HAL – A flourishing flight

Hindustan Aeronautics Limited (HAL) is an Indian state-owned aerospace and defence company, headquartered in Bangalore. The company was established in 1940, HAL is amongst the oldest and largest aerospace and defence manufacturers in the world today. HAL initiated their aircraft manufacturing in 1942 with licensed production of Harlow PC-5, Curtiss P-36 Hawk and Vultee A-31 Vengeance for the Indian Air Force. Presently, HAL has 11 dedicated Research and development (R&D) centres and 21 manufacturing divisions under 4 production units in India.

HAL is managed by a Board of Directors appointed by the President of India through the Ministry of Defence, Government of India. HAL is currently involved in designing and manufacturing of fighter jets, helicopters, jet engine and marine gas turbine engine, avionics, software development, spares supply, overhauling and upgrading of Indian military aircraft.

The HAL HF-24 Marut fighter-bomber was the first original fighter aircraft made in India.

The company is the India’s biggest manufacturer in defence aeronautics, with the competence to design, manufacture, repair, and service aircrafts, helicopters, aero engines, avionics.

Currently the company is involved into multiple government flagship programmes, such as manufacturing of Tejas fighter jets. The company has been able to develop excellent technical capabilities. The company has assistance through the partnership with global giants namely BAe, Safran, Russian Helicopters, Israel Aerospace Industries, etc. The company is independent in the manufacturing and servicing of most of the critical aircraft required by the Indian Air Force.

Quarterly Growth Walkthrough

Hindustan Aeronautics Limited has registered a net profit of ₹1,154 crore, which is a growth of 24% year-on-year as compared with ₹938 crore which was registered in the same quarter of the previous year.

Revenue from Operations has declined marginally by 4% to ₹5,666 crore in the December quarter versus ₹5,894 crore in the December quarter of the previous year.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) has severely declined by 31% to ₹986 crore in Q3FY23 as compared with ₹1,431 crore YoY, and with the EBITDA margin at 17.4%.

Total expenses of the aerospace company have increased by 5% to ₹4,680 crore for the December quarter from ₹4,463 crore in the corresponding quarter of the previous year.

Word from the PM

Prime Minister Narendra Modi had spoken about the success of HAL at a ceremony to dedicate India’s largest helicopter manufacturing facility in Karnataka’s Tumakuru.

PM Modi had said that “HAL was used as an excuse to level false allegations against the government. A conspiracy was launched to use its name to provoke people that wasted hours and hours of parliament time. (But) no matter how big the lie is, how many times it is repeated and who ever makes it, it loses in front of the truth one day”.

The prime minister also said that the HAL facility will produce business valued greater than ₹4 lakh crore in the upcoming years and will supply a variety of helicopters to the armed forces.

Technical Analysis

HAL Weekly Candlestick Chart on Sharekhan’s TradeTiger

HAL stock price continues to face oppression along the 261.8% retracement level as the latest candle formed shows the resistance faced by the price at this level. The stock remains to be highly overbought as the price has extended far above the 200-day exponential moving average and the MFI is at 78 points which confirms the overbought condition of this stock. Traders can short the stock with a strict stop loss as the stock makes a double top candlestick pattern soon.

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