On contracts with the Defense Ministry, HAL shares rise 3%

Early trading hours on Tuesday saw a roughly 3% increase in Hindustan Aeronautics. This increase comes after the defense ministry revealed two large contracts for Rs 8,073 crore that are intended to be awarded to the Indian Army and the Coast Guard. The contracts are for the purchase of 34 cutting-edge light helicopters and related equipment.

HAL’s shares saw a significant gain from the previous day’s closing value of Rs 3,039.90, rising more than 3% to Rs 3,136.70 on the BSE. HAL’s market value too increased admirably, hitting Rs 2.08 lakh billion. A total of Rs 19.14 crore was turned over in trading, including the exchange of 0.62 lakh shares.

The defense firm hit a 52-week high of Rs 3,428.75 on March 11, 2024, which contrasted with its low of Rs 1,237.50 on March 23, 2023, which is why HAL’s shares have surged. The relative strength index (RSI), which measures a stock’s performance, was 45.8, suggesting that it is neither overbought nor oversold.

The Ministry of Defence underlined the importance of these contracts, noting that the procurement of sophisticated light helicopters under the Indian-IDDM (Indigenously Designed, Developed, and Manufactured) category is a significant step towards indigenous defense manufacturing.

On March 13, 2024, these contracts for a combined Rs 8,073.17 crore were signed with HAL after being approved by the Cabinet Committee on Security (CCS).

According to a release from HAL, the contracts are for the purchase of 34 Advanced Light Helicopters (ALH) Dhruv Mk III, outfitted with Operational Role Equipment, to meet the requirements of the Indian Coast Guard (9 ALHs) and Indian Army (25 ALHs).

The ministry also emphasized the large number of jobs created by this project—an estimated 190 lakh man-hours—and the participation of more than 200 Micro, Small, and Medium-Sized Enterprises (MSMEs) and 70 local suppliers in the process of indigenization.