Hindustan Aeronautics Limited (HAL) reported a better-than-expected first quarter for FY26, with strong revenue growth and robust margins prompting a positive view from JPMorgan but a more cautious stance from UBS. The defence major posted an 11% year-on-year rise in revenue in the quarter, ahead of its full-year guidance of 8–10% growth, easing concerns over execution pace. JPMorgan, which has an overweight rating on the stock with a target price of ₹6,105, said the revenue performance provides comfort on the company’s ability to meet its FY26 growth targets, which had been a key investor concern.
The quarter also saw a notable improvement in profitability. EBITDA margins stood at 27%, compared with JPMorgan’s forecast of 23%, resulting in profit before tax of ₹18.5 billion, which was 16% ahead of the brokerage’s estimate of ₹16 billion. JPMorgan highlighted the stronger-than-expected margins as a key positive alongside the healthy revenue growth, signalling that HAL is executing well on its current order book.
UBS, however, struck a more tempered tone despite acknowledging the operationally stronger performance in the quarter. The brokerage cut its target price to ₹4,900 from ₹5,250 and maintained a neutral rating, citing execution challenges, potential risks to margins, and the absence of large new orders until FY28 as factors likely to limit near-term upside. UBS has also revised its valuation multiple down to 30 times earnings from 35 times, reflecting its more cautious view.
While HAL’s Q1 results have addressed some concerns about revenue momentum, the divergence in brokerage views underscores differing assessments of its medium-term growth trajectory. For bullish analysts, the quarter’s performance strengthens confidence in guidance and margin resilience, while more cautious voices point to the need for sustained execution and fresh order inflows to support a re-rating.
Disclaimer: The views and recommendations made in this article are those of the respective brokerages. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
