- 17 Feb 2023
- ICICIdirect Research
BHARAT FORGE, HAL ENTER INTO MOU FOR DEFENCE, AEROSPACE AT AERO INDIA 2023
HAL - 5026 Change: 70.00 (1.41 %)News: In a regulatory exchange filing, Bharat Forge informed about entering into an MoU with Hindustan Aeronautics for development and production of aerospace grade steel alloys. Bharat Forge also entered into an MoU with Paramount group for the development and production of composite rotor blades, mission systems and stores management systems for medium lift helicopters.
Views: These MoUs were executed during the ongoing Aero show wherein Bharat Forge continues to strengthen its presence in non-auto business amid strong metallurgical capabilities. These are early stage MoUs with minimal financial implications in the near term. However, over the long term it bodes well for the company wherein its intent is to grow revenues at 12-15% CAGR over FY22-30, clock 20%+ margins and 25% RoCE by FY30E with present order book of ~Rs 2,000 crore in defence domain (primarily meant for exports). This is also positive for HAL given its leadership position in the Indian defence airspace and is part of overall government aim to improve indigenisation in defence procurement.
Impact: Positive