HAL Shares Surge: Elara Securities Ups Target as Stock Climbs 120% in Six Months (HAL)

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  • Elara Securities upgrades Hindustan Aeronautics Limited (HAL) stock to ‘Buy’ with a significant increase in target price following a robust financial performance.
  • The defense PSU’s net profit soared by 52% YoY, reaching ₹4,308.7 crore in Q4 FY24, prompting a positive revision in stock ratings.
  • “We expect an earnings CAGR of 17% during FY24-26E with an ROE of 24% during FY25-26E,” noted Elara Securities in their financial analysis.

Elara Securities has revised its outlook on HAL, citing strong financial growth and potential in export markets, making it a compelling buy for investors.

Robust Financial Performance in Q4 Sparks Optimism

Hindustan Aeronautics Limited (HAL) has reported a remarkable 52% increase in net profit for the fourth quarter of FY24, totaling ₹4,308.7 crore. This significant growth has led Elara Securities to upgrade HAL’s stock from ‘Accumulate’ to ‘Buy’ and increase the target price from ₹4,100 to ₹5,590.

Strategic Developments and Future Outlook

The upgrade is supported by HAL’s sustained double-digit earnings growth, a surge in order inflows worth INR 1.6 trillion, and rising profit margins. The company’s focus on expanding its exports business and capitalizing on indigenisation trends in the defense sector are key drivers behind the optimistic future projections. Elara Securities anticipates a compound annual growth rate (CAGR) of 17% in earnings from FY24 to FY26, with an expected return on equity (ROE) of 24% during FY25-26E.

Market Reaction and Investor Sentiment

Following the announcement, HAL’s stock price witnessed a substantial rally, reflecting positive investor sentiment. The stock has surged over 119.89% in the last six months on the National Stock Exchange (NSE) and an impressive 204.27% over the past year. The market’s response underscores the confidence in HAL’s strategic direction and growth trajectory.

Conclusion

The recent financial achievements of Hindustan Aeronautics Limited, coupled with strategic market positioning and robust growth forecasts, solidify its status as a strong buy in the eyes of Elara Securities. Investors are advised to consider the potential for significant returns in light of HAL’s ongoing and future initiatives.

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