HAL Share Price Surges Over 7% After ₹62,700-Crore Defence Order – Should You Invest?
Hindustan Aeronautics Ltd (HAL) shares soared over 7% in early trade on Tuesday after the state-owned defence giant secured a ₹62,700-crore order from the Ministry of Defence. The stock surged 7.58% to hit an intraday high of ₹4,492.80 on the BSE, riding high on investor optimism.
Let’s break down this major development and analyze if Hindustan Aeronautics Ltd shares are a good investment right now.
Massive Defence Order for Hindustan Aeronautics Ltd: Game Changer for Growth?
On March 28, Hindustan Aeronautics Ltd announced that it had signed two significant contracts with the Ministry of Defence for the supply of 156 Light Combat Helicopters (LCH) “Prachand” to the Indian Army and Air Force.
✅ Breakdown of the order:
- 90 LCHs for the Indian Army
- 66 LCHs for the Indian Air Force
- Total deal worth ₹62,700 crore (excluding taxes)
The supply of these combat helicopters is scheduled to begin in the third year and will be delivered over a five-year period.
Strong Financial Performance Despite Challenges
In a regulatory filing, HAL reported a provisional revenue of ₹30,400 crore for FY25, slightly higher than ₹30,381 crore in the previous fiscal year.
Despite hurdles such as supply chain disruptions in LCA engines and an ALH accident in January 2025, HAL accelerated the delivery of other products and services, maintaining its top-line growth.
💼 Key Financial Highlights:
- Order book: ₹1,84,000 crore (vs. ₹94,129 crore at the start of FY25)
- New contracts received in FY25: ₹1,02,000 crore (manufacturing) + ₹17,500 crore (ROH contracts)
Goldman Sachs Buys Hindustan Aeronautics Ltd Shares Worth ₹161 Crore
In a major institutional investment move, Goldman Sachs (Singapore) acquired 3,85,774 HAL shares at ₹4,176.25 per share, spending over ₹161 crore in an open market transaction on March 28.
On the other hand, Kadensa Capital (Hong Kong-based asset management firm) sold an equivalent number of Hindustan Aeronautics Ltd shares at the same price.
Analyst Views: Should You Buy Hindustan Aeronautics Ltd Shares?
Global brokerage UBS has upgraded its price target on HAL from ₹4,800 to ₹5,440, citing improved order book visibility and strong financial execution.
Key Insights from UBS:
✅ The order for 156 LCHs came as a positive surprise for investors.
✅ Engine delivery acceleration by GE should resolve execution concerns.
✅ Fast-tracking defence contracts signals strong government commitment to HAL.
✅ UBS has a ‘Buy’ rating on HAL shares with a PE target of 35x.
With the stock currently trading at ₹4,326, analysts believe Hindustan Aeronautics Ltd has strong upside potential, making it an attractive long-term investment.
Hindustan Aeronautics Ltd Share Price & Financial Ratios (At a Glance)
| Metric | Value |
|---|---|
| Market Cap | ₹2,89,335 Cr. |
| Current Price | ₹4,326 |
| 52-Week High/Low | ₹5,675 / ₹3,046 |
| Stock P/E | 33.5 |
| Book Value | ₹465 |
| Dividend Yield | 0.81% |
| ROCE | 38.9% |
| ROE | 28.9% |
| Face Value | ₹5.00 |
| Promoter Holding | 71.6% |
| Price to Book Value | 9.28 |
| ROIC | 21.0% |
| Debt to Equity | 0.00 |
| Pledged Percentage | 0.00% |
| Industry PE | 76.8 |
| Graham Number | ₹1,163 |
| Intrinsic Value | ₹1,601 |
| RSI | 70.6 (Overbought) |
| EPS | ₹129 |
| PEG Ratio | 1.27 |
| 200 DMA | ₹3,971 |
| Free Cash Flow (3Yrs) | ₹22,222 Cr. |
| Free Cash Flow (5Yrs) | ₹36,297 Cr. |
| Debt | ₹0.37 Cr. |
| Return on Assets | 10.1% |
Conclusion: Is Hindustan Aeronautics Ltd a Good Buy Now?
With a record order book, solid financials, and strong government backing, HAL remains a top defence stock in India. The ₹62,700-crore LCH order strengthens its revenue pipeline, while the recent stake purchase by Goldman Sachs adds institutional confidence.
🔹 Short-Term View: The stock is in an overbought zone (RSI 70.6), so minor corrections are possible.
🔹 Long-Term View: With rising defence spending and strong execution, HAL is a solid long-term investment.
📌 Verdict: Buy on dips for a long-term portfolio.
Q&A: Quick Takeaways for Investors
Q1: Why did Hindustan Aeronautics Ltd share price jump by over 7%?
A: The stock surged after HAL received a ₹62,700-crore contract from the Ministry of Defence for supplying 156 Light Combat Helicopters.
Q2: How strong is Hindustan Aeronautics Ltd’s financial position?
A: HAL has a ₹1,84,000-crore order book, zero debt, and strong free cash flow, making it financially sound.
Q3: What do analysts say about HAL stock?
A: UBS has a ‘Buy’ rating on HAL and raised its target price to ₹5,440, citing better order visibility and execution.
Q4: Is HAL a good buy for long-term investors?
A: Yes, given its strong growth outlook, rising defence orders, and zero-debt balance sheet, HAL is a solid long-term investment.
Q5: What are the risks to HAL’s growth?
A: Potential risks include delays in execution, supply chain disruptions, and changes in government defence policies.
📢 Final Thought: If you’re looking for a high-growth defence stock with government support, HAL should be on your watchlist! 🚀
What’s your view on HAL stock? Share your thoughts in the comments below! 👇
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.