Hindustan Aeronautics (HNAL) Q2FY24

PL First Cut – Hindustan Aeronautics (HNAL) Q2FY24 – Amit Anwani – Research Analyst, Prabhudas Lilladher Pvt Ltd

Hindustan Aeronautics (HNAL) Q2FY24 Results First Cut – Mixed performance; margin beats estimates

(CMP: Rs2,058 | MCap: Rs1,377bn)

Q2 Result summary

▪️ Consolidated revenue rose 9.5% YoY to Rs56.4bn (consensus estimate of Rs57.5bn), while gross margin declined by 565bps YoY to 58.3%.

▪️ EBITDA fell 5.8% YoY to Rs15.3bn (consensus estimate of Rs14.9bn), with EBITDA margin contracting by 441bps YoY to 27.1% (consensus estimate of 25.9%), driven by the gross margin contraction and a 40.4% YoY fall in expenses relating to capital & other accounts to Rs2.9bn (down 437bps YoY as a % of sales), which is subtracted from operating expenses. This was partially offset by lower direct Input to WIP/expenses capitalised, which came in at Rs695mn vs Rs3.5bn in Q2FY23 (down 562bps YoY as a % of sales).

▪️ PAT rose slightly by 1.3% YoY to Rs12.4bn (consensus estimate of Rs13.1bn), aided by higher other income (up 81.3% YoY to Rs4.7bn), despite a 38.8% YoY increase in depreciation & amortization expenses to Rs3.5bn.

▪️ At the CMP, the stock is trading at 26.0x/22.6x/20.0x FY24/FY25/FY26E. We have a Buy rating on the stock with a TP of Rs2,266.