Shares of Hindustan Aeronautics Limited (HAL) were upbeat amid reports that the company could be upgraded to “Maharatna” status. 

What Happened: Cabinet Secretary TV Somanathan will chair a meeting on Monday to discuss the possible elevation of HAL from “Navratna” to “Maharatna” status. 

The proposal for the upgrade comes following HAL’s impressive financial performance, which includes a 77% year-on-year increase in consolidated net profit for Q1FY25.

The “Maharatna” status would increase HAL’s operational autonomy, particularly in capital expenditures for new purchases or replacements, removing any monetary ceiling.

Currently, India has 13 “Maharatna” public sector firms, including BHEL, BPCL, Coal India, GAIL, HPCL, Indian Oil, NTPC, ONGC, Power Grid, SAIL, Oil India, REC and PFC. 

To qualify for the “Maharatna” status, a company must have an average turnover of more than ₹25,000 crore, an average annual net profit exceeding ₹5,000 crore, and a net worth greater than ₹15,000 crore over the last three years.

See Also: Why Are ONGC Shares Up 3% Today?

The Ministry of Defence recently signed a contract with HAL for 240 AL-31FP Aero Engines for Su-30MKI aircraft at a cost of over ₹26,000 crore. HAL plans to leverage the country’s defence manufacturing ecosystem, involving micro, medium and small enterprises and public and private industries.

The status will place HAL among the top-tier public sector undertakings (PSUs) in India, which could enhance its reputation and credibility in the market. This could potentially attract more investors and partners, thereby providing a boost to the company’s growth and expansion plans. 

The move also aligns with the Indian government’s push for self-reliance in the defence sector, as it could enable HAL to undertake larger projects and contribute more significantly to the country’s defence capabilities.

Price Action: HAL’s shares were up 2.23% to 4,430. on Monday afternoon.

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