'Buy' Hindustan Aeronautics, Maintains ICICI Securities On Strong Orderbook, Relatively Inexpensive Valuation

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ICICI Securities Report

Hindustan Aeronautics Ltd. has clocked revenue of Rs 304 billion in FY25 (versus Rs 303.8 billion in FY24). Key points:

1. Revenue was ~6% below our estimate of Rs 322.4 billion, mainly because of shortfall in delivery of ALH-Dhruv and other manufacturing revenue.

2. Order inflow for FY25 was Rs 1,195 billion – this includes manufacturing order of Rs 1,020 billion and repair and overhaul order inflow of Rs 175 billion.

3. Order book outstanding as of FY25 end was ~Rs 1,840 billion (versus Rs 941 billion as of FY24 end).

4. Key contracts signed during FY25 include: LCH- Prachand (156nos.), SU-30 aircraft (12 nos.), AL-31FP engine (240 nos.) and mid-life upgrade of Do-228 (40 nos.).

The stock is currently trading at 22x FY27E (implied P/E). Maintain Buy with DCF-based unchanged target price of Rs 5,000.

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