Stock picks: Hindustan Aeronautics, NTPC - two PSU stocks that can give up to 22% upside; check details

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Also Read: Stocks to buy this week: L&T, Exide, Aurobindo Pharma, BHEL among 12 technical picks; do you own any? Hindustan Aeronautics has a monopoly-like position in India’s defence aerospace sector. Along with this, the government’s push to procure indigenously designed & developed defence aircraft, the company is likely to be in a sweet spot to benefit from a long-term demand opportunity.

The company is involved in several major fighter jet projects (Tejas Mk2, AMCA, TEDBF) and helicopter projects (LUH, LCH, IMRH) which will replace the various outgoing fleets. The company’s FY23 closing order book stood at around ₹818 billion.

Manufacturing contracts account for ₹605 billion, including the landmark ₹457 billion order for 83 Tejas Mk 1As. There is also a highly visible ₹480 billion order pipeline for FY24.

Also Read: Stocks to buy: IDFC, GNA Axles, Zen Technologies among top fundamental picks by HDFC Securities Prabhudas Lilladher has initiated coverage on Hindustan Aeronautics with a ‘Buy’ rating at a target price of ₹2,266 per share, implying an upside of over 17% from Friday’s closing price. “HAL is a play on the growing strength & modernization of India’s air defence given its position as the primary supplier of India’s military aircraft, long-term sustainable demand opportunity, owing to the government’s push on procurement of indigenous defence aircraft, leap in HAL’s technological capabilities due to development of more advanced platforms, robust order book and improvement in profitability through scale and operating leverage," the brokerage firm said.

It estimates Revenue and Adjusted PAT CAGR of 11.0% and 14.2% over FY23-26E. (Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the