Tejas fighter jet mishap doesn't shake HAL's long-term prospects: Choice

While export sentiment may see a temporary setback, brokerage believes the near- to medium-term focus remains firmly on domestic deliveries, particularly the production ramp-up of the Tejas Mk-1A

Hindustan Aeronautics (HAL) is expected to remain on a firm footing despite last week’s crash of a Tejas Mark-1 fighter aircraft at the Dubai Air Show, according to domestic brokerage Choice Institutional Equities. The firm said it expects short-term volatility in the stock but does not see any structural impact on the programme.

 

Choice has maintained its ‘Buy’ rating on HAL stock with a target price of ₹5,570, valuing the company at 35x FY27/28E average EPS. HAL shares ended last week’s trading session at ₹4,593 per share on the NSE. The assigned target price implies a 21.27 per cent upside from the current market price (CMP).

HAL Tejas mishap

On Friday, November 21, an IAF Tejas Mark-1 fighter jet—built by HAL—crashed during a demonstration at the Dubai Air Show, resulting in the death of Wing Commander Namansh Syal. Initial assessments by experts suggest the mishap may have been triggered by a negative-G manoeuvre. The Indian Air Force has ordered a Court of Inquiry to determine the exact cause.

 

According to Choice, while the incident is deeply unfortunate, it should be viewed within the broader operational context of high-performance fighter aircraft, especially during training and high-intensity displays.

Why this matters

The brokerage highlighted that the Tejas programme is highly advanced; very few countries have successfully developed an indigenous light combat aircraft of this complexity. During training periods or high-intensity demonstration flights, accidents—though rare—are a recognised operational risk. This event, Putta Ravi Kumar, research analyst at Choice, believes, should be considered in the broader context of the programme's overall safety record, steady progress, and continued delivery momentum.

Global context

Globally, even advanced fighter jets—F-35, Rafale, Gripen, among others, Choice said, have witnessed accidents during testing, training, or airshow routines.

 

“In this context, HAL’s Tejas mishap falls within the normal risk envelope, and its accident ratio remains among the lowest of modern fighters. This is not alarming; it is the reality of cutting-edge military aviation. The impact on short-term sentiment does not indicate systemic programme failure,” the brokerage said in its report.

Long-term view on HAL remains intact

The brokerage emphasised that this incident does not signal any structural issue with the Tejas programme. Instead, it expects HAL’s long-term fundamentals to remain strong, supported by robust execution, healthy order visibility, and the company’s strategic relevance to India’s defence modernisation push.

 

While export sentiment may see a temporary setback, Kumar believes the near- to medium-term focus remains firmly on domestic deliveries, particularly the production ramp-up of the Tejas Mk-1A. By the time export opportunities gain momentum, Choice expects the situation to normalise and investor concerns to ease.  (Disclaimer: Target price and stock outlook has been suggested by Choice Institutional Equities. Views expressed are their own.)