UBS has reiterated its ‘Buy’ rating on Hindustan Aeronautics Limited (HAL) while raising the target price to ₹5,440 per share, suggesting a substantial upside from the current market price of ₹4,179.90. The brokerage termed the recent award of an order for 156 units of the Light Combat Helicopter (LCH) Prachand as a positive surprise both for UBS and the broader market.
UBS highlighted that this development reflects an acceleration in the government’s decision-making pace on defence procurement, which bodes well for India’s indigenous defence manufacturing sector. The Prachand, with a 65% indigenous content, is expected to further strengthen the domestic defence ecosystem, adding long-term value for HAL and its supply partners.
Additionally, the delivery of LCA Mark 1A Tejas fighter jets is projected to drive a significant ramp-up in HAL’s profit and loss (P&L) performance over the next three years, according to UBS.
Overall, the brokerage remains bullish on HAL’s prospects, given the increasing indigenisation in defence and strong execution on existing and upcoming orders.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.
