HAL's current orderbook of Rs 1,840 billion (~6x trailing twelve months) provides sufficient revenue visibility in the near term. Going forward, the orderbook pipeline remains strong with order inflow expectation of more than Rs 1,400 billion (including repair and overhaul orders) for FY26E. Besides, the progress on development of Tejas Mk-II and AMCA is ongoing. The brokerage also believes the execution of Tejas Mk-1A would be beneficial for other companies involved in the supply chain such as BEL, Astra Microwave and Dynamatic Technologies.
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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:
Revenue was ~6% below our estimate of Rs 322.4 billion, mainly because of shortfall in delivery of ALH-Dhruv and other manufacturing revenue.
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.
Order book outstanding as of FY25 end was ~Rs 1,840 billion (versus Rs 941 billion as of FY24 end).
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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