HAL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.7

🧾 Core Financial Analysis

📈 Profitability & Growth

PAT Qtr: ₹3,977 Cr vs ₹1,440 Cr — despite a -7.71% QoQ drop, the absolute profit remains strong.

EPS: ₹125 — excellent, supports long-term valuation.

ROE (26.1%) & ROCE (33.9%) — outstanding return metrics, indicating superior capital efficiency.

💰 Cash Flow & Debt

Debt-to-Equity: 0.00 — debt-free, a major strength for a capital-heavy sector.

Dividend Yield: 0.89% — modest but consistent.

Cash Flow: Likely robust given strong profitability and zero debt.

📊 Valuation Metrics

Metric Value Insight

P/E Ratio 36.0 Reasonable vs industry PE of 68.0 — undervalued relative to peers

P/B Ratio ~8.6 High, but justified by strong ROE

PEG Ratio 1.99 Slightly elevated — growth priced in

Intrinsic Value Estimated ~₹4,800–₹5,200 Based on earnings and sector benchmarks

✈️ Business Model & Competitive Advantage

Sector: Aerospace and defense — Hindustan Aeronautics Ltd is India’s premier defense PSU.

Core Operations: Design, manufacture, and maintenance of aircraft, helicopters, engines, and avionics.

Moat: Strategic importance, government contracts, and indigenous defense capabilities.

Growth Drivers: Rising defense budget, export opportunities, and Make-in-India initiatives.

Risks: Policy dependency, long gestation projects, and geopolitical factors.

📉 Technical & Sentiment Indicators

RSI: 29.7 — oversold zone, potential for rebound.

MACD: -94.6 — bearish momentum, but may be bottoming out.

DMA 50 & 200: Price below 50 DMA but above 200 DMA — short-term weakness, long-term strength.

Volume: Above average — suggests accumulation at lower levels.

💡 Investment Guidance

📌 Entry Zone (If Undervalued)

₹4,300–₹4,450 — current price is attractive for accumulation.

RSI and volume suggest a potential reversal; ideal for staggered entry.

📈 Long-Term Holding View

Strong buy for long-term investors.

Strategic moat, debt-free status, and high return metrics make HAL a core defense play.

Hold with a 3–5 year horizon for potential upside toward ₹5,800–₹6,200 as defense capex accelerates.

Would you like a comparison with BEL or BDL to explore defense sector dynamics further?

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