Shares of Hindustan Aeronautics Limited (HAL) soared to an unprecedented peak last Friday, reaching ₹2110.5, but saw a slight decline today to ₹2055.4. The movement follows the company's announcement of a modest year-over-year increase in its second-quarter net profit, which rose to ₹1236.67 crore, and a revenue boost to ₹5635.7 crore (INR100 crore = approx. USD12 million).
Despite these gains, HAL experienced a 4% year-over-year reduction in its order book and a 6% fall in its second-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA). The performance dip has been largely attributed to delays in programs linked to Russia.
In response to HAL's financial outcomes, brokerage firm CLSA has maintained an outperform rating on the stock. CLSA highlighted HAL's strong cash position but also pointed out potential risks associated with the Indian government's consideration of transferring major aerospace programs to a public-private partnership (PPP) model.
Adding to the positive outlook, Morgan Stanley (NYSE:MS) has retained an overweight stance on HAL with a price target set at ₹2182.
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