Hindustan Aeronautics adds Rs 218 crore Shakti engine line

Hindustan Aeronautics Limited is adding a second Shakti engine production line at its Koraput unit for Rs 218 crore, with the Defence Minister due to lay the foundation stone on 6 October. The stock rose as much as 2.8 percent against 1.6 percent for the Nifty India Defence index. The facts: - Rs 218 crore for a second Shakti line at Sunabeda - Shakti powers the ALH Dhruv and LCH Prachand; a Rs 62,700 crore order for 156 Prachands is on the books - I found no capacity figure or completion date - Q1 FY27 (12 August, standalone): revenue Rs 5,515 crore, up 14.4%; PAT Rs 1,581 crore, up 14.8%; EBITDA margin 27.7% against a FY27 guide of 30 to 31% Rs 218 crore is about 0.07 percent of the market cap, so the plant changes no estimate. The swing item is Tejas Mk1A: management says 10 aircraft by March 2027, with 27 airframes built, 10 F404 engines in and 12 more due by December. HAL [][***** shares trade at Rs 4,755.44 at 2:29 PM IST on 6 October on StockGro (NSE close Rs 4,680.00 on 5 October). P/E 34.12; sector P/E near 48. My view: hold, not a fresh entry. Most of today's move is the sector, not the plant. At 34x HAL is below the sector, but the year leans on Tejas handovers and a margin that must climb from 27.7% to the 30 to 31% guide. Holders stay into Q2 results (date not yet out; last year 12 November). Fresh money waits for the first Tejas handovers and a Q2 margin above 27.7%. Support Rs 4,680 (5 October close and today's low); resistance Rs 5,149.90 (52-week high). My exit is a close below Rs 4,680, or Tejas handovers slipping past March 2027. Disclosure: Vijay Kumar Gupta, SEBI Registered Research Analyst, INH000020226, Vijay Gupta Advisory. SEBI registration and NISM certification do not guarantee performance or assure returns. Securities markets are subject to market risks. No holdings in the subject company.