Hindustan Aeronautics Share Price Rises After Rs 13,500-Crore Order Win

Shares of Hindustan Aeronautics Ltd. gained over 2% after it won a Rs 13,500-crore order from the Ministry of Defence.

The order, signed on Dec. 12, involves the procurement of Su-30MKI aircraft, with a significant focus on indigenisation—62.6% of the components will be sourced locally, aligning with India's ‘Aatmanirbhar Bharat’ initiative.

The deal is a significant boost to HAL's order book and comes as part of a broader strategy to enhance India’s defence capabilities. It is also expected to further strengthen the country’s self-reliance in defence production, with a considerable portion of the components and materials being sourced from domestic suppliers.

This deal was part of HAL’s fiscal 2025 order pipeline, UBS said. HAL has already secured manufacturing orders worth Rs 40,000 crore year-to-date, including Rs 26,000 crore in orders for AL-31 FP engines, representing 40% of UBS’ financial year 2025 order intake forecast of Rs 1 lakh crore for the company.

UBS also expects further defence orders to materialise in the fourth quarter of the fiscal, providing additional growth potential for the company.

HAL remains a top pick for UBS, with a 12-month price target of Rs 5,700, up from its current market price of Rs 4,661.1, as of Dec. 12, 2024.

Share price of HAL rose as much as 2.03% to Rs 4,755 apiece. It pared gains to trade 0.79% higher at Rs 4,697.45 apiece, as of 10:00 a.m. This compares to a 0.70% decline in the NSE Nifty 50.

The stock has risen 69.58% in the last 12 months. Total traded volume so far in the day stood at 4.0 times its 30-day average. The relative strength index was at 69.

Out of 16 analysts tracking the company, 15 maintain a 'buy' rating and one suggests 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 10.5%.