When Finance Minister Nirmala Sitharaman approved Hindustan Aeronautics’ (HAL) elevation to Maharatna Central Public Sector Enterprise (CPSE) status on Saturday, the company’s shares surged 2% to the day’s high of Rs 4,545.90 on the BSE.
The Inter-Ministerial Committee (IMC), headed by the Finance Secretary, and the Apex Committee, headed by the Cabinet Secretary, had both previously recommended the plan. HAL, a CPSE under the Department of Defence Production (DoDP), announced FY 2023–24 earnings of Rs 7,595 crore after reporting an annual turnover of Rs 28,162 crore.
A ‘buy’ rating of Rs 5,590 per share was also assigned to HAL by Elara Securities. They justified the re-rating by pointing to the growing percentage of indigenization and the unexplored export potential in the aircraft and helicopter sectors.
HAL shares ended the previous session on the National Stock Exchange (NSE) at a lower price of Rs 4,440. This year, the stock has increased by over 57 percent. The stock has increased by more than 126 percent in the last 12 months, more than doubling the money of investors. By contrast, the benchmark Nifty experienced a 27% rally over this time.
HAL’s Financial Performance
Under the Department of Defence Production (DoDP), HAL has demonstrated remarkable success in the past few years. The company recorded a turnover of Rs 28,162 crore and a net profit of Rs 7,595 crore during the 2023–24 fiscal year. HAL will have greater financial authority and decision-making independence as a result of its new Maharatna status, which will enable it to pursue bigger projects and make calculated investments without needing permission from the government.
What Are Eligibility For Maharatna Status?
Maharatna designation requires a corporation to fulfill certain requirements:
- Status Navratna: The business needs to already be in that status.
- In accordance with SEBI laws, it must be listed on an Indian stock exchange with the necessary public shareholding.
- Turnover For the previous three years, the corporation has required an average annual net profit of more than Rs 5,000 crore.
- Revenue or Net Worth a net value of Rs 15,000 crore over the course of the last three years, or an average yearly turnover of Rs 25,000 crore.
- The business ought to be well-established in foreign markets or have substantial activities.
