HAL reported a consolidated net profit of Rs 3,958 crore for the March quarter, down 8% from the previous year. However, the figure came in significantly higher than analyst estimates of Rs 2,592 crore. Revenue for the quarter declined by 7% year-on-year to Rs 13,700 crore. EBITDA was down 10% to Rs 5,292 crore, with margins narrowing by 140 basis points to 38.6%.
Despite the softness in headline numbers, HAL’s management guided for 8–10% revenue growth in FY26 and said the forecast would be reviewed after six months. The company also indicated that double-digit revenue growth could be achieved even earlier, possibly within the current financial year. Over the next three to four years, HAL aims to maintain an adjusted EBITDA margin of 31%.
Brokerages upbeat on long-term outlook
Nuvama Institutional Equities has maintained a “buy” rating on HAL with a target price of Rs 6,000 — implying a potential upside of 20.7% from Monday’s low.
“Hindustan Aeronautics reported a strong end to FY25 as it beat Street’s Q4FY25 revenue/EBITDA estimate by 4%/42%,” Nuvama said. The brokerage highlighted the company’s robust order inflows of Rs 1.2 lakh crore in FY25, taking the backlog to Rs 1.89 lakh crore. It added that a pipeline worth Rs 4.4 lakh crore, including orders for LCA Mk-IA, IMRH and AMCA, indicates sustained long-term growth.
Nuvama has projected a revenue CAGR of 21% over FY25–27E, driven by a richer product mix and Rs 15,000 crore in capex over 4–5 years. It raised its FY26E/FY27E EPS by 6%/2% and increased HAL’s valuation multiple to 40x from 35x.
Motilal Oswal Financial Services also retained a “buy” call with a target of Rs 5,650, implying a 13.6% upside. “We project its EBITDA margin to remain strong at 29.8%/28.6% for FY26/FY27, fueled by indigenization efforts,” the brokerage said.
The brokerage said it expects PAT to grow at a CAGR of 14% over FY25–27, supported by annual capex of Rs 40–50 billion and healthy working capital. With improving fundamentals, Motilal expects return ratios to remain robust, projecting RoE and RoCE to reach 21.8% and 22.4% respectively by FY27.
Antique Stock Broking has taken the most bullish stance, raising its target to Rs 6,545 from Rs 4,884 — a potential upside of 31.6%. “HAL delivered a reasonably robust operational performance considering supply-side challenges from GE for the Tejas Mk-1A fighter aircraft,” it noted.
The brokerage cited ongoing modernisation of India’s armed forces and a favourable geopolitical backdrop as structural tailwinds for HAL. It now expects a 15% earnings CAGR over FY25–27E and has raised its FY26/FY27 earnings estimates by 20% and 34% respectively.
Should you buy, sell or hold HAL stock?
Despite a decline in Q4 earnings, HAL’s ability to beat estimates, coupled with a robust order book and upbeat management guidance, has reinforced confidence among analysts. With target prices ranging from Rs 5,650 to Rs 6,545, brokerages see an upside of 13.6% to 31.6% from current levels.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
