HINDUSTAN

AERONAUTICS
LTD.
One Page Profile
DuPont Analysis
Altman’s Z Score

Prepared For
SUMIT DUBEY

8017579499 [email protected]
 HINDUSTAN AERONAUTICS LTD - One Page Profile

Hindustan Aeronautics Limited (HAL) is an Indian public sector aerospace and defence company,
headquartered in Bangalore. Established on 23 December 1940, HAL is one of the oldest and largest
aerospace and defence manufacturers in the world. HAL currently has 11 dedicated Research and
development (R&D) centres and 21 manufacturing divisions under 4 production units spread across India.
INR (Crs) source: Yahoo finance
Key Financial Matrics Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Share Price - 5 Y
Total Sales 21,445.4 22,882.4 24,620.2 26,927.9 30,380.8 6000
Sales Growth (y-o-y) 7.18% 6.70% 7.59% 9.37% 12.82% 5000
Gross Profit Margin (%) 58.52% 69.02% 60.57% 53.02% 50.65%
4000
EBITDA Margin (%) 22.76% 23.34% 22.01% 24.77% 32.06%
EBIT Margin (%) 18.10% 18.29% 17.51% 18.14% 27.43% 3000
Net Profit Margin (%) 13.25% 14.16% 20.66% 21.58% 25.00% 2000
Earnings Per Share (In Rs.) 42.49 48.44 76.05 86.89 113.56 1000
EPS Growth (y-o-y) 21.14% 13.98% 57.02% 14.25% 30.70%
0
Dividend Per Share (In Rs.) 16.62 15.00 20.00 27.50 22.00
Dividend Growth (y-o-y) 67.93% -9.77% 33.33% 37.50% -20.00%
source: Yahoo finance
Key Financial Ratios Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Volumes - 5 Y
Price to Earnings 6.12x 10.27x 9.76x 15.72x 29.30x 30m
EV/EBITDA 4.72x 4.90x 6.52x 10.66x 20.13x 20m
EV/Sales 1.07x 1.14x 1.44x 2.64x 6.45x 10m
Price to Book Value 1.32x 2.16x 2.58x 3.89x 7.66x
0m
Return on Equity (%) 21.53% 21.08% 26.40% 24.72% 26.15%
Return on Capital Employed (%) 24.31% 26.31% 30.50% 30.59% 38.90%
source: equitymaster source: screener
Top 10 Shareholders No. Shares (in Crs) % holding Market Value (in Crs) Shareholding Pattern
President of India 24.0 71.65% 104519
HDFC Trustee Company Ltd. 1.4 4.25% 6197 Promotors 71.64%
LIC 1.2 3.51% 5237
ICICI Prudential Midcap Fund 0.5 1.41% 2051 FII 12.42%
Nippon Life India Trustee Ltd. 0.2 0.73% 1047
Government of Singapore 0.2 0.71% 1047
DII 9.58%
BNP Paribas Arbitrage 0.2 0.50% 742
Max Life Insurance Co Ltd PPU 0.2 0.47% 698
Public 6.36%
Vanguard Emerging Markets Stock Index Fund 0.1 0.39% 567
Franklin India Balanced Advantage Fund 0.1 0.38% 567
source: Annual Report 2023
Top 10 Shareholders Designation Remuneration Capital Structure
Shri R Madhavan Director 0.98 Share Price as on 18 May 2024 4364.05
Shri Alok Verma Director(HR) 1.05 No. of Shares o/s 67
Shri Arup Chatterjee Director(R&D) 0.89 Market Capitalization 2,91,591
Shri C.B. Ananthakrishnan Director & CFO 0.65 Less: Cash & Equivalent (26,422)
Shri Jayadeva E P Director(O) 0.48 Add: Total Debt 0.35
Independent Directors are paid a sitting fee of `30,000/- per meeting of the Board and 25,000/- per Committee Meeting, as approved by the Board Add: Minority Interest 0
within the ceiling fixed under the Companies Act and as per the guidelines issued by the Government of India. Enterprise Value 2,65,169

Recent Updates
Signed MoU with GE for the transfer of technology for GE 414 engine, aiming for 80% indigenization.
Working on integrating indigenous systems like Uttam radar onto LCA Mark 1A to increase indigenous content
Projected indigenous content to be above 65% for LCA Mark 1A.
EBITDA margin guidance of 26%-27% for the current financial year.
Expecting manufacturing growth of around 15% to 18% annually.
Revenue from operations almost stood at 30,381 crores as compared to 26,928 crores in the previous year, marking an increase of 13%.
 HINDUSTAN AERONAUTICS LTD
(HAL | BSE Code: 541154)
INR 4364.05
52 Week (High - INR 4609 & Low - 3292)

About the company

Tata Motors Limited is an Indian multinational automotive company, headquartered in Mumbai and part of the Tata
Group. The company produces cars, trucks, vans, and busses. Tata Motors was founded in 1945, as a locomotive
manufacturer. Tata Group entered the commercial vehicle sector in 1954 after forming a joint venture with Daimler-
Benz of Germany in which Tata developed a manufacturing facility in Jamshedpur for Daimler lorries.

Financial Summary
Revenues (INR Crs.) Net Profit (INR Crs.) Average Total Assets (INR Crs.)
7,595 73,587
64,686
30,381 56,603
26,928 5,811 53,579
22,882 24,620
5,087

3,239

2021 2022 2023 2024 2021 2022 2023 2024 2021 2022 2023 2024

Return on Equity (%) Return on Asset (%) Financial Leverage

3.75x
10.32%
3.27x
29.37% 28.90% 8.99% 8.98% 3.02x
27.17% 2.80x
22.68%
6.05%

2021 2022 2023 2024 2021 2022 2023 2024 2021 2022 2023 2024

Recent Updates
Order Book and Outlook
 Order book as of the current date stands at 94,000 crores, with expectations to increase to 1,20,000 crores by the end of
the fiscal year.
 Anticipated contracts for LCA Mark 1A, Light Combat Helicopters, Advanced Light Helicopter, Dornier aircrafts, and Utility
Helicopter Marine.
 Expecting orders totaling around 1,60,000 to 1,70,000 crores in the next 18 months to 3 years.
 Planning to keep manufacturing lines occupied till 2032.
Export Opportunities
 Actively pursuing export opportunities for platforms like ALH and LCH.
 Engaged in discussions with countries like Philippines, Argentina, Nigeria, and Egypt for potential orders.
 Expecting at least one breakthrough order in the current financial year.
Technology Transfer and Indigenous Development
 Signed MoU with GE for the transfer of technology for GE 414 engine, aiming for 80% indigenization.
 Working on integrating indigenous systems like Uttam radar onto LCA Mark 1A to increase indigenous content.
 Projected indigenous content to be above 65% for LCA Mark 1A.

Page 1
Dupont Analysis - Return on Equity & Return on Asset
Return on Equity (ROE)
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Net Profit 1,987.4 2,346.1 2,842.0 3,239.5 5,086.5 5,811.2 7,595.0
Average Shareholder Equity 11,011.1 10,780.3 12,637.3 14,283.9 17,316.1 21,385.1 26,276.3
Return on Equity 18.05% 21.76% 22.49% 22.68% 29.37% 27.17% 28.90%

ROE - Dupont Equation

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Net Profit 1,987.4 2,346.1 2,842.0 3,239.5 5,086.5 5,811.2 7,595.0
Revenue 18,519.3 20,008.5 21,445.4 22,882.4 24,620.2 26,927.9 30,380.8
Net Profit Margin (A) 10.73% 11.73% 13.25% 14.16% 20.66% 21.58% 25.00%

Revenue 18,519.3 20,008.5 21,445.4 22,882.4 24,620.2 26,927.9 30,380.8

Average Total Asset 50,070.7 49,951.8 52,802.3 53,578.6 56,602.8 64,686.5 73,586.6
Asset Turnover Ratio (B) 0.4x 0.4x 0.4x 0.4x 0.4x 0.4x 0.4x

Average Total Asset 50,070.7 49,951.8 52,802.3 53,578.6 56,602.8 64,686.5 73,586.6
Average Shareholder Equity 11,011.1 10,780.3 12,637.3 14,283.9 17,316.1 21,385.1 26,276.3
Equity Multiplier (C) 4.55x 4.63x 4.18x 3.75x 3.27x 3.02x 2.80x

Return on Equity (A*B*C) 18.05% 21.76% 22.49% 22.68% 29.37% 27.17% 28.90%

Return on Asset
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Net Profit 1,987.4 2,346.1 2,842.0 3,239.5 5,086.5 5,811.2 7,595.0
Average Total Asset 50,070.7 49,951.8 52,802.3 53,578.6 56,602.8 64,686.5 73,586.6
Return on Asset 3.97% 4.70% 5.38% 6.05% 8.99% 8.98% 10.32%

ROA - Dupont Equation

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Net Profit 1,987.4 2,346.1 2,842.0 3,239.5 5,086.5 5,811.2 7,595.0
Revenue 18,519.3 20,008.5 21,445.4 22,882.4 24,620.2 26,927.9 30,380.8
Net Profit Margin (A) 10.73% 11.73% 13.25% 14.16% 20.66% 21.58% 25.00%

Revenue 18,519.3 20,008.5 21,445.4 22,882.4 24,620.2 26,927.9 30,380.8

Average Total Asset 50,070.7 49,951.8 52,802.3 53,578.6 56,602.8 64,686.5 73,586.6
Asset Turnover Ratio (B) 0.4x 0.4x 0.4x 0.4x 0.4x 0.4x 0.4x

Return on Asset (A*B) 3.97% 4.70% 5.38% 6.05% 8.99% 8.98% 10.32%

Dupont Summary

 Net Profit Margin shows an increasing trend over the years. It starts at 10.73% in 2018 and reaches 25.00% in
2023. This indicates that the company is becoming more efficient at generating profits from its sales.
 Asset Turnover Ratio is constant at 0.4x throughout the seven years. This suggests that the company is not
using its assets any more efficiently to generate sales over time.
 Equity Multiplier shows a declining trend from 4.55x in 2018 to 2.80x in 2024. This indicates that the company
is relying less on debt financing over time.
 ROE has increased because of the increasing net profit margin

Disclaimer : This report is made as part of educational assignment and is meant for educational purpose only. The author of the report is not liable
for any losses due to actions taken basis this report. It is advisable to consult SEBI registered reasearch analyst before making any investments

Page 2
 HINDUSTAN AERONAUTICS LTD
(HAL | BSE Code: 541154)
INR 4364.05
52 Week (High - INR 4609 & Low - 3292)

Altman's Z Score Analysis

Hindustan Aeronautics Limited (HAL) is an Indian public sector aerospace and defence company, headquartered in
Bangalore. Established on 23 December 1940, HAL is one of the oldest and largest aerospace and defence
manufacturers in the world.[6] HAL began aircraft manufacturing as early as 1942 with licensed production of
Harlow PC-5, Curtiss P-36 Hawk and Vultee A-31 Vengeance for the Indian Air Force.[6] HAL currently has 11
dedicated Research and development (R&D) centres and 21 manufacturing divisions under 4 production units
spread across India.
Financial Summary
Working Capital / Total Assets Retained Earnings / Total Assets EBIT / Total Assets
2021

2022

2023

2024

2021 2022 2023 2024 2021 2022 2023 2024

Market Cap / Long term Liab Sales / Total Assets Altman's Z Score

2021 2022 2023 2024 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Recent Updates
Financial Performance
 Revenue from operations almost stood at 30,381 crores as compared to 26,928 crores in the previous year, marking an
increase of 13%.
 Inventory holding has been optimized from 360 days to 159 days.
 Debtors turnover has improved from 227 days to 55 days.
Future Growth and Expansion
 Expecting a robust CAPEX plan for the next 5 years, estimated to be between 14,000 to 15,000 crores annually.
 Establishing new facilities like a new helicopter factory in Tumakuru and a third line of LCA in Nashik.
 Investing in greenfield projects and capacity augmentation of various programs.
 Focusing on capacity building and capability building to meet customer commitments and future projects. Manufacturing
Growth and Execution
 Expecting manufacturing growth of around 15% to 18% annually.
 Repair and overhaul growth expected to be around 9% to 10%.
 Proactive actions taken to ensure timely delivery of orders, including placing kit orders in advance.
Export Orders and MRO Business
 Orderly intake guidance of 470,00 crores for FY25 does not include MRO orders.
 Entered into a working arrangement with Airbus for MRO business, expecting developments in the coming years.

Page 1
 Working Capital / Total Asset
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Working Capital 376.9 6,376.5 8,794.8 5,259.6 8,788.5 13,460.5 18,327.4
Total Asset 48,433.9 51,469.6 54,135.0 53,022.2 60,183.4 69,189.6 77,983.7
Working Capital / Total Asset 0.78% 12.39% 16.25% 9.92% 14.60% 19.45% 23.50%

Retained Earnings / Total Assets

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Retained Earnings 150.5 1,308.5 1,315.3 1,876.4 2,762.6 2,300.3 4,225.2
Total Assets 48,433.9 51,469.6 54,135.0 53,022.2 60,183.4 69,189.6 77,983.7
Retained Earnings / Total Assets 0.31% 2.54% 2.43% 3.54% 4.59% 3.32% 5.42%

EBIT / Total Assets

EBIT 2,513.3 3,544.3 3,882.5 4,184.2 4,310.0 4,885.6 8,332.5
Total Assets 48,433.9 51,469.6 54,135.0 53,022.2 60,183.4 69,189.6 77,983.7
EBIT / Total Assets 5.2% 6.9% 7.2% 7.9% 7.2% 7.1% 10.7%

Market Cap / Long term Liabilities

Market Cap 18,940.7 11,811.6 8,699.1 16,635.1 24,826.6 45,662.3 1,11,250.7
Long term Liabiities 904.5 4,156.7 5,927.0 52.7 48.6 51.0 0.4
Market Cap / Long term Liabilities 2094% 284.16% 146.77% 31559.68% 51041.53% 89533.89% 31785920.36%

Sales / Total Assets

Sales 18,519.3 20,008.5 21,445.4 22,882.4 24,620.2 26,927.9 30,380.8
Total Assets 48,433.9 51,469.6 54,135.0 53,022.2 60,183.4 69,189.6 77,983.7
Sales / Total Assets 38.24% 38.87% 39.61% 43.16% 40.91% 38.92% 38.96%

Altman's Z Score
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Final Score 5.0 1.1 0.8 82.1 125.8 209.6 74,299.5
Financial Stability Strong Distressed Distressed Strong Strong Strong Strong

Disclaimer : This report is made as part of educational assignment and is meant for educational purpose only. The author of the
report is not liable for any losses due to actions taken basis this report. It is advisable to consult SEBI registered reasearch analyst
before making any investments

Page 2