HAL shares jump nearly 3% on ₹2,890-crore deal with Defence Ministry
Upstox
2 min read • Updated: March 18, 2024, 12:44 PM
Summary
The contract comprises the installation of modern Avionics Systems and Primary Role sensors which will increase operational capability of the Dornier Aircraft. The Mid Life Upgrade (MLU) of 25 Dornier Aircraft along with associated equipment for the Navy is valued at around ₹2890 crore.
Hindustan Aeronautics Ltd shares jumped up to 3% on Monday after the public sector undertaking (PSU) announced signing a deal worth ₹2,890 crore with the Defence Ministry for the upgrade of 25 Dornier aircraft.
HAL shares opened higher and gained further 2.73% to hit a high of 3,184 on NSE in opening deals. Around 12 lakh shares changed hands on NSE in a traded value of ₹377 crore.
The defence sector PSU in an exchange filing said that the Defence Ministry on March 15 signed an agreement with HAL for Mid Life Upgrade (MLU) of 25 Dornier Aircraft.
The MLU contract along with associated equipment for the Navy is valued at around ₹2890 crore, the filing stated.
The contract comprises the installation of modern Avionics Systems and Primary Role sensors which will increase operational capability of the Dornier Aircraft.
The aircraft has been deployed by the Indian Navy for Maritime Surveillance, Electronic Intelligence, Coastal Surveillance and Development of Maritime Domain Awareness.
The aircraft also plays a role in search and rescue, medical/casualty evacuation and communication link.
The company on March 14 announced the signing of two other deals worth ₹8,073.17 crore with the Defence Ministry.
Under the deals, as many 34 Advanced Light Helicopters Dhruv Mk lll along with Operational Role Equipment will be acquired for Indian Army (25 ALHs) and Indian Coast Guard (09 ALHs).
The deals mark a major move towards indigenisation in defence manufacturing, HAL noted in an exchange filing.
Hindustan Aeronautics Ltd has been a core defence aviation equipment supplier to the government.
The order book of HAL remained healthy at ₹84,814 crore as of December 2023 against ₹83,858 crore as of September 2023.
The order book included manufacturing contracts for various models of helicopters and aircraft worth around ₹56,569 crore.
The repair and overhauling (ROH) order book was ₹28,277 crore in a boost to its gross margins.
HAL shares pared some of the gains in line with weakness in the broader market in late morning deals. The stock was trading 0.64% higher at ₹3,118.95 apiece on NSE at 12:40 PM.