Shares of Hindustan Aeronautics Ltd. rose to a record high after Antique Stock Broking cited scope for revaluation given its large order book amid India’s quest to modernize its armed forces.
Antique Stock Broking initiated a hedge on the stock with a ‘buy’ rating and a target price of Rs 3,140 each, representing an implied yield of 30%. There would be a significant revaluation of the stock given the strong order book of around Rs 84,800 crore, an unprecedented order pipeline and expected growth recovery from FY24, the house said. brokerage.
According to Antique Stock Broking, India’s largest public defense company has introduced LCA Tejas to boost its exports and is well placed to receive an order for 18 aircraft from Malaysia. HAL is also in talks with Argentina, Australia, Egypt, the United States, Indonesia and the Philippines for the export of the Tejas aircraft, he added.
The Tejas LCA could help boost exports, with the brokerage expecting its sales to increase significantly from the current 1% of exports. The brokerage also expects orders from friendly countries to be successful to boost growth prospects.
Shares of the company rose more than 8%, the most in intraday trading in a month, to hit a record high of Rs 2,638.35 apiece on Monday. The title closed with gains of 7.4%, extending its winning streak into the twelfth session.
Trading volume was nearly three times the 30-day average when markets closed on Monday. The relative strength index was at 88, suggesting the stock may be overbought.
All nine analysts who track the company reiterated “buy,” according to Bloomberg data. The 12-month consensus price target implies a 7.5% upside.
(Corrects an earlier version which stated that HAL had received an order for 18 aircraft from Malaysia.)