Hindustan Aeronautics gains 10% in 2 days on deal with GE Aviation

The company said it has signed a $716 million deal with GE Aviation for procurement of 99 engines for manufacturing 83 LCA Tejas for Indian Air Force (IAF)

Shares of Hindustan Aeronautics (HAL) were up 5 per cent at Rs 1,173 on the BSE in intra-day trade on Friday, gaining 10 per cent in the past two trading days after the company said it has signed $716 million deal with GE Aviation for procurement of 99 engines for manufacturing 83 LCA Tejas for Indian Air Force (IAF).

The state-owned defence company informed the stock exchange on news item appearing in media/ publication with respect to "HAL signs $716 million deal with GE Aviation for 99 Engines for LCA Tejas".

“In the present case, since HAL has signed $716 million deal with GE Aviation for procurement of 99 Engines for manufacturing 83 LCA Tejas for IAF, in the ordinary course of business, the same need not be intimated to the Stock Exchange under the said Regulations,” HAL said in an exchange filing.

The company further stated that it may be noted, HAL had already intimated the signing of the contract for 83 LCA Tejas, to the stock exchange on February 3, 2021.

HAL had informed exchanges that the government formally sealed the deal of around Rs 48,000 crore (inclusive of taxes and duties of around Rs 7,000 crore; infrastructure and design & development cost of around Rs 2,300 crore ) for procuring 73 indigenous LCA Tejas Mk-1A fighter aircraft and 10 LCA Tejas Mk-1 trainer aircraft from the company.

HAL is a public sector enterprise, engaged in the design, development, manufacture, repair, overhaul, upgrade and servicing of a wide range of products including aircraft helicopters, aero-engines, avionics accessories and aerospace structures.

The stock had hit a 52-week high of Rs 1,424 on August 14, 2020. In the past three months, the stock has outperformed the market by gaining 15 per cent, as compared to a 12 per cent rise in the S&P BSE Sensex. However, in the past one year, it has underperformed the market by falling 4 per cent, against a 45 per cent rally in the benchmark index.