PSU defence stock jumps 8% after receiving ₹62,700 Cr order from Ministry of Defence

The shares of the prominent defence company jumped 8 percent after the company bagged a prestigious work order Ministry of Defence for Rs 62,700 crore. 

Price Movement 

With a market capitalization of Rs 2.87 lakh crore, the shares of Hindustan Aeronautics Ltd were trading at Rs 4,304.70 per share, increasing around 3.08 percent as compared to the previous closing price of Rs 4,176.00 apiece. 

Reason for Rise 

The shares of Hindustan Aeronautics Ltd have seen positive movement after signing two contracts with the Ministry of Defence for supply of 156 Light Combat Helicopters (LCH), Prachand to Indian Army (90 Nos) and Indian Air Force (66 Nos) along with training and other associated equipment worth around Rs. 62,700 Crore excluding taxes. 

Moreover, the supply of India’s indigenously designed LCH helicopters will start in the third year and span five years, enhancing high-altitude combat capability. With over 65 percent indigenous content, involving 250+ domestic companies (mostly MSMEs), the project will generate 8,500 jobs, boosting India’s defense manufacturing ecosystem and self-reliance. 

Goldman Sachs (Singapore) Pte – ODI acquired 3.85 lakh shares in the company at an average price of Rs 4,176.25 per share from Kadensa Master Fund. 

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Order Book 

HAL’s order book is expected to rise to Rs 1.25 lakh crore by FY25. As of March 31, 2024, the company’s order book stood at more than Rs 94,000 crore, with additional major orders expected during FY25. 

Future Projections 

HAL expects revenue growth of 15-18 percent from FY25 to FY28, supported by ongoing projects and advancements in both military and civilian aerospace sectors. The company is actively addressing production delays attributed to technical challenges and remains committed to fulfilling its delivery schedules, including plans to deliver 11 Tejas Mk1A aircraft by March 2025. 

Company profile 

Hindustan Aeronautics Limited is an Indian firm that designs, develops, manufactures, repairs, overhauls, upgrades, and services a variety of goods such as airplanes, helicopters, aero-engines, avionics, accessories, and aerospace structures. 

Written by Abhishek Singh

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