Industry profile: India has the third-largest military in the world and is the sixth-largest spender in defense. India is also one of the largest importers of conventional defense equipment and spends approximately 30% of its total defense budget on capital acquisitions. As a result, 60% of India’s defense-related requirements are currently met through imports. In addition, the ‘Make in India’ initiative by the Government focuses on increasing indigenous defense manufacturing to become self-reliant. Furthermore, the opening up of the defense sector for private sector participation is helping foreign OEMs enter into strategic partnerships with Indian companies and leverage opportunities in the domestic and global markets.
India’s focus on indigenous manufacturing in the defense sector has yielded certain benefits as the MoD, over the last two years, unveiled several products manufactured in India, including the LCA Tejas, the composites sonar dome, a portable telemedicine system for the armed forces, penetration-cum-blast and thermobaric ammunition designed explicitly for the Arjun tanks, the Varunastra heavyweight torpedo manufactured with 95% locally sourced parts and medium-range surface-to-air missiles. In addition, the Defence Acquisition Council under the MoD cleared defense sector transactions with more than ` 820 billion under the ‘Buy and Make (Indian)’ and ‘Buy Indian’ categories. These transactions include the procurement of Light Combat Aircraft, T-90 tanks, mini UAVs, and light combat helicopters.
Company profile: The company is engaged in the design, development, manufacturing, repair, upgrade, and servicing of a wide range of products, including aircraft, helicopters, aero-engine, and aerospace structures. The company was conferred Navratna status in 2007 and is the most significant PSU of Defence and the 39th largest aerospace company in the world as per revenue terms.
Shareholding Pattern: BSE Data
Financials and ratios : [table id=133 /]
Future prospectus: This company is significant when it comes to Defence. And the defense is one of the sectors resilient to economic trends. So the govt always needs to invest in making more defense products. HAL is one leading company. Though the company lost the Rafal deal, I believe that today or tomorrow, we see HAL getting it as Reliance defense is under a massive pile of debt, and there are nearly zero chances they will come out of it. So being the PSU, I believe that this is long-term buy stock.
