Class Assignment-02

Of
Fundamental Analysis
Company- Hindustan Aeronautics Limited

Under supervision of Dr. MONIKA KALANI

Mittal School of Business,
Lovely Professional University,
Phagwara-144401, Punjab, India, 2021

NAME- RIA HEMBROM Roll no. – RQ8E05A12

Registration no. – Course code- FINM693

12102014
Company profile –

Hindustan Aeronautics Ltd. (HAL) is an Indian state-owned defense and aerospace

company, which is headquartered in Bengaluru, India. The company is established
in the year 1940 and is one of the oldest and largest defense and aerospace
manufactures in the world.

The current share price of the company is Rs. 1478.50. The company has a market
capital of around Rs. 49,414 crores which means that the company value is large.

SWOT Analysis- It is a tool to assess internal strengths and weaknesses of the

organization as well as to identify potential opportunities and threats in its external
environment.

Strengths-

• The company is a strong performer because the stocks are with high
durability and valuation is also less than or equal to 50. These stocks are
considered strong performers as their valuation is getting expensive. The
company had 451.9% returns for over 5.6 years.
 • The company has low debt.
• Company with 0 promoter pledge
• Annual net profits and book value per share is improving for the last 2 years.
• The company has rising net flow and cash from operating activities. 375.3%
returns for Nifty 500 over 5.9 years has been seen.
• Other than that the company has massive workforce i.e. over twenty four
thousand employees, healthy revenue and consistence performance and the
results of investments are well proven and have a good track record.

Weaknesses-

• The company is centralized i.e. concentrated only on geographic scale

• It is dependent on volatile financial market

Opportunities-

• The companies which generates high profit has high ROCE and low PE
• Companies with 10% increase in share price over three months with rising
net profit growth
• Achieving organic growth through investments in other sectors
• Growth on global scale through partnerships, mergers and acquisitions

Threats-

• Companies with high market capital are one of the main threats for
Hindustan Aeronautics.
• Lower public shareholding
• Increasing trend in non-crore income
• Intensifying competition can be a huge

The competitor of Hindustan aeronautics limited is MTAR Technologies

Although MTAR Technologies is higher than the Hindustan Aeron in terms of

share price which is ranging at 1445.15 for HAL and Rs. 2000 for MTAR
Technologies. The P.E ratio of HAL is just 14.23 and for MTAR is 131.47, which
indicates that HAL is having an average P.E ratio while MTAR has highest which
indicates that the investors are expecting higher future earnings.
The earning per share (EPS) of HAL is Rs. 96.68 and has higher stock value than
14.98 of MTAR Technologies. The net profit margin of both the company has a
difference of 4%.

Whether to buy, sell or hold the share?

Hal is a very good value-based company having its P.E Ratio 14.2 compared to the
Indian Aerospace & Defense industry average of 15. The company is a strong buy
because the stock has given inverse head and shoulder breakout. For the quarter
ended at 31 December 2021 the company reported a consolidated total income of
Rs. 6088.66 crore up to 7.03% from last quarter’s total income of Rs. 5688.54
crore and up to 10.36% from last year same quarter. The company thus reported
net profit after tax of Rs. 935.28 crore in the latest quarter.