Multibagger stock HAL soars to 52-week high today; know why

About the company 

Hindustan Aeronautics Ltd (HAL) which is engaged in the business of defence manufacturing hit a 52-week high today at Rs 2,443.85. HAL was conferred with the ‘Navratna’ status by the Government of India in June 2007. It is 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. The Company has been set up to meet the requirements of the Indian Defence Forces (namely Indian Airforce, Indian Navy, Indian Army and Coast Guard) in the area of Aerospace.

Stock Performance 

Yesterday, the stock closed at Rs 2,343.65. Today, it opened at Rs 2,370 and closed at Rs 2,382.30, up by 1.65%. Today, shares of the company hit a 52-week high at Rs 2,443.85 while its 52-week low stands at Rs 1,150.50. The company currently boasts a market capitalization of approximately Rs 1,59,300 crore. Over the past year shares of the company have given staggering returns of 73%, in the same time frame BSE Industrial has changed by 54.82%. In the past two years shares of the company have given multibagger returns of 273.55%, in the same time frame BSE Industrial has changed by 98.62%. As of March 31, 2023 company order book stands at Rs 81,784 crore.

Reason for the price action 

Due to growing national security concerns and ongoing territorial disputes with Pakistan and China over control of the Northern State of Kashmir and the North Eastern State of Arunachal Pradesh respectively demand for defence equipment in India has increased.

Today Defence Acquisition Council (DCA) approves capital acquisition proposals worth Rs 2.23 lakh crore to enhance the operational capabilities of the Armed Forces and 98% to be sourced from domestic industries. The approval proposal contains to purchase of 97 Tejas Aircraft which is Light Combat Aircraft (LCA)  and 156 Prachanda Helicopters which is Light Combat Helicopters (LCH) from HAL. Additionally upgrade plan of 84 Su-30MKI fighters has also been included from HAL.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.