Shares of state-run HAL on Thursday cracked nearly 7 per cent, extending their losses from Tuesday’s trading session
HAL Share Price Today: Shares of state-run Hindustan Aeronautics (HAL) on Thursday cracked nearly 7 per cent, extending their losses from Tuesday’s trading session, during which the stock fell over 3 per cent, amid selling in the defence space just ahead of the budget. HAL shares opened flat at Rs 5,325 against the previous close of Rs 5,329.40. Further selling pressure was seen in HAL shares post-negative start and hit a low of Rs 4,975, down 6.65 per cent.
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A sales note from brokerage firm InCred is citing valuation concerns within the defence stocks and in stocks like HAL. The note is dated July 7.
The brokerage compares HAL with its global peer Dassault Aviation. Dassault reported revenue of $5.19 billion with a profit of $974 million in the last financial year, while HAL posted revenue of $3.67 billion with a profit of $921 million during the same period.
However, HAL is trading at an enterprise value of $41 billion, compared to Dassault Aviation’s $6.7 billion.
“Over the next two years Dassault Aviation revenue/earnings is expected to grow at a Compounded Annual Growth Rate of around 24 per cent and 12 per cent, while that of HAL at around 13 per cent / 8 per cent, respectively,” the sales note said.
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Dassault exited calendar year 2023 with an order backlog of $41 billion, compared to HAL’s $11 billion.
Out of the 16 analysts that have coverage on Hindustan Aeronautics, 14 of them have a “buy” rating and one each have a “hold” and “sell” rating. Post the two-day drop, the consensus price target is projecting a potential upside of 4 per cent in shares of the defence PSU.
Shares of HAL are off the lows of the day, but are trading 4.6 per cent lower at Rs 5,085. The stock made an intraday low of Rs 4,975 on Wednesday. It had made a record high of Rs 5,675 on July 14, post which it has corrected.
At the current price, shares of HAL are trading at a financial year 2026 price-to-earnings multiple of 38.26 times, which is well above its five-year average price-to-earnings multiple of 23.6 times.
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As per the June quarter shareholding data, the number of small shareholders in HAL, meaning those with an authorised share capital of less than Rs 2 lakh, increased by 60 per cent from the March quarter to 10.8 lakh from 6.9 lakh at the end of March.
India’s domestic mutual funds trimmed their stake in the PSU stock to 5.8 per cent from 6.75 per cent in March. The stake of Foreign Portfolio Investors (FPIs) in HAL has also declined to 11.68 per cent from 12.42 per cent earlier.
Despite this drop, the stock has seen gains of 80 per cent so far in 2024.
HAL is a constituent of BSE 100 index. According to analytics, HAL shares have delivered a positive return of 38 per cent in the last three months and 70 per cent in six months. In one year, HAL shares have delivered a multibagger return of 163 per cent to its investors. In two and three years, HAL shares have sprinted a whopping 470 per cent and 843 per cent, respectively.
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