Hindustan Aeronautics (HAL) shares rose 2% in trade today; here's why

Hindustan Aeronautics (HAL) shares gained 2.4 per cent in trade on Friday, March 28, 2025, logging an intraday high at ₹4,265 per share on BSE. The aviation and aero-defense company's stock was in demand after it signed an amendment to the LCA Mk1 FOC Contract dated December 23, 2010, revising the contract value to ₹6,542.2 crore.

 

Around 11:28 AM, HAL share price was up 1.83 per cent at ₹4,237.9 per share on BSE. In comparison, the BSE Sensex was down 0.13 per cent at 77,503.72. The market capitalisation of the company stood at ₹2,83,560.6 crore. The 52-week high of the stock was at ₹5,675 per share and the 52-week low was at ₹3,045.95 per share.

 

"The company has signed today an amendment to the LCA Mk1 FOC Contract dated December 23, 2010. The value of the contract has been revised from ₹5,989.39 crore to ₹6,542.2 crore, on account of revision in the delivery schedule," the filing read. 

 

That apart, recently, GE Aerospace has delivered the first of 99 F404-IN20 engines ordered by HAL for the Tejas Mk-1A, reports suggested.

 

This addresses serious concerns about a supply bottleneck. HAL has said it will receive 12 engines this year.

 

While HAL could make 24 aircraft, given the engine supply, it is more likely to be a gradual ramp up from 10 aircraft deliveries to the Indian Air Force (IAF) in the financial year 2026 (FY26), to 24 aircraft per annum by FY30. Consistent supply of F-404 engines for Tejas Mk-1A is a big relief.

 

The Tejas Mk-1A is an ₹48,000 crore order accounting for 37 per cent of HAL's order book of ₹1.3 trillion. Given lumpy delivery schedules, revenue growth should be 25-28 per cent year-on-year (YoY) in FY26 and FY27, with an implied EPS CAGR of 39 per cent during FY25-FY27. 

 

HAL is a state-owned aerospace and defense company based in India. It is one of the largest aerospace manufacturers in Asia and plays a critical role in the development, production, and maintenance of aircraft, helicopters, and related systems for the Indian Armed Forces and civilian markets. 

 

The company has been instrumental in producing fighter jets, transport aircraft, and advanced avionics systems. It is also a key player in the defense sector, contributing to India's self-reliance in defense manufacturing.

 

In the past one year, HAL shares have gained 25 per cent against Sensex's rise of 5.3 per cent.