Hindustan Aeronautics stock in focus as brokerages weigh in; should you buy, sell, or hold?

The company has lined up strong capex line up for the next five years.

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26 Aug, 2025 12:21

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Hindustan Aeronautics Ltd (HAL) shares are expected to be in the spotlight as several brokerages have released their reports following the company’s earnings call for the quarter ended March 31, 2025. The positive brokerage reports come amid growing investor interest in the defence sector and HAL’s strong order book and operational performance.

For the quarter, HAL reported a nearly 8 percent drop in its fourth-quarter profit, weighed by a delay in the supply of its Tejas light combat aircraft. The fighter jet maker's consolidated profit fell to Rs 3,977 crore in the quarter ended March 31, from Rs 4,309 crore a year earlier.

State-owned HAL's quarterly revenue fell 7.2 percent to Rs 13,700 crore for the March quarter. HAL's revenue was expected to take a hit due to delays in the supply of Tejas Mk 1A light combat aircraft, analysts had said, even as ordering activity in the defence sector remained steady throughout the quarter.

HAL added that it has a healthy orderbook of around Rs 1.89 lakh crore as of April 2025, compared to around Rs 94,000 crore a year ago. The pipeline of order inflow includes 97 LCA Mk1A, 143 ALH for the Indian Air Force and 10 Dorniers for Indian Navy, said HAL, totalling up to Rs 1.25 lakh crore as of FY25.

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Should you buy, sell, or hold HAL shares?

International brokerage Jefferies maintained its 'buy' rating, while increasing its price target to Rs 6,475 from Rs 4,715. The firm's management reshared margin guidance at 30-31 percent amid the focus on cost optimisation.

The brokerage noted that the high margin service income and aircraft deliveries should drive double digit revenue growth for three to five years. Jefferies added that HAL's revenue growth guidance of 8-10 percent for FY2026 looks conservative.

Motilal Oswal said, "HAL reported a better-than-expected FY25 performance, driven by improved
margins on the back of lower provisions. The company ended the year with a robust order book of Rs 1.8 lakh crore, clocking inflows of Rs 1 lakh crore."

However, the stock has rallied sharply as a result of geopolitical tensions with Pakistan. "We are still constructive on the overall defense space, but the recent rally has been too sharp. While we reiterate our 'buy' rating, we would wait for better entry points as we acknowledge that risk-reward is not favorable at this point."

Domestic brokerage Nuvama Institutional Equities said, "Macro tailwinds, both domestically  and internationally, have put HAL in a sweet spot to benefit from these long-term opportunities. With
10-plus R&D centres, it is investing heavily in research to build on its indigenous portfolio." The brokerage reiterated its 'buy' rating, with a higher target price of Rs 6,000 per share, raising the FY26 EPS estimates.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.