Tejas fighter jet crash in Dubai: HAL shares could see short-term volatility next week, say analysts

A Tejas fighter jet manufactured by Hindustan Aeronautics (HAL) crashed during a Dubai Air Show on November 21. While details are limited as officials continue to investigate the accident, analysts forecast some consolidation for HAL shares when markets reopen on Monday.

HAL shares closed nearly 3 percent lower at Rs 4,593 apiece on Friday, extending losses for the third consecutive session. Te incident was reported in the post-market hours today.

Tejas fighter jet crash: All we know so far

The fighter jet crashed while performing manoeuvres in front of a large audience in the afternoon. Videos circulating online show the jet, which was a single-seat light combat aircraft (LCA), plunging down to the ground and flames erupting immediately at the site.

A plume of black smoke rose above Al Maktoum International Airport at Dubai World Central, drawing the attention of onlookers as sirens rang out in the aftermath of the crash. The IAF, in a statement, confirmed the death of pilot in the crash

"An IAF Tejas aircraft met with an accident during an aerial display at the Dubai Air Show today. The pilot sustained fatal injuries in the accident. Indian Air Force deeply regrets the loss of life and stands firmly with the bereaved family in this time of grief. A court of inquiry is being constituted to ascertain the cause of the accident," The Indian Air Force said.

The incident marks the second case involving a Tejas aircraft in less than two years. Earlier in March 2024, a Tejas fighter jet crashed in Rajasthan's Jaisalmer while returning from a tri-services military exercise in Pokhran desert in the first accident involving the indigenously-built single-engine jet since it began flying in 2001.

About the Tejas aircraft:

Tejas is single-engine, 4.5-generation multirole combat aircraft with a delta wing design. It is developed by the Aeronautical Development Agency (ADA) and manufactured by Hindustan Aeronautics Limited (HAL) for the Indian Air Force (IAF).

What to expect for HAL shares?

Historically, HAL shares have declined whenever one of its aircraft crashed earlier, like in March 2024 and February 2019, said Abhinav Tiwari, Research Analyst at Bonanza. The analyst expects the shares of the PSU company to open lower on Monday.

"The reaction may improve only if HAL confirms that there is no major technical issue. The stock may recover gradually if the crash does not affect future deliveries or export plans," he added.

Siddharth Maurya, Founder & Managing Director at Vibhavangal Anukulakara, said that the Tejas crash at the Dubai Airshow will bring immediate sentiment pressure on HAL, and a certain degree of short-term volatility in the stock cannot possibly be avoided.

'Such isolated incidents seldom impact the long-term valuations'

He however added that such isolated incidents seldom impact the long-term valuations unless they expose some structural flaw. "HAL still has an enviable order book, including large contracts for Tejas, and is central to India's defence ecosystem," he said.

"For investors, key things to track would include delivery discipline, technical clarity from HAL, and the ability of the company to sustain earnings momentum," he further said, adding that if such operational confidence is maintained, any correction could turn into an opportunity rather than a setback in the long term.

'Incident does introduce short-term reputational risk'

Harshal Dasani, Business Head at INVasset PMS, said that a sentiment shift around HAL after the crash is understandable. “When a frontline indigenous fighter suffers an accident on a global stage, it triggers immediate questions on reliability, export readiness, and operational safety. Even though the government clarified that earlier concerns around oil leakage were unfounded and unrelated, the incident still places HAL under heightened scrutiny at a time when expectations are exceptionally high,” he said.

This analyst also noted that HAL enters the phase with one of the strongest order books in the company’s history, including the recent mega order for 97 Tejas units and ongoing demand for helicopters and engines. However, he pointed out elevated valuations. "Trading at elevated valuation multiples, the market was assuming flawless execution and uninterrupted momentum in India's defence-manufacturing push. An incident like this doesn’t change the long-term trajectory, but it does introduce short-term reputational risk, and investors typically move to reassess risk-reward when valuations are rich," Dasani said.

He noted that the key now is the outcome of the investigation and the speed at which HAL and the defence establishment communicate technical clarity. The long-term India defence story remains intact, but near-term volatility around HAL will justified until greater transparency emerges, he concluded.

HAL share price history:

HAL shares have declined more than 4 percent in the past five days, and over 5 percent in the past one month. The stock declined over 8 percent in the past six months, but is up 10 percent in 2025 so far. This was driven by the sharp run-up in defence stocks after Indian armed forces targeted armed terrorist outfits in Pakistan and Pakistan occupied Kashmir (POK) under the codename ‘Operation Sindoor’.