Shares of Hindustan Aeronautics Ltd (HAL) gained as much as 3.5 percent to Rs 4,605 in morning deals on Wednesday, August 20, after reports suggested that the state-run defence manufacturer is set to bag one of its largest ever orders.
According to government sources cited by CNBC TV-18, the Cabinet Committee on Security has cleared the acquisition of 97 Light Combat Aircraft (LCA) Mark1A fighter jets for about Rs 62,000 crore. A formal announcement would mark a major milestone for HAL, which has been working on the indigenous Tejas programme to replace India’s ageing MiG-21 fleet.
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The LCA Mk1A, an upgraded variant of the Tejas, has been designed for enhanced combat capabilities. This will be the second big order for the aircraft after HAL secured a contract in February 2021. Deliveries are expected to kick off this year, with six jets scheduled for FY26, following the resolution of earlier engine supply challenges.
UBS has maintained a ‘neutral’ stance on the stock with a target price of Rs 4,900, noting that execution of the new order will add to HAL’s already strong pipeline.
Meanwhile, HAL posted a mixed performance in its June quarter results. Net profit declined 3.7 percent year-on-year to Rs 1,383.8 crore, even as revenue from operations climbed 10.8 percent to Rs 4,819 crore. A healthier product mix and execution of its Rs 1.89 lakh crore order book lifted operating performance — EBITDA rose nearly 30 percent to Rs 1,284 crore, with margins expanding to 26.7 percent from 22.8 percent a year earlier, defying expectations of a contraction.
With a robust order pipeline, improving margins and a fresh round of aircraft orders in the offing, HAL remains firmly positioned at the centre of India’s defence manufacturing push.
After Q1, Motilal Oswal said that the aircraft deliveries will likely pick up pace as engine supplies from GE ramp up, which should further support revenue visibility.
At about 9:20 am, shares of the company were trading at Rs 4,560, higher by 2.5 percent from the last close on the NSE. Hindustan Aeronautics Limited shares are down 8 percent in the last three months.
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