CLSA has reiterated an outperform rating on Hindustan Aeronautics Ltd (HAL) with a target price of ₹5,436, highlighting that the company has crossed an important milestone by successfully conducting the first flight of the 13th LCA Mk 1A aircraft this week. The milestone comes against the backdrop of its target to deliver 12 aircraft in FY26, addressing concerns about its role in delivery delays.
The brokerage noted that GE has assured delivery of 12 engines in 2025 and 20 in 2026, which are critical for the final delivery schedule. The start of delivery of the first two fully armed Mk 1A aircraft is particularly significant as it strengthens HAL’s case for winning a repeat order worth ₹670 billion (US$7.8 billion). This order could expand HAL’s current backlog of US$22 billion by as much as 35%.
CLSA added that HAL’s decadal pipeline remains strong at around US$54 billion. It expects a large fighter aircraft order in 2025 and visibility on GE engine deals to serve as key catalysts for future growth.
Disclaimer: The views and recommendations made in this article are those of CLSA. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
