The Board of aerospace and defence major, Hindustan Aeronautics Ltd (HAL), on Tuesday approved a proposal to split the company's equity shares in the proportion of 1:2. This means, every one share of an existing investor will be split into two shares.

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"The sub-division/ stock split of existing 1 (one) equity share of face value of Rs 10/- each fully paid up into 2 (two) equity shares of Rs 51-each fully paid up," Hindustan Aeronautics said in a regulatory filing.

A stock split is usually done to increase the liquidity of the stock in the market. On the record date, investors who are holding the stock until the record date will receive the new shares in Demat accounts and the stock price will be adjusted according to the split ratio.

The record date for the purpose of sub-division of equity shares has been fixed on Friday, September 29, 2023, the company said.

Apart from the stock split, HAL's board has also recommended a final dividend of Rs 15 for the financial year 2022-23.

Analysts largely positive on HAL stock

Analysts remain largely positive on HAL, given its order backlog of Rs 82,000 crore and robust order pipeline of over Rs 1,50,000 crore in the long term. HAL expects double-digit revenue growth from FY2025E when deliveries of LCA Tejas MK1A kick in.

The Bengaluru-based defence major aims 14 percent revenue growth from FY2026E, according to domestic brokerage house Sharekhan.

Analysts at Antique Stock Broking remain confident of HAL’s business prospects, given India is in the midst of modernising its armed forces due to obsolescence and the geopolitical situation. This should lead to strong ordering for fighter aircrafts and helicopters, along with developing their respective engines and accessories, the brokerage said.

Shares of HAL were trading 0.70 percent lower at Rs 3,675.10 apiece during Tuesday's noon deals. So far this year, the stock is up about 45 percent while it jumped 103 percent in the last one year.

In terms of technicals, the relative strength index (RSI) of the counter stands at 62.9. RSI below 30 is considered oversold and above 70 overbought. The stock has a one-year beta of 1, indicating average volatility during the period. HAL shares are is trading higher than the 20 day, 50 day, 100 day and 200 day moving averages.

First Published:Jun 27, 2023 1:59 PM IST