Hindustan Aeronautics Limited (HAL) witnessed a surge in its stock price, reaching a 52-week high of Rs 3323.00 on the Bombay Stock Exchange (BSE) on Thursday (March 7, 2024). This uptick came after the company announced an amendment to its Light Combat Aircraft (LCA) Initial Operational Clearance (IOC) contract.
HAL reported that it had revised the value of the LCA IOC contract from Rs. 2700.87 Crore to Rs. 5077.95 Crore. This significant increase in the contract value contributed to the positive sentiment surrounding the company’s stock.
Furthermore, CARE reaffirmed the rating of HAL’s long- and short-term bank facilities, adding to the optimism among investors.
As of 11:35 am, HAL shares were trading 2.58% higher at ₹3,311.35, reflecting the market’s positive response to the contract amendment and the reaffirmation of its bank facilities rating.
In March 2006, Hindustan Aeronautics (HAL) secured a contract for 20 Light Combat Aircraft Initial Operational Clearance (LCA IOC), which has since been fulfilled and delivered to the Indian Air Force. However, in 2018, the company requested an amendment to this contract through a Change Order due to modifications in build standards for Integration, necessitating the acquisition of extra Line Replaceable Units (LRUs), raw materials, composite materials, bought-out items, consumables, tooling, etc. By finalizing the amendment now, it is anticipated that the company will include the additional value of this change order (Rs 2377 crore) in its revenue for the fourth quarter of FY24.
