Check Before You Invest : Hindustan Aeronautics Ltd

Q: Which industry/sub-sector does Hindustan Aeronautics Ltd belong to?

Hindustan Aeronautics Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Defence segment.

Q: Is Hindustan Aeronautics Ltd a good quality company?

Hindustan Aeronautics Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Hindustan Aeronautics Ltd undervalued or overvalued?

Hindustan Aeronautics Ltd appears Overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 32.04, Historic Median: 22.43. Price to Book, Current: 7.12, Historic Median: 7.68. Price to Sales, Current: 8.83, Historic Median: 8.22. EV to EBITDA, Current: 18.26, Historic Median: 19.00

Q: Is Hindustan Aeronautics Ltd a good buy now?

Hindustan Aeronautics Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd revenue growth is 2% for FY-2025, which is below its 5-year CAGR of 7.63%, indicating slower growth.

Q: Gross Profit margin of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Gross profit margin which is the profit after deduction of direct costs, is 39.3% for FY-2025, which is above its 5-year median of 30.8%, indicating increasing margins.

Q: Operating Profit Margin of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 31.23% for FY-2025, which is above its 5-year median of 25.39% indicating increasing margins.

Q: Net Profit Margin of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Net Profit Margin is 27% for FY-2025, is above its 5-year median of 21.64%, indicating increasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 39.3, Historic Median: 30.8. Operating Profit Margin (%), Current: 31.23, Historic Median: 25.39. Net Profit Margin (%), Current: 27, Historic Median: 21.64

Q: Return on Asset of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Return on Asset is 9.22%, which is in line with its 5-year historical median of 9.28%, indicating stable asset utilization efficiency.

Q: Return on capital employed (ROCE) of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Return on capital employed is 33.91% for FY-2025, which is above its 5-year historical median of 30.59%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Check Before You Invest : Hindustan Aeronautics Ltd

Snapshot

Q.1 Which industry/sub-sector does Hindustan Aeronautics Ltd belong to?

Hindustan Aeronautics Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Defence segment.

Q.2 Is Hindustan Aeronautics Ltd a good quality company?

Hindustan Aeronautics Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Hindustan Aeronautics Ltd undervalued or overvalued?

Hindustan Aeronautics Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	32.04	22.43
Price to Book	7.12	7.68
Price to Sales	8.83	8.22
EV to EBITDA	18.26	19.00

Q.4 Is Hindustan Aeronautics Ltd a good buy now?

Hindustan Aeronautics Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd revenue growth is 2% for FY-2025, which is below its 5-year CAGR of 7.63%, indicating slower growth.

Q.2 Gross Profit margin of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Gross profit margin which is the profit after deduction of direct costs, is 39.3% for FY-2025, which is above its 5-year median of 30.8%, indicating increasing margins.

Q.3 Operating Profit Margin of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 31.23% for FY-2025, which is above its 5-year median of 25.39% indicating increasing margins.

Q.4 Net Profit Margin of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Net Profit Margin is 27% for FY-2025, is above its 5-year median of 21.64%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	39.3	30.8
Operating Profit Margin (%)	31.23	25.39
Net Profit Margin (%)	27	21.64

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Return on Asset is 9.22%, which is in line with its 5-year historical median of 9.28%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Return on capital employed is 33.91% for FY-2025, which is above its 5-year historical median of 30.59%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Return on equity is 26.09% for FY-2025, which is in line with its 5-year historical median of 27.18%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Cash conversion cycle is 184 days, in line with its 5-year historical median of 184 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	0.34	0.43
ROE (%)	26.09	27.18
ROCE (%)	33.91	30.59
Cash Conversion Cycle	184 days	184 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.09, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Hindustan Aeronautics Ltd?

Hindustan Aeronautics Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Hindustan Aeronautics Ltd?

Q.1 Promoter shareholding and pledge status of Hindustan Aeronautics Ltd?

Promoters hold 71.64% of the Hindustan Aeronautics Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Hindustan Aeronautics Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Hindustan Aeronautics Ltd vs industry peers?

Hindustan Aeronautics Ltd revenue CAGR is 7.63%, compared to the industry median CAGR of 10.25%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	2	10.3
Gross Profit Growth (%)	4.8	20.9
Operating Profit Growth (%)	-1.3	17.9
Net Profit Growth (%)	9.8	23.9

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	0.34	0.49
ROE (%)	26.09	25.35
ROCE (%)	33.91	30.96
Cash Conversion Cycle (days)	184.23	178

Valuation & price assessment

Q.1 Stock return of Hindustan Aeronautics Ltd over the last decade?

Over the last 5 year(s), the stock has delivered a CAGR of 53.65% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	-	53.7%	41.5%	-12.8%

Q.2 Valuation ratios of Hindustan Aeronautics Ltd vs historical?

The current P/E ratio of 32.04 is higher than its historical median of 22.43, indicating that the stock is trading above its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	32.04	22.43	64.82
Price to Book	7.12	7.68	7.10
Price to Sales	8.83	8.22	8.19
EV to EBITDA	18.26	19.00	33.96

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Check Before You Invest : Hindustan Aeronautics Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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