UBS has lowered its target price on Hindustan Aeronautics Ltd. (HAL) to ₹4,800 from ₹5,700, citing misplaced negative market perceptions that have led to a recent stock correction. However, the brokerage remains bullish on HAL’s long-term growth potential, expecting limited impact on FY26E/27E earnings and upside risks to consensus order flow projections.
According to UBS, FY26 could be a pivotal year for India’s defense procurement, with HAL’s subsidiary HNAL (Hindustan Aeronautics Naval Aircraft Limited) likely to emerge as a major beneficiary. The firm expects HAL’s order book to expand nearly threefold by FY27, driving 19% compound annual growth rate (CAGR) in both revenue and earnings over FY26-FY27.
The brokerage also highlights strong execution capabilities and government support as critical factors that could fuel further upside in defense orders. With India prioritizing self-reliance in defense manufacturing, HAL is well-positioned to capitalize on Make in India initiatives and secure additional contracts for fighter jets, helicopters, and maintenance services.
About Hindustan Aeronautics Ltd.:
HAL is India’s largest defense aerospace company, engaged in the design, development, and manufacturing of aircraft, helicopters, and engines. The company plays a vital role in India’s defense modernization program, supplying aircraft to the Indian Air Force (IAF), Navy, and other armed forces. HAL is a key participant in India’s indigenous defense projects, including the Tejas Light Combat Aircraft (LCA), Light Utility Helicopter (LUH), and Advanced Medium Combat Aircraft (AMCA).
