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Hindustan Aeronautics Limited (HAL), one of India's leading defence PSUs, released its Q4 results today and the numbers paint a gloomy picture. Net profit fell to Rs 3,977 crore as against Rs 4,308.71 crore in Q4 FY24, while revenue fell by 7.24 per cent to Rs 13,699.85 crore.
Yet, the muted financials don't reflect in the company's share price, as it is up nearly 3 per cent at Rs 4,743 per share.
Q4 FY25 performance review
Here's how HAL did in Q4 FY25:
| Metric | Q4 FY25 | YoY change |
|---|---|---|
| Revenue | Rs 13,700 cr | -7% |
| Net profit | Rs 3,977 cr | -8% |
| EBITDA | Rs 5,292 cr | -10% |
| EBITDA margin | 38.60% | - 130 bps% |
On the face of it, this is a tepid quarter. But the full-year numbers look better:
- FY25 net profit: Rs 8,364 crore
- FY25 revenue: Rs 30,981 crore
Why HAL's stock moved up despite a poor Q4
There are two key reasons behind the same:
- Strong full-year growth: Even with a weak Q4, HAL's FY25 earnings were solid. Double-digit profit growth and revenue stability are not to be ignored.
- Strategic moat: HAL is not just another PSU. It's central to India's defence ambitions, including projects like the Tejas fighter jets and helicopters for the Army and Air Force. That gives it long-term visibility and consistent government orders.
In addition to that, the current market optimism in defence stocks and HAL's stock gains have started to make sense.
What does Value Research say?
Overall, HAL is rated four out of five stars by Value Research.
Here's how it does on the other parameters:
- Quality: 10/10
- Growth: 6/10
- Valuation: 2/10
- Momentum: 7/10
That tells you all you need to know. High on quality and momentum, reasonably strong on growth, but not cheap.
The bottom line
The Q4 numbers may be underwhelming, but investors aren't worried. HAL's strong annual performance, dominant position in India's defence ecosystem, and the broader optimism around defence manufacturing keep the stock in favour.
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Disclaimer: This story was created with the assistance of artificial intelligence and is intended for informational purposes only. Please take it with a pinch of salt and do your own research or consult a financial advisor before making investment decisions.
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