Jefferies recommends Buy on Hindustan Aeronautics amid defence indigenisation and export focus, sees 12% upside
Jefferies gave a buy recommendation on Hindustan Aeronautics (HAL) with a target price of Rs 5,725, an upside potential of 12% from the previous day's closing price of Rs 5,103 per share.
Jefferies anticipates HAL to sustain double-digit growth over the next 3-5 years, bolstered by positive sentiments surrounding defence indigenisation and exports.
«HAL is in a sweet spot as the business has high technology entry barriers,» the global brokerage said in a note.
Additionally, Jefferies pointed out that relative valuations do not yet reflect the combination of high entry barriers and HAL's near-monopoly business.
As of 11:25 am, the stock was trading 1.7% higher at Rs 5,190 on the BSE. Notably, it has recorded a remarkable surge of over 64% in the past three months and has delivered multibagger returns of 450% in the last two years.
In Q4FY24, the defence PSU firm reported a consolidated net profit of Rs 4,309 crore, which was up 52% over Rs 2,831 crore reported in the corresponding quarter of the last financial year. On a sequential basis, it jumped 241% versus Rs 1,262 crore posted in Q3FY24.
The consolidated revenue from operations in the quarter under review stood at Rs 14,769 crore, which was up 18% from Rs 12,495 crore reported in the year-ago period. On a quarter-on-quarter basis, it was up 143% versus Rs 6,061 crore posted in Q3FY24.
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In technical terms, the relative strength index (RSI) of the stock is
