HAL 4200 CE Recommended above 162, Sl 147, Trgt 180.
HAL is a vital player in the global aerospace ecosystem, contributing to India’s aerospace and aviation advancements.
- Government support: HAL is a state-owned enterprise that receives funding for research and development, preferential treatment in contracts, and help with navigating regulations.
- Indigenous development: HAL has invested in developing its own R&D capabilities and has designed and developed several platforms, including the HF-24 Marut, the Dhruv, the LUH, and the LCH.
- Manufacturing capabilities: HAL has advanced manufacturing facilities and technologies, with a focus on quality control and meeting international standards.
- Partnerships: HAL has formed strategic alliances with international defense manufacturers to enhance its technological proficiency and market reach.
- Skilled workforce: HAL has a well-trained and skilled workforce.
- Profit growth: HAL has delivered good profit growth over the past five years.
- Return on equity: HAL has a good return on equity (ROE) track record.
- Reduced debt: HAL has reduced its debt and is almost debt-free.
Analysis
- PE ratio: Price to Earnings ratio, which indicates how much an investor is willing to pay for a share for every rupee of earnings. A general rule of thumb is that shares trading at a low P/E are undervalued (it depends on other factors too). Hindustan Aeron has a PE ratio of 33which is high and comparatively overvalued.
- Share Price: – The current share price of Hindustan Aeron is Rs4340. One can use valuation calculators of ticker to know if Hindustan Aeron share price is undervalued or overvalued.
- Return on Assets (ROA): – Return on Assets measures how effectively a company can earn a return on its investment in assets. In other words, ROA shows how efficiently a company can convert the money used to purchase assets into net income or profits. Hindustan Aeron has an ROA of 66% which is a bad sign for future performance. (higher values are always desirable)
- Current ratio: – The current ratio measures a company’s ability to pay its short-term liabilities with its short-term assets. A higher current ratio is desirable so that the company can be stable to unexpected bumps in business and economy. Hindustan Aeron has a Current ratio of 73.
- Return on equity: – ROE measures the ability of a firm to generate profits from its shareholders’ investments in the company. In other words, the return on equity ratio shows how much profit each rupee of common stockholders’ equity generates. Hindustan Aeron has a ROE of 90% .(higher is better)
- Debt to equity ratio: – It is a good metric to check out the capital structure along with its performance. Hindustan Aeron has a Debt to Equity ratio of 00 which means that the company has a low proportion of debt in its capital.
- Sales growth: – Hindustan Aeron has reported revenue growth of 82% which is poor in relation to its growth and performance.
- Operating Margin: This will tell you about the operational efficiency of the company. The operating margin of Hindustan Aeron for the current financial year is 09%.
- Dividend Yield: – It tells us how much dividend we will receive in relation to the price of the stock. The current year dividend for Hindustan Aeron is Rs35 and the yield is 81 %.
- Earnings Per Share: – It tells us how much profit is allocated to each outstanding share of a common stock. The latest EPS of Hindustan Aeron is Rs 86. The higher the EPS, the better it is for investors.
The stock closed yesterday above its descending trend and opened today with a positive big candle followed by a green candle closed above the pivot point. The risk-reward ration was favorable in the ITM Call Option and hence recommended.