Hindustan Aeronautics shares surge in anticipation of a potential Cabinet nod for combat helicopter order

Hindustan Aeronautics rise 3% on potential nod from Cabinet for combat helicopters

Shares of Hindustan Aeronautics (HAL) were higher by about 3 percent on March 28, following a news report by ANI that the Union Cabinet is likely to approve the acquisition of 145 Light Combat Helicopters (LCH) for the Indian Army and Air Force.

HAL had previously received a tender for 156 LCH units in June last year, with the project now ready for final clearance after extensive negotiations. Out of the 156 choppers, 90 would be designated for the Indian Army and 66 for the Indian Air Force, with the latter leading the joint procurement process, the report said.

The Defence Ministry has been advocating for the procurement of these helicopters, emphasizing their importance in operations along the China and Pakistan borders, and in line with indigenous defense manufacturing plans, said ANI.

The Ministry has been pushing for increased self-reliance in defense manufacturing under the 'Make in India' and 'Atmanirbhar Bharat' initiatives, and the deal is expected to bolster defense capabilities in high-altitude border areas.

The government’s push for indigenous defense equipment, including the recent order for 83 Light Combat Aircraft (LCA) and negotiations for 97 more, underscores its commitment to local manufacturing. The Cabinet Committee on Security recently approved the Rs 7,000 crore deal for 307 ATAGS howitzers, involving Bharat Forge and a Tata Group company, ANI had reported.

This LCH order is seen as potentially a major boost to HAL's defense capabilities. Additionally, ICICI Securities recently upgraded HAL’s stock to “buy” from “add,” setting a price target of Rs 5,000, implying a potential upside of 21 percent.

Out of the 16 analysts covering Hindustan Aeronautics Limited (HAL), 15 have a "buy" recommendation, while only one has a "sell" rating. HAL has emerged as the best-performing stock on the Nifty PSE index in March, recording gains of 37% so far — marking its strongest monthly return in five years.