 "Defence Research and Development Organisation (DRDO) conducts a successful flight test of the New Generation AKASH air defence missile from the Integrated Test Range, Chandipur, off the coast of Odisha on January 12, 2024. Image credit: PIB")
Hindustan Aeronautics (HAL) shares gained 2.2 per cent on Friday, April 11, 2025, logging an intraday high at ₹4,120 per share on BSE. The buying on the counter came as analysts at Motilal Oswal expect the company to benefit from a strong pipeline of projects and healthy financials over FY25-27.
Around 10:52 AM, HAL share price was up 1.69 per cent at ₹4,099 per share on BSE. In comparison, the BSE Sensex was up 1.54 per cent at 74,987.76. The market capitalisation of the company stood at ₹2,74,134.22 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.
Motilal Oswal has initiated coverage on HAL with a 'Buy' call. The brokerage has set the target for the stock at ₹5,100 per share.
The brokerage is upbeat on the company's strong pipeline of projects, execution scale-up aided by large platform orders, a stable stream of repair and overhaul (RoH) revenues, backward integration, and a healthy 29 per cent/33 per cent/29 per cent revenue/Ebitda/PAT CAGR over FY25-27. Ebitda refers to Earnings before interest, tax, depreciation and amortisation and PAT refers to profit after tax (PAT).
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The overall revenue will be primarily driven by a sharp scale up in manufacturing revenue and a 5 per cent CAGR in RoH and spares. The Ebitda will be fueled by indigenisation efforts taken by the company.
HAL’s order book stood at ₹1.8 trillion as of March 2025. This year, the order book has strengthened, following inflows of ₹1.2 trillion during FY25.
The company's RoH revenue has recorded a 17 per cent Compound annual growth rate (CAGR) over FY16-24.
Further, the brokerage reckons that near-term catalysts will emerge when aircraft deliveries commence as engine supplies from General Electric (GE) resume, while medium- to long-term triggers will stem from the finalisation of orders for 97 Tejas-Mk1A, Tejas MK-II, LUH, Advanced Medium Combat Aircraft (AMCA) totaling around ₹65,000 crore and commencement of aircraft deliveries.
HAL has a strong emphasis on research and development (R&D), for which it has 10 dedicated R&D centers. During FY18-23, R&D expenses have clocked a CAGR of 9 per cent, and the company has hiked R&D expenses as a % of sales to 9.5 per cent in FY24 from 6 per cent in FY20.
In the past one year, Hindustan Aeronautics shares have gained 10 per cent as compared to Sensex's fall of 0.53 per cent.
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