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Informist, Tuesday, Apr. 1, 2025

By Alina Geogy

MUMBAI – A deal from the defence ministry worth a whopping INR 627 billion prodded traders to add long positions to the derivatives contracts of Hindustan Aeronautics on Tuesday. The Ministry of Defence approved the procurement of 156 Prachand helicopters and other associated equipment from Hindustan Aeronautics.

Sentiment towards the stock was also likely boosted after latest provisional data highlighted healthy growth in its order book. Late Monday, HAL said its order book stood at INR 1.84 trillion compared with the INR-941.29-billion order book position during the end of 2023-24 (Apr-Mar). The company clocked a provisional revenue of INR 304 billion for FY25, higher than INR 303.81 billion in FY24. Additionally, Goldman Sachs (Singapore) had on Friday bought a 0.1% stake in the company for INR 1.6 billion from Kadensa Master Fund through a block deal on the National Stock Exchange.

Tuesday, shares of HAL rose as much as 6.4% to a three-month high of INR 4,444.95, though it came off highs and settled 1.1% higher at INR 4,223.70. The stock's trade volume in the cash market surged to an eight-month high of 6.6 million. It was one of the most actively traded underlying stocks. The stock has extended its gains to the fourth consecutive session, rising over 5% during this period. It has gained 37% in the past 30 days, but is still down 5% in 180 days.

Traders added long positions to the futures and options chain of HAL. The April futures contract of the stock closed at INR 4,243.95, at a premium of INR 20.25 to the closing price. Open interest in this contract rose nearly 13% to over 8 million.

The INR 4,400 and INR 4,800 strikes had the highest change in open interest among call options of HAL expiring Apr. 24. Premiums on these contracts rose 20-23%. These levels are 4-14% higher than the stock's closing level. Among put options, the INR 4,400 and INR 4,300 strikes had the maximum change in open interest. Premiums on these contracts fell 8-10%.

HAL's FY26 orderbook guidance of INR 2.5 trillion-INR 2.6 trillion will be led by two large orders of Tejas Mk 1A aircraft and Prachand helicopters which are set to materialise in the next 3-6 months, Elara Capital said in a report last week. Additionally, orders worth INR 350 billion are likely to accrue for the Sukhoi-30MKI upgrade, the Indian multi-role helicopter design and development, and repairs and overhaul orders, taking the total expected inflows to around INR 1.7 trillion in FY26, it said. Elara Capital expects an earnings compound annual growth rate of 14% in FY24-FY27.

In the meantime, traders placed bearish bets in the Nifty 50 derivatives amid concern about tariffs ahead of US President Donald Trump's announcement. Market participants were likely bracing for Trump's 'reciprocal' tariffs which go into effect Wednesday. These tariffs target other countries' duties and other trade barriers on US goods.

The recently announced 25% tariffs on automobiles, which had sparked a brief sell-off in auto stocks across the globe last week, is set to go into effect Thursday. Further, Trump's one-month suspension of 25% tariffs on many Canadian and Mexican goods will end early April. The April futures contract of the Nifty 50 closed at a premium of 142.85 points to the spot index. Open interest in this contract rose 8.6% to 13.65 million, according to provisional data.

--Nifty 50 Jan closed at 23308.55, down 329.10 points

--Nifty 50 Feb closed at 23421.00, down 344.45 points; 255.30-point premium to spot index

--Nifty 50 Mar closed at 23550.00, down 324.90 points; 384.30-point premium to spot index

HDFC Bank, Hindustan Aeronautics, ICICI Bank, Infosys, Tata Consultancy Services, Reliance Industries, Bajaj Finance, Bharat Electronics, Vodafone Idea, Trent, BSE, Mahindra & Mahindra, Bharti Airtel, and Zomato were the most actively traded underlying stocks .  End

Edited by Akul Nishant Akhoury

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