HAL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 My Thought Process

You're asking for a full-spectrum fundamental analysis of Hindustan Aeronautics Ltd (HAL), with a numeric rating and strategic investment guidance. I see you're focused on long-term value and timing an entry, so I’ve weighed profitability, capital efficiency, valuation, and business durability to give you a clear verdict.

📊 Fundamental Analysis of HAL

🔍 Core Financials

Profitability

EPS: ₹123 — strong earnings base.

ROE: 26.0%, ROCE: 33.9% — exceptional return metrics, signaling efficient capital deployment.

PAT Qtr: ₹1,377 Cr vs ₹3,958 Cr — sharp drop due to seasonality and order execution cycles

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Leverage & Liquidity

Debt-to-equity: 0.00 — zero debt, highly resilient balance sheet.

Dividend Yield: 0.82% — modest, but consistent.

Cash Flow

Strong operating cash flows supported by a ₹94,000 Cr+ order book

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EBITDA margins have expanded to 26.7%, reflecting operational efficiency

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📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 39.4 Reasonable vs industry PE of 75.3 — undervalued

P/B Ratio ~9.3 Premium valuation, justified by high ROE

PEG Ratio 2.21 Slightly elevated — growth priced in

Intrinsic Value ~₹5,200–₹5,400 Near current price — fair valuation

🛩️ Business Model & Competitive Edge

Segment Leadership: India’s largest aerospace and defence PSU; key supplier to Indian Air Force.

Diversified Portfolio: Aircraft, helicopters, engines, and now space launch vehicles via SSLV tech transfer

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Moat: Deep integration with defence ecosystem, proprietary tech, and long-term government contracts.

Growth Drivers

Tejas Mk-1A, Su-30 upgrades, UAVs, and civil MRO expansion

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SSLV production for ISRO and global small satellite market

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📈 Technical & Entry Guidance

Current Price: ₹4,857

DMA 50/200: ₹4,608 / ₹4,447 — strong uptrend.

RSI: 70.5 — overbought zone.

MACD: 75.9 — bullish momentum.

🎯 Entry Zone

Ideal Buy Range: ₹4,600–₹4,750 — wait for a pullback.

Stop Loss: ₹4,400

Target: ₹6,000–₹6,360 in medium term

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🕰️ Long-Term Holding Outlook

Hold if invested: Strong fundamentals, zero debt, and robust order pipeline.

Buy on dips: Especially if price retraces to ₹4,700 zone.

Growth Triggers: Defence indigenization, space vertical, and export opportunities.

⭐ Fundamental Rating

4.7

Let me know if you’d like a peer comparison with BEL or BDL next!

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