Hindustan Aeronautics Is Primed Up For Good Returns, Says ICICI Securities Post Record Ebitda Margin In Q4

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ICICI Securities Report

Hindustan Aeronautics Ltd.'s Q4 FY25 Ebitda was significantly ahead of our estimate. Key points:

1. Ebitda margin at 38.6% was aided by higher proportion of RoH revenue;

2. FY25 closing orderbook stood at a healthy level of Rs 1.84 trillion; and

3. cost reduction, capacity and capability building remain key focus areas for the management.

Management has guided for revenue growth of 8-10% (seems conservative) and Ebitda/operating margin at healthy 31%/27% for FY26.

Taking cognisance of management’s guidance, we have lowered our FY26/27E EPS by 10%/22%, respectively. That said, considering lower execution risks, we lower our WACC to 10% (earlier 11%), resulting in a revised target price of Rs 6,150 (earlier Rs 5,000). Maintain Buy.

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