New Delhi: Amid heightened volatility in the Indian stock market due to rising crude oil prices and tensions in West Asia, defence stocks are attracting investor attention. Among them, Hindustan Aeronautics Limited (HAL) has emerged as a key stock in focus following its strong June-quarter performance.
Several brokerages remain bullish on HAL after the company’s first-quarter results and have retained or upgraded their buy ratings, citing its strong order pipeline, long-term business outlook and execution capabilities. Some brokerages have assigned targets that indicate up to around 20% potential upside from the levels cited in the report.
HAL Shares Trade Near 52-Week High
The shares of state-owned defence company Hindustan Aeronautics Limited (HAL) were trading around ₹5,054.40, close to their 52-week high, according to the figures cited in the report.
HAL has also outperformed the broader market over different periods. According to NSE data cited in the report, the stock gained more than 10% in one month, compared with a gain of less than 3.5% for the Nifty during the same period.
Over the past three years, HAL shares have delivered a return of more than 160%, highlighting the strong long-term performance of the defence major.
Strong Q1 FY27 Performance
HAL reported a strong performance in the first quarter of FY27.
The company’s revenue increased 14.4% year-on-year to ₹5,515.17 crore, compared with ₹4,819.01 crore in the corresponding quarter of the previous year.
Its consolidated profit also rose by 14.9%, increasing from ₹1,383.77 crore to ₹1,589.68 crore.
One of the notable positives was the reduction in material costs. Material expenses declined by 12.1% to ₹2,777.21 crore, compared with ₹3,160.43 crore in the year-ago period.
EBITDA and Margins Improve
HAL’s operating performance also remained strong.
The company’s EBITDA increased 19% to ₹1,538 crore during the quarter.
The EBITDA margin improved to 27.9%, compared with 26.8% in the same quarter last year. This represents an improvement of approximately 106 basis points.
The improvement in margins, along with revenue and profit growth, has strengthened the investment case for the company in the eyes of several brokerages.
Antique Stock Broking Remains Bullish
Antique Stock Broking has maintained a Buy rating on HAL.
The brokerage has retained its target price of ₹6,026 per share.
According to the brokerage, HAL has a strong product portfolio and a sizeable pipeline of major defence programmes.
Key programmes highlighted include:
- Tejas Mk-II
- Su-30 upgrades
- IMRH (Indian Multi-Role Helicopter)
- LUH (Light Utility Helicopter)
The brokerage believes these programmes could support HAL’s long-term growth and strengthen its position in India’s expanding defence ecosystem.
Motilal Oswal Raises Target Price
Motilal Oswal Financial Services has also retained its Buy rating on HAL and increased its target price to ₹5,800 per share.
According to the brokerage’s assessment, HAL has received seven GE F404 engines, which are critical for the production of Tejas Mk1A aircraft.
The company expects deliveries of Tejas Mk1A aircraft to begin soon, with the first jet targeted for delivery by August-September 2026, according to the report.
Motilal Oswal also highlighted HAL’s planned capital expenditure programme. The company is reportedly planning around ₹140 billion (₹14,000 crore) of capex over the next five years.
Major Defence Programmes in Focus
HAL’s future growth prospects are supported by several major defence programmes.
Among the important projects are:
- Tejas Mk1A
- Tejas Mk-II
- HTT-40
- LCH Prachand
- Su-30MKI
- AL-31FP engines
- Indian Multi-Role Helicopter (IMRH)
- Light Utility Helicopter (LUH)
These programmes could provide the company with a significant long-term order pipeline as India continues to increase its focus on domestic defence manufacturing and self-reliance.
PL Capital Also Maintains Buy Rating
PL Capital has also maintained its Buy rating on HAL.
The brokerage has raised its target price to ₹5,795 per share, compared with its earlier target of ₹5,423.
The upward revision reflects the brokerage’s positive view of HAL’s business prospects, execution capabilities and long-term defence programme pipeline.
Brokerage Targets at a Glance
| Brokerage | Rating | Target Price |
|---|---|---|
| Antique Stock Broking | Buy | ₹6,026 |
| Motilal Oswal Financial Services | Buy | ₹5,800 |
| PL Capital | Buy | ₹5,795 |
With the stock price cited at around ₹5,054.40, these targets imply potential upside of approximately 14% to 19%, depending on the brokerage.
Why HAL Remains in Focus
HAL is benefiting from India’s increasing emphasis on indigenous defence production, rising military modernisation requirements and a growing pipeline of domestic defence programmes.
The company’s strong position in aircraft manufacturing, helicopters, upgrades and aircraft engines gives it exposure to several strategic defence projects.
Its improving revenue, profit and EBITDA margins, combined with a large project pipeline and planned capital expenditure, are among the key factors supporting the bullish brokerage view.
Important Investor Consideration
Although brokerages have given Buy ratings and higher target prices, investors should remember that a brokerage target is not a guaranteed return. Defence stocks can experience significant volatility because their performance depends on factors such as government orders, project execution, delivery schedules, defence policies, raw-material costs and market conditions.
HAL is also trading close to its 52-week high, which means investors should consider valuation and market risk before making any investment decision.
Bottom Line
HAL remains one of the key PSU defence stocks in focus, supported by strong Q1 FY27 results, an expanding defence programme pipeline and positive brokerage views.
With target prices ranging from ₹5,795 to ₹6,026, brokerages see further upside from the reported market price of ₹5,054.40. The company’s progress on Tejas Mk1A deliveries, major defence programmes and planned ₹14,000 crore capex will be important factors to watch going forward.
Disclaimer: This article is for informational and educational purposes only and should not be considered investment advice. Investors should conduct their own research or consult a qualified financial adviser before making investment decisions.
