Hindustan Aeronautics Limited's (HAL) share price rose by 3 percent on Friday, June 9, creating a new record and gaining by over 7%. This happened when the board members decided to consider the proposal to divide its equity shares (stock split) in a meeting, scheduled to be held on June 27.

Stock split generally happens when the company divides its shares in accordance with a predetermined ratio, splitting the face value, resulting in an increase in the number of shares.

Experts say that HAL stock has been trading positively high for six straight sessions and in fact, started on a bullish note in this month of June. The stock has grown by 22.90% since June 2.

The company’s market capitalisation rose to Rs 1.2 lakh crore. The final price of the HAL stock was noted as Rs 3,527. However, the company posted an 8.8% fall in its Q4FY23. The revenue of the company rose 8% from Rs 11,558 crore to Rs 12,494 crore in March last year.

“HAL is optimistic on securing a contract worth Rs120bn for production of 12 additional Sukhoi Su-30MKI multirole fighters for the Indian Air Force by next year (FY25). Besides, management expects contract negotiation for 240 units of AL31FP engines at Rs260 billion to be concluded soon,” said ICICI Securities, in its research note.

Furthermore, HAL and General Electric are also set to sign an agreement, which will focus on the production and testing of a new F414-INS6 engine for the TEJAS MK-2 fighter jet in India.

ICICI Securities further added, “It is anticipated that ToT and a percentage of local components will exceed 60%, thus, boosting domestic ecosystem. While baseline F414-INS6 engine (98KN) is also selected to power Twin-Engine Deck-Based Fighter (TEDBF) and AMCA MK-1, upgraded versions- F414-EPE and ceramic matrix composite enhanced core have the potential to cross 116KN and 130KN of thrust, respectively."