Shares of Hindustan Aeronautics Ltd (HAL) slipped 0.52% to Rs 4,723.90 in Thursday’s session, following mixed reactions to the company’s Q2 FY26 results and subsequent brokerage reports.
The defence PSU’s earnings were below street expectations on the operational front, though higher other income supported bottom-line performance. HAL’s EBITDA margin fell to 23.5%, compared to 27.4% last year and well below the CNBC-TV18 poll estimate of 28.2%. The company’s EBITDA stood at Rs 1,558 crore, down 5% YoY, while net profit rose 10.5% YoY to Rs 1,669 crore, slightly missing expectations.
Revenue increased 11% YoY to Rs 6,629 crore, broadly in line with projections, though EBITDA margin for H1 FY26 came in at 24.8%, trailing the full-year guidance of 31%.
Despite the margin miss, Nomura maintained its bullish stance with a ‘Buy’ rating and a target price of Rs 6,100, highlighting the company’s strong order execution pipeline and healthy balance sheet. It expects a 24% EPS CAGR over FY25–28 and noted that HAL’s manufacturing book-to-bill ratio stands at 31x FY25 sales.
CLSA, meanwhile, retained an ‘Outperform’ rating with a target of Rs 5,436, citing HAL’s Rs 54 billion decadal order pipeline and upside from fighter aircraft and GE engine co-production deals. Morgan Stanley remained ‘Equal-weight’ with a target of Rs 5,092, flagging operational weakness but acknowledging higher other income and treasury gains as positive offsets.
The brokerage consensus suggests that while short-term margin pressures persist, HAL’s long-term growth outlook remains intact, backed by sustained defence demand and major strategic contracts.
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