HAL announces approval for 97 upgraded Tejas jets. Can the stock rally up to Rs 6,325?

Hindustan Aeronautics (HAL) on Thursday said the Cabinet had cleared a Rs 62,000-crore order for 97 Light Combat Aircraft (LCA) Mk-1A fighter jets, sparking debate over whether the stock could rally toward the Rs 6,325 target projected by brokerages after the state-run defence major’s first-quarter results last week.

HAL’s stock advanced as much as 1.3% to Rs 4,525.85 on BSE following the disclosure. The company told exchanges that, as communicated by the Ministry of Defence, the Cabinet Committee on Security (CCS) had cleared the procurement of the fighter jets and associated equipment for the Indian Air Force. The Mk-1A is an upgraded version of the Tejas fighter, designed to replace the ageing MiG-21 fleet.

The defence major’s shares are up 8.2% so far in 2025 but remain down about 5% over the past 12 months, including a 5% decline in the last month.

Brokerages see upside

Brokerages remain broadly positive on the stock post its Q1 FY26 results, though target prices vary.

Nuvama retained its ‘Buy’ rating, citing a “revenue CAGR of ~21% over FY25–28E” and maintained a price target of Rs 6,000.

Motilal Oswal kept its ‘Buy’ call with a target of Rs 5,800, noting that “engine supplies ramping up from GE for the Tejas Mk1A aircraft order” should accelerate deliveries. The brokerage highlighted a “beat on profitability” in the first quarter, with EBITDA margin expanding to 26.6%.

Choice Institutional Equities raised its stance to ‘Buy’ with a price target of Rs 5,570, saying “the company remains firmly on track to deliver a stronger H2 in FY26, with revenue acceleration led by the ramp-up of the Tejas program.”

InCred Equities set the most bullish target at Rs 6,325, pointing to “double-digit revenue growth with improved EBITDA margin” and forecasting deliveries of 12 Tejas Mk1A jets in FY26.

PL Capital upgraded the stock to ‘Buy’ with a target of Rs 5,500, citing HAL’s “robust prospect pipeline of ~Rs1.0 trillion over the next few years” and strategic expansion into space technology through ISRO’s small satellite launcher program.

Q1 earnings

HAL reported a 3.7% year-on-year decline in consolidated net profit to Rs 1,383.77 crore for the quarter ended June 30, 2025, compared with Rs 1,437.14 crore a year earlier.

Revenue from operations rose 10.8% year-on-year to Rs 4,819.01 crore during the quarter. On a sequential basis, profit plunged 65.2% from the March quarter.

Also read | HAL Q1 results: Cons PAT slips 4% YoY to Rs 1,383 crore, revenue surges 11%

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