Hindustan Aeronautics Ltd (HAL) share price declined over 4% after the company reported its Q2 results, with a miss on operating margins. The PSU defence stock declined as much as 4.15% to Rs 4,738.80 apiece on the BSE.
HAL reported a consolidated net profit of Rs 1,936 crore in the second quarter of FY27, registering a growth of 16% from Rs 1,669 crore in the year-ago period.
Revenue from operations in Q2FY27 grew 14.8% to Rs 7,613 crore from Rs 6,629 crore, year-on-year (YoY).
The PSU's topline and bottomline were above Street estimates. NDTV Profit had estimated a net profit of Rs 1,899 crore and revenue of Rs 7,483 crore.
However, HAL's operating performance during the September quarter was below estimates.
ALSO READ: HAL Q2 Results: Net Profit Rises 16% To Rs 1,936 Crore, Beats Estimates; EBITDA Misses
Earnings before interest, taxes, depreciation and amortisation (EBITDA) in Q2FY27 increased 11.6% to Rs 1,739 crore from Rs 1,558 crore, while EBITDA margin contracted to 22.8% from 23.5% YoY. EBITDA was below the estimate of Rs 1,924 crore and margin also missed the estimate of 25.7%.
CLSA Raises Target
Earlier, global brokerage firm CLSA had raised its target price on HAL shares, citing cheap valuations. The brokerage firm maintained its ‘Outperform' rating and raised its 12-month HAL share price target to Rs 5,625 from Rs 5,481 earlier.
According to brokerage firm CLSA, HAL is the cheapest pure-play defence stock despite its sector-leading position. It believes the PSU is among the biggest beneficiaries of the government's Make in India push.
“We see HAL as the cheapest pure-play India defence major despite a high entry barrier and high-ROE business,” CLSA said in its latest report.
The brokerage expects deliveries of HAL's Light Combat Aircraft (LCA) Tejas Mk1A to begin soon, with the commencement of deliveries in Q3/Q4 FY27 emerging as a key near-term catalyst.
At 1:35 PM, HAL share price was trading 1.74% lower at Rs 4,857.75 apiece on the BSE.
ALSO READ: HAL Cheapest Pure-Play Defence Stock Despite Sector-Leading Position, Says CLSA; Hikes Target Price
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.