HAL Surges To Record As Antique Stock Assigns ‘Buy’ Citing Scope For Re-rating

Shares of Hindustan Aeronautics Ltd. hit record high after surging the most in over a month as a brokerage citied scope of rerating given the large order book amid India’s quest for modernising its armed forces.

Antique Stock Broking initiated coverage with a ‘buy’ recommendation and target price of Rs 3,140 — an implied return of 30% — as there would be a meaningful rerating of the stock given the strong order book of around Rs 84,800 crore, unprecedented order pipeline, and expected growth pick up from FY24.

India’s largest state-run defence company has also received an 18-aircraft order from Malaysia. The LCA Tejas could help in scaling up exports with the brokerage expecting the its sales to rise significantly from the current 1% of its exports. The brokerage also expects success in procuring orders from friendly countries to boost growth outlook.

Source: Antique Stock Broking note, Bloomberg

The shares of the company rose the most in intraday trade in a month to hit record high of Rs 2,579.95 on Monday. Trading volume is more than twice the 30-day average. The relative strength index is at 85, suggesting the stock may be overbought. HAL is on course to log gains for the 12th day.

All five analysts tracking the company maintain ‘buy’, according to Bloomberg data. The 12-month consensus price target implies an downside of 12.3%.