HAL stock poised for 34% rally; Antique sets highest target on earnings

Antique Broking maintained its 'Buy' rating, with a target price of ₹6,360 per share, the highest target assigned by any analysts under the Bloomberg coverage

Shares of Hindustan Aeronautics (HAL) are poised for another 34 per cent upside, according to analysts at Antique Stock Broking, as they factor in multi-year double-digit earnings growth potential despite a near-term "volatile" financials. 

 

The domestic brokerage maintained its 'Buy' rating on the HAL stock, with a target price of ₹6,360 per share, the highest target assigned by any analysts under the Bloomberg coverage. The target price implies a potential upside of 34 per cent from Friday's closing price. 

 

The Aerospace and Defence has received delivery of a GE-404 engine for Light Combat Aircraft (LCAs) and is expected to receive a fourth engine by September-end, Antique said, quoting media reports. The company is likely to deliver the first two Tejas Mk-1A aircraft in October, marking the beginning of revenue recognition from its existing order book of 83 Tejas Mk-1A jets.

 

A consistent monthly supply of two engines from GE could pave the way for the finalisation of an additional order for 97 Tejas Mk-1A aircraft, taking the total backlog to 180 units, the brokerage said. "This would materially enhance revenue visibility and further strengthen HAL's existing order book of ₹2.5 trillion."

 

While near-term financials may remain volatile due to supply chain challenges in executing the Tejas Mk-1A programme, analysts remain positive on HAL, citing multi-year double-digit earnings growth potential and robust return ratios of over 20 per cent. 

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  In August, the Indian government approved a ₹62,000 crore deal to procure 97 additional indigenous Light Combat Aircraft (LCA) Tejas Mk1A fighter jets for the Indian Air Force (IAF). 

 

The long-term order pipeline also remains strong, with programmes such as Tejas Mk II, AMCA, TEDBF, IMRH, LCH and ALH expected to offer HAL business opportunities worth ₹4.5 trillion over the next decade, Antique said. Additionally, HAL is working on a joint venture with Safran to co-develop and manufacture turboshaft engines in India, focusing on the IMRH and DBMRH programmes. 

HAL Q1 results

HAL’s revenue rose 10.8 per cent year-on-year (Y-o-Y) to ₹4,819 crore, indicating steady execution despite a modest revenue miss. Net profit declined 4.11 per cent Y-o-Y to ₹1,377 crore in Q1FY26, compared to ₹1,436 crore in the same quarter last year (2024-25/FY25), but still came in ahead of expectations. 

 

Operationally, HAL delivered a standout performance. Earnings before interest, tax, depreciation, and amortisation (Ebitda) surged 29.2 per cent Y-o-Y to ₹1,284.3 crore, while margins expanded sharply to 26.7 per cent from 22.86 per cent in Q1FY25.  

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HAL stock movement

The company's stock rose as much as 1.52 per cent during the day to ₹4,817.9 per share. The stock pared gains to trade 1.2 per cent higher at ₹4,803 apiece, compared to a 0.03 per cent decline in Nifty 50 as of 9:25 AM. 

 

Shares of the company extended their gains for the third day and currently trade at 2.7 times the average 30-day trading volume, according to Bloomberg. The counter has risen 15 per cent this year, compared to a 6.2 per cent advance in the benchmark Nifty 50. HAL has a total market capitalisation of ₹3.17 trillion. 

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