Hindustan Aeronautics Q1 Results Review- Tepid Execution; LCA Tejas Mk-1A Deliveries Awaited: ICICI Securities

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ICICI Securities Report

Hindustan Aeronautics Ltd. performance missed street’s estimates mainly on the back of weak execution. Key points:

  1. Ebitda rose 13% YoY to Rs 9.9 billion (highest-ever for Q1).

  2. Ebitda margin was at a healthy level of 22.8%.

  3. An income tax refund of Rs 4.4 billion resulted in profit after tax growth of 77% YoY.

  4. HAL made two investments worth (cumulatively) Rs 49.6 million with other defence companies.

We believe that the delivery of light combat aircraft Tejas Mk-1A would be a critical and the single most important enabler for the stock’s performance. As per our channel checks, the deliveries have been delayed owing to engine supply issues from GE.

Retain 'Add' and target price of Rs 5,170 (discounted cash flow based-methodology).

Click on the attachment to read the full report:

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