1:2 Stock Splits, 440% Dividend Paid: Defence PSU Turns Rs 1.9 Lakh To Rs 9.5 Lakh In 6 Years; BUY?

Hence, HAL shares have more than doubled investors’ money in six years. HAL has promising fundamentals due to its strong order book.

From its 52-week high of Rs 3,428.75 apiece, HAL is cheaper by nearly 11% but is currently trading up by a whopping 147.20% from its 52-week low of Rs 1,237.50 apiece. The stock’s 10% upper circuits and lower circuits are at Rs 3,365.05 and Rs 2,753.25 apiece respectively.

HAL’s share price is currently at Rs 3,059.15 apiece, with a market cap of Rs 2,04,588.30 crore. On March 19, the stock fell by 2% due to a bearish market tone. This brings an opportunity to buy-on-dips in HAL shares.

HAL Stock Split Charm:

The CPSE giant carried its first stock split in September 2023, in the ratio of 1:5. The face value of Rs 10 of HAL was trimmed to Rs 5, which came into effect on September 28th of last year. On the ex-split day, the stock price was at Rs 1,888.90 apiece on BSE.

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After launching its IPO in March 2018, HAL’s share price debuted market on March 28 of that year. During its IPO time, the lot size for retail investors was 12 equity shares, while the issue price was fixed at Rs 1,215 apiece.

For retail investors, the minimum lot of 12 equity shares was one, while the maximum buying was 13 lots. Hence, the minimum bid lot of 12 shares and a maximum of 156 shares.

Let’s suppose, if you bought the maximum lot size, you will be holding 156 shares worth Rs 1,89,540 (156 X Rs 1,215) post-IPO.

If you held HAL shares to its stock split in September last year, then your number of 156 equity shares would rise to 312 equity shares (156×2). The equity shares double as the face value is reduced to half.

And if you further continued to hold HAL shares up till now, then your investment has climbed to Rs 9,54,454.8. This will be a surge of a whopping 403.56% in your investment value.

HAL Dividend:

Apart from the stock split, HAL is also among dividend-paying stocks. As per Trendlyne data, HAL has delivered up to 11 dividends since March 2019. At the latest, the company paid dividends up to Rs 57 per share. Currently, it has a dividend yield of 1.29%.

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HAL Order Book:

Earlier this month, CARE Rating reaffirmed its rating on HAL. The rating agency pointed out that HAL’s order book remains healthy at Rs 84,814 crore as of December 31, 2023 (Rs 83,858 crore as of September 30, 2022) including manufacturing orders mainly for various models of helicopters and aircraft of around Rs 56,569 crore which provides long-term revenue visibility. The repair and over-hauling (ROH) order book where the gross margins are relatively higher has also remained healthy at Rs 28,277 crore, providing stability to its revenue.

Going ahead, CARE Ratings said, “as strongly articulated by the company, HAL’s collection period is expected to remain under control which would result in continued low reliance on debt and maintenance of significant surplus liquidity notwithstanding the dividend pay-out. The ratings also take note of HAL’s high dependence on the Ministry of Defence, GoI, for the contracts and the annual budget allocation towards strengthening the defence infrastructure, apart from the risk associated with time or cost overrun in execution which might impact profitability.”

The order flow continues to be robust in HAL.

Last week, HAL won two orders. Firstly, it signed a contract with the Defence Ministry for a Mid-Life Upgrade (MLU) of 25 Dornier Aircraft along with associated equipment for the Indian Navy at a cost of around Rs 2,890 Crore. Before this, HAL also signed two contracts on March 13 for a combined value of Rs 8,073.17 crore for the acquisition of 34 Advanced Light Helicopters (ALH) Dhruv Mk along with Operational Role Equipment for Indian Army (25 ALHs) and Indian Coast Guard (09 ALHs)

HAL Share Price Target:

At the latest, ICICI Direct has set a target price of Rs 3,660 on HAL. Moreover, Morgan Stanley has maintained an overweight on HAL shares for a target price of Rs 3129/sh. The outlook is neutral. Earlier, CLSA maintained an Outperform on the company with a Positive outlook for a target price of Rs 3225/sh.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.