Analysts see strong boost to HAL's orderbook after MoD orders 97 Tejas jets

Nomura maintains a 'Buy' rating on HAL with a target price of ₹6,100, citing the streamlined delivery process and the bolstered order book as key positives.

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Hindustan Aeronautics Limited (HAL) has secured a major contract from the Ministry of Defence (MoD) for the procurement of 97 Light Combat Aircraft (LCA) Mk1A jets, valued at ₹62,400 crore (excluding taxes). The contract, approved by the Cabinet Committee on Security in August 2025, comprises 68 single-seater and 29 twin-seater aircraft along with associated equipment. Deliveries are slated to begin in FY28 and are expected to be completed over a six-year period.

 

According to analysts, this order considerably strengthens HAL’s robust order book. With the inclusion of this contract, HAL’s total order book is estimated at ₹2.45 trillion by the end of Q2FY26F, with the manufacturing segment accounting for ₹2.25 trillion. This translates into a book-to-bill ratio of 32x based on FY25 revenue, underlining the company’s strong revenue visibility over the medium-term, Nomura analysts said.

 

Those at Motilal Oswal highlighted that the follow-on order complements HAL’s previous contract for 83 LCA Mk1A jets received in January 2021. “GE has now overcome previous supply chain issues and resumed normal deliveries of the F404 engines, which is expected to accelerate aircraft deliveries in the coming quarters,” analysts noted. HAL is also expected to finalise a related $1 billion order for 113 new F404 engines from General Electric in the coming weeks, further supporting timely execution.  ALSO READ | Tata Motors shares rise 2% as JLR restarts operations after cyberattack 

Analysts also pointed to HAL’s focus on indigenisation. The newly ordered aircraft are expected to have over 64 per cent indigenous content, including 67 additional items over and above the earlier contract. Advanced indigenously developed systems, such as the UTTAM Active Electronically Scanned Array (AESA) radar, Swayam Raksha Kavach, and control surface actuators, will be integrated, reinforcing the government’s push for domestic manufacturing. Close to 105 Indian vendors are directly engaged in the production of detailed components for the project, further boosting the local aerospace ecosystem.

 

Despite previous delays caused by the late supply of F404-IN20 engines from GE, HAL has already demonstrated resilience. Thirteen LCA Mk1A jets have completed their first trial flights with CAT-B F404 engines, and two aircraft are currently undergoing weapon trials. Analysts believe this readiness will allow HAL to quickly commence deliveries as engine supplies normalise.

 

Amid this backdrop, Nomura maintains a ‘Buy’ rating on HAL stock with a target price of ₹6,100, citing the streamlined delivery process and the bolstered order book as key positives. Motilal Oswal echoed the positive stance, retaining a ‘Buy’ rating with an unchanged target price of ₹5,800, noting the expected ramp-up in production and deliveries from Q3FY26 onward.

 

On the bourses, Hindustan Aeronautics shares were trading higher in a weak market, rising as much as 1.33 per cent to an intraday high of ₹4,839.95. At 10:01 AM, the HAL stock was trading 0.57 per cent higher at ₹4,803, , while the BSE Sensex fell 0.30 per cent to 80,916.80.

 

That said, the follow-on order marks a major milestone for HAL, strengthening its position as the cornerstone of India’s indigenous defence manufacturing drive while providing long-term revenue visibility and execution momentum.