Shares of Hindustan Aeronautics (HAL) hit a 52-week high of Rs 1,245.90 after they surged 7 per cent on the BSE in the intra-day trade on Wednesday. The stock of the state-owned company surpassed its previous high of Rs 1,214.95, touched on August 25, 2020. It had hit a record high of Rs 1,424 on August 14, 2020.
HAL is a public sector enterprise, engaged in the design, development, manufacture, repair, overhaul, upgrade and servicing of a wide range of products including aircraft helicopters, aero-engines, avionics accessories and aerospace structures.
In the past five trading days, the market price of HAL has swelled 17 per cent after the company said it has signed $716 million deal with GE Aviation for procurement of 99 engines for manufacturing 83 LCA Tejas for Indian Air Force (IAF).
Earlier, on February 3, HAL had informed exchanges that the government had formally sealed the deal of around Rs 48,000 crore (inclusive of taxes and duties of around Rs 7,000 crore; infrastructure and design & development cost of around Rs 2,300 crore) for procuring 73 indigenous LCA Tejas Mk-1A fighter aircraft and 10 LCA Tejas Mk-1 trainer aircraft from the company.
The demand in Aerospace and Defence (A&D) manufacturing sector in the country is dominated by the demands from Defence sector. Defence projects, policies and funding of Government of India play crucial role in the growth of A&D industry in India and in-turn HAL, because of the major dependence on the Defence sector.
“There is a strong push from the government through the ‘Atmanirbhar Bharat Abhiyan’, the policy formulations and reforms post Covid, which is giving significant impetus to self-reliance and local production. This is expected to favorably impact the operations of the company. The Defence Services are looking for more indigenous options as compared to import and HAL is expected to benefit from this as there are a slew of indigenous products like LCA Tejas and its variants,” the company had said in its annual report for fiscal year 2019-20 (FY20).
At 01:23 pm, HAL was trading 6 per cent higher at Rs 1,231.60 on the BSE as compared to a 0.19 per cent rise in the S&P BSE Sensex. Trading volumes on the counter jumped over four-fold with nearly 2 million equity shares having changed hands on the NSE and BSE till the time of writing of this report.