The brokerage has expressed an expectation of 50 percent upside while recommending investment in HAL. According to the report, strong growth can be seen in the company’s exports going forward.
Best Defence Stocks to Buy: Even though there has been a big decline in the stock market this year, some stocks gave high returns to the investors. Defense sector stock Hindustan Aeronautics (HAL) is also included in the stocks giving high returns this year. HAL has grown by more than 40 percent this year and more than 50 percent in the last one year. Brokerage house ICICI Securities is looking bullish on this. The brokerage has expressed an expectation of 50 percent upside while recommending investment in HAL. According to the report, strong growth can be seen in the exports of the company going forward. At the same time, the company will also get the benefit of Make in India Initiative in the defense sector.
Rerating possible due to increase in exports
Brokerage house ICICI Securities has given a big target of Rs 2618 while recommending investment in HAL stock. In terms of current price of Rs 1725, 51% return is possible in this. According to the brokerage, HAL can get a further export order of $ 500 million in defense aircraft contracts for the air forces of Egypt, Malaysia and Nigeria. With the finalization of the export order, rerating can be seen in the company. The pickup in domestic ordering has also opened the way for better price offerings globally. HAL can benefit from this and the strength of its customer base can be seen. The company has a strong portfolio of products in Fixed Wing and Rotary Wing.
Make in India will also get boost
Recently, the central government had taken a big decision to promote Make in India. The MoD had banned the import of 107 products. This list includes subsystems and components of major weapon systems and platforms. According to the Defense Ministry, these sub systems and components will be manufactured in the country itself. At the same time, after a time limit, they will be bought only from the domestic industry. The list includes equipment needed in the production of submarines, helicopters, tanks, missiles and communication systems. There are 22 such items in the list, which will be made in the country by the public sector company Hindustan Aeronautics (HAL).
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(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)