Synopsis: The brokerages highlighted this defence inventory on its sturdy order visibility, wholesome stability sheet, and upcoming Tejas and helicopter supply pipeline as key long-term progress drivers.
The article outlines why brokerages stay bullish on Hindustan Aeronautics Restricted regardless of near-term execution considerations, supported by its report order backlog, sturdy money technology, enhancing defence manufacturing alternatives, and a wholesome pipeline of future defence contracts anticipated over the following few years.
With the market capitalization of Rs 2,93,338 crore, Hindustan Aeronautics Ltd’s shares closed at Rs 4,386 per share, down 4.81 p.c from its earlier shut. The share of the corporate has returned 790 perent over the past 5 years.
Brokerage View
Nomura on HAL
Nomura maintained its ‘Purchase’ score on the inventory with a goal value of Rs 5,954, implying an upside potential of round 35.7 p.c from at the moment’s shut, backed by sturdy working efficiency, sturdy money technology, and a wholesome long-term order backlog.
Robust This autumn Efficiency Hindustan Aeronautics Restricted delivered a powerful This autumn FY26 efficiency, with adjusted EBITDA surpassing Nomura’s estimates by 19 p.c and consensus estimates by 7 p.c. The brokerage famous that higher execution, steady margins, and wholesome operational momentum supported the earnings beat through the quarter.
Sturdy Order Ebook and Money Circulate HAL’s order backlog stood at Rs 2.54 trillion (254,000) as of March 2026, almost 8 instances trailing twelve-month gross sales, offering sturdy long-term income visibility. The corporate additionally maintained wholesome money technology, with FY26 working money movement at Rs 109.2 billion, equal to 1.1 instances EBITDA, reflecting sturdy enterprise fundamentals.
Environment friendly Working Capital and Valuation Consolation Nomura highlighted that HAL’s working capital effectivity improved, with web working capital days at detrimental 208 in FY26 in comparison with detrimental 192 in FY25, aided by greater buyer advances. Money and money equivalents elevated 21 p.c YoY to Rs 462 billion, whereas the inventory trades at 23 instances FY28 estimated EPS, under its historic common valuation.
GS on Hindustan Aeronautics
Goldman Sachs maintained its ‘Impartial’ score on the inventory and marginally lowered the goal value to Rs 5,225 from Rs 5,255, citing sturdy order visibility however slower execution tempo, margin strain from greater bills, and delays in Tejas Mk-1A deliveries.
Robust Order Ebook Helps Lengthy-Time period Progress Hindustan Aeronautics Restricted continues to profit from a sturdy order backlog, which Goldman Sachs believes gives wholesome long-term income visibility. The brokerage famous that the sturdy pipeline of defence orders and government-led indigenisation initiatives stay supportive for HAL’s long-term progress outlook regardless of near-term execution challenges.
Execution Tempo and Margin Strain Stay Considerations Goldman Sachs highlighted that execution momentum is but to enhance materially, which might restrict near-term earnings progress. The brokerage additionally identified that EBITDA margins got here underneath strain through the quarter attributable to greater bills, indicating that price inflation and execution delays might proceed to influence profitability within the close to time period.
Tejas Mk-1A Deliveries Key Monitorable: The brokerage believes deliveries of the Tejas Mk-1A plane stay a serious set off for the inventory going ahead. Well timed execution and sooner deliveries are anticipated to enhance income progress, operational effectivity, and investor confidence, making the programme one of many key monitorables for HAL within the coming quarters.
This autumn Replace
Robust Progress in Order Ebook as of This autumn Hindustan Aeronautics Restricted reported a pointy rise in its order guide to Rs 1,89,300 crore from Rs 94,127 crore as of April 1, 2024, even after executing turnover price Rs 30,105 crore through the yr.
The rise was primarily pushed by main manufacturing contracts, together with 240 AL-31FP engines for Sukhoi-30 plane price Rs 25,500 crore, 156 LCH Prachand helicopters price Rs 62,777 crore, and 12 Sukhoi-30MKI plane price Rs 13,454 crore, together with a number of improve programmes.
Wholesome Pipeline Helps Future Visibility The corporate additionally secured restore and overhaul orders price Rs 19,271 crore, design and growth orders price Rs 3,180 crore, and export orders price Rs 493 crore through the interval.
HAL acknowledged that its future order pipeline stays sturdy, with anticipated contracts for 97 LCA Mark 1A plane, 143 ALH helicopters, Dornier plane provide, and improve programmes presently underneath numerous phases of approval. The entire pipeline alternative is estimated at almost Rs 1 lakh crore and is anticipated to materialise over the following one to 2 years.
In regards to the Firm
Hindustan Aeronautics Restricted is India’s main aerospace and defence firm engaged within the design, growth, manufacturing, restore, and upkeep of plane, helicopters, engines, and defence methods. The corporate performs a key position in India’s defence indigenisation programme and provides merchandise primarily to the Indian armed forces.
Monetary Highlights: The income from operations grew by 2 p.c to Rs 13,942 crore in This autumn FY26 (Mar 2026) from Rs 13,700 crore in This autumn FY25 (Mar 2025), and EBIDT decreased by 4 p.c to Rs 5,059 crore in This autumn FY26 from Rs 5,295 crore in This autumn FY25. Accompanied by a web revenue progress of 6 p.c to Rs 4,196 crore in This autumn FY26 from Rs 3,977 crore in This autumn FY25, leading to an EPS progress of 6 p.c to Rs 62.74 per share in This autumn FY26.
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