Yahoo Finance Hindustan Aeronautics' stock surges 4% on approval for Sukhoi fighter jets procurement
Hindustan Aeronautics Ltd (HAL) saw a 4% intraday surge in its stock price on Monday, following the Indian government's decision to procure 12 more Sukhoi Su-30MKI fighter jets. The aircraft are set to be manufactured at HAL's Nashik factory, as part of defense ministry's procurement proposals valued at approximately ₹45,000 crore ($6 billion). The estimated cost for these 12 Sukhoi jets is around ₹1,200 crore ($160 million).
HAL's share price reached an intraday peak of ₹4,108, pushing its market capitalization to ₹1.33 lakh crore ($18 billion). The company's shares had opened at a higher rate of ₹4,100 compared to the previous closing figure of ₹3,947.40 on the BSE.
The recent surge follows an impressive year for HAL, with its share price nearly doubling from a 52-week low of ₹2,242 recorded on September 28, 2022. The company's stock hit a 52-week high of ₹4,180 on September 11, 2023. In 2023 alone, HAL stock rose by 57%, witnessing a six-month surge of 51%. However, it experienced a slight decline of 1.5% over the past week as investors cashed in on higher levels.
Beyond the procurement approval, HAL shares have been under the spotlight due to an upcoming record date for equity share subdivision. Set for September 29, 2023, this date will determine shareholder eligibility for the proposed share split. During its recent Annual General Meeting (AGM), shareholders approved a stock split from one equity share with a face value of ₹10 each fully paid up into two equity shares worth ₹5 each fully paid up.
In a recent report by ICICI Securities, HAL is poised to benefit from the defense ministry's procurement proposals. The brokerage maintained an 'ADD' rating on HAL shares with a target price of ₹4,350 ($1 = INR83.325) per share.
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