Hindustan Aeronautics (HAL) shares have seen a strong surge in 2025 so far, rising nearly 20 percent while accompanying its defence peers. JPMorgan analysts remain bullish on the stock, and feel that the stock can rally further.
The global brokerage firm maintained an 'Overweight' rating on HAL shares, with a target price of Rs 6,105 apiece. This implies an upside potential of nearly 22 percent from the stock's previous closing price of Rs 5,012.60 per share.
HAL's steady progress continues, backed by a strong order book and a significant pipeline, CNBC-TV18 quoted the brokerage as saying in its note. "Progress on the AMCA tender will be key to watch," it added, while noting that the stock holds long-term potential as India upgrades its aging fighter aircraft fleet.
HAL shares currently have a P/E ratio of over 40. It currently has a market capitalization of Rs 3.34 lakh crore. The stock gained over 963 percent in the past five years, but fell nearly 11 percent in the past one year.
The rise in the stock came on the back of an overall rally in defence stocks, amid heightened global geopolitical tensions. The defence stocks have been in focus on hopes of higher order inflows, after the Indian military conducted targeted strikes against terrorist outfits in Pakistan under the codename 'Operation Sindoor' in May. As the geopolitical tensions between India and Pakistan eased, the escalations in Russia-Ukraine war continued to support the rally in defence stocks. Later, the tensions between the Israel and Iran further boosted the stocks.
Recently, Defence Secretary RK Singh said that the Defence Ministry will seek to increase the share of its expenditure in GDP from present 1.9 percent to 2.5 percent over the next five years. While speaking to CNBC-TV18, he added that the ministry is aiming to sign defence contracts worth Rs 2 lakh crore during FY26, matching the record levels achieved last year.
RK Singh added that 75 percent of India’s capital defence outlay will now be spent domestically, covering high-priority areas such as aerospace, shipbuilding, land systems, missiles, and munitions.
HAL shares however bucked the positive sentiment to trade in the red on July 8. The shares were trading marginally down by 0.4 percent at Rs 4,993 apiece in the morning.
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