HAL Results for Q1 FY25: Is This the Right Time to Buy Hindustan Aeronautics?

Hindustan Aeronautics Limited (HAL), India’s premier aerospace and defence company, has released its financial results for the first quarter of fiscal year 2025. As the sole Indian corporation dedicated to aircraft manufacturing and related services, HAL’s performance offers valuable insights into the health of India’s aerospace industry.

In this comprehensive analysis, we’ll delve into HAL’s Q1 FY25 results, examining key financial metrics, operational highlights, and market performance. Let’s begin!

About Hindustan Aeronautics

Located in Bangalore, Hindustan Aeronautics is an Indian Public Sector company operating in the defence and aerospace segments. 

As the sole Indian corporation with a focus on aircraft manufacture, maintenance, and associated services, HAL plays a crucial role in India’s defence program. Hindustan Aeronautics manufactures, repairs, and maintains aircraft and helicopters. 

Hindustan Aeronautics Q1 Results

The state-owned defence corporation Hindustan Aeronautics Ltd. (HAL) announced a consolidated net profit of ₹1,436 crore for the first quarter of FY25, a significant increase of 76.5% from ₹814.2 crore in the same quarter of the previous fiscal year.

The PSU defence company had an 11% growth in operating revenue in Q1FY25, from ₹3,915.3 crore to ₹4,347.5 crore, year over year (YoY). Year over year, other income increased from ₹409.9 crore to ₹736.5 crore.

In terms of operations, earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 13% to ₹990.6 crore in the June 2024 quarter from ₹876.8 crore, while the EBITDA margin slightly improved to 22.8% from 22.4%, year over year.

The price of Hindustan Aeronautics’ stock has increased by more than 141% during the previous 12 months, yielding multi-bagger gains. 

After the results, the HAL share price is trading at 4,658.90, down by 0.90%, as of August 14, 2024.

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FY25 vs. FY24: Quarterly comparison of HAL results 

Consolidated Results	Jun 24	Mar 24	Dec 23
Net profit (₹ cr.)	1,436	4,292	1,254
Operating Profit (₹ cr.)	994	5,896	1,434
Profit before tax (₹ cr.)	1,582	5,778	1,681
EPS (₹)	21.47	64.18	18.74

Current financials

Here are the current financials of Hindustan Aeronautics as of August 14, 2024. 

Market capitalisation (₹ cr.)	3,11,739
Stock P/E	41.0
ROCE	38.9%
ROE	28.9%
Dividend Yield	0.72%

Shareholding pattern (as of June 2024) 

Promoters	71.64%
FIIs	11.68%
DIIs	8.81%
Public	7.86%

Also read: Jio Financial Services Q1 FY25 results: Is it the right time to buy?

Should you buy HAL after the Q1FY25 HAL results?

Although HAL has performed less than what analysts have expected and compared to the March quarter, the company has performed well on a year-over-year basis. The company is almost debt-free and has delivered promising profit growth of 26.5% CAGR over the last 5 years. 

However, HAL also comes with some risks that you need to consider before investing in the stock. Over the last 3 years, promoter holdings have decreased by 3.51%. Coming to the financials, HAL has delivered poor sales growth over the past five years, 8.71%. 

 

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Disclaimer: The information provided in this blog is for educational purposes only and should not be construed as financial advice.