindustan Aeronautics; target of Rs 5000: ICICI Securities

ICICI Securities research report on Hindustan Aeronautics

Hindustan Aeronautics Limited (HAL) has clocked revenue of INR 304bn in FY25 (vs INR 303.8bn in FY24). Key points: 1) Revenue was ~6% below our estimate of INR 322.4bn, mainly because of shortfall in delivery of ALH-Dhruv and other manufacturing revenue. 2) Order inflow for FY25 was INR 1,195bn – this includes i) manufacturing order of INR 1,020bn and RoH order inflow of INR 175bn. 3) OB o/s as of FY25 end was ~INR 1,840bn (vs INR 941bn as of FY24 end). 4) Key contracts signed during FY25 include: i) LCH- Prachand (156nos.), ii) SU-30 aircraft (12 nos.), iii) AL-31FP engine (240 nos.) and iv) mid-life upgrade of Do-228 (40 nos.).

Outlook

The stock is currently trading at 22x FY27E (implied P/E). Maintain BUY with DCF-based unchanged TP of INR 5,000.

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