Shares of state-run defence manufacturer Hindustan Aeronautics Ltd (HAL) surged as much as 3.3% on Wednesday, August 20, after reports indicated that the Cabinet Committee on Security (CCS) has approved the purchase of 97 Light Combat Aircraft (LCA) Mark1A fighter jets worth ₹62,000 crore. The stock was last seen trading at ₹4,560.10, up 2.41% from its previous close of ₹4,452.60.
A major indigenous boost
If officially confirmed, this would mark one of the largest-ever purchase orders for HAL, with all fighter jets to be indigenously manufactured. The LCA Mark1A, an upgraded version of the Tejas aircraft, is designed to replace the ageing MiG-21 fleet and strengthen India’s defence preparedness.
Brokerage view
Global brokerage UBS has maintained its “neutral” rating on HAL with a price target of ₹4,900. The firm noted that this would be the second major order for the MK1A, after the earlier contract awarded in February 2021. Deliveries are expected to begin this fiscal, with six jets slated for handover, as the F404 engine supply bottleneck has now been resolved.
Market sentiment
HAL, with a market capitalization of ₹3.06 trillion, has drawn strong investor confidence, with 17 out of 22 analysts tracking the stock recommending a “buy”, three suggesting “hold”, and only two advising a “sell”.
The large-scale order is expected to further cement HAL’s leadership in India’s indigenous defence manufacturing push, aligning with the government’s “Atmanirbhar Bharat” initiative.
