HAL shares rally 8% as UBS lifts target to Rs 5,440 on Rs 62,700 crore defence order win

Shares of Hindustan Aeronautics Ltd (HAL) jumped as much as 7.6% on Tuesday to Rs 4,492.8 on the BSE after brokerage UBS maintained a buy rating on the state-run defence company and raised its target price to Rs 5,440 from Rs 4,800, citing strong order momentum and revenue acceleration.

The latest boost for HAL comes after it secured two contracts worth Rs 62,700 crore from the Ministry of Defence for the supply of 156 Light Combat Helicopters (LCH), Prachand, to the Indian Army and Indian Air Force.

“The Ministry of Defence signed two contracts with the Company today for supply of 156 Light Combat Helicopters (LCH), Prachand to Indian Army (90 Nos) and Indian Air Force (66 Nos) along with training and other associated equipment worth around Rs. 62,700 Crore excluding taxes,” HAL said. Deliveries are expected to commence in the third year and continue over five years.

UBS called the order a “positive surprise” both in terms of value—Rs 627 billion versus its Rs 450 billion estimate—and timing, as it was expected in Q1FY26. The brokerage also highlighted that the LCH Prachand will have 65% indigenous content, further strengthening India’s domestic defence manufacturing ecosystem.

Separately, HAL reported provisional revenue of Rs 30,400 crore for the financial year ended March 31, 2025, nearly unchanged from Rs 30,381 crore a year earlier. “This achievement was despite the shortfall in deliveries of LCA and ALH,” said Dr D K Sunil, CMD, HAL, citing supply chain issues and temporary fleet groundings. The company’s order book stood at Rs 1,84,000 crore, significantly higher than the Rs 94,129 crore at the start of the fiscal year.

UBS noted that HAL ended FY25 with a “strong beat on orders” and expects FY26 to be an “inflection year for defence ordering,” driven by accelerating decision-making. The brokerage also revised its execution estimates for the Tejas fighter jet program, projecting seven deliveries in FY26 and 14 in FY27, up from earlier estimates of six per year. This has led UBS to increase its FY26 and FY27 revenue and earnings estimates for HAL by 3% each.Adding to investor interest, Goldman Sachs purchased HAL shares worth Rs 161 crore via open market transactions on March 28, while Hong Kong-based Kadensa Capital sold an equal number of shares.HAL shares have gained 30.3% in the past year, surging 40.4% in the last month and nearly 5% in the past week. The stock is trading above seven of its eight key simple moving averages but remains below its 200-day SMA. The 14-day Relative Strength Index (RSI) stands at 70.6, indicating overbought conditions.

UBS’s revised target price of Rs 5,440 per share for HAL implies a 21% potential upside from the stock’s current levels.

According to Trendlyne data, 14 out of 15 analysts covering HAL recommend a buy, with only one suggesting a sell.

Also read | HAL shares jump over 7% after Rs 62,700-crore deal with defence ministry

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