News

Shares of Hindustan Aeronautics Limited (HAL) fell sharply on Thursday, extending losses for a second straight session. The stock slipped over 6 per cent in early trade to Rs 3,952 on the NSE. With this, HAL shares are down around 12 per cent in just two sessions.

The decline followed media reports suggesting that the state-owned defence major was not shortlisted to develop and manufacture next-generation fighter jets under the Advanced Medium Combat Aircraft (AMCA) programme. The reports hurt sentiment and led to heavy selling in the stock.

HAL moved quickly to address the reports. In an exchange filing, the company said it has not received any official communication on the AMCA programme. As a result, it is not in a position to comment at this stage.

The company reiterated that it has a strong confirmed order book. This provides clear revenue visibility. HAL also said it has a healthy production and execution pipeline that extends up to 2032.

HAL highlighted that it is advancing several strategic projects. These include the Indian Multi Role Helicopter (IMRH), LCA Mk2 and the Combat Air Teaming System (CATS).

These programmes are expected to enter production after 2032. Management said they will strengthen the company’s technology base and long-term growth prospects.

HAL is also expanding into civil aviation. Platforms such as Dhruv NG, Hindustan 228 and SJ 100 are part of this push to diversify revenue streams.

The company also clarified the status of LCA Mk1A deliveries to the Indian Air Force. HAL said five aircraft are fully ready for delivery and meet the contracted specifications.

Another nine aircraft have been built and flown. These will be delivered after engines are received from GE. HAL has received five engines so far.

The company said the supply outlook from GE is positive. It added that all design and development issues are being addressed on a fast-track basis. HAL remains in active talks with the Air Force and expects to meet its delivery guidance for the current financial year.

HAL said its board will meet on Thursday, 12 February 2026. The board will consider the audited financial results for the quarter and period ended 31 December 2025.

The meeting will also consider the declaration of the first interim dividend for FY26.

Global brokerages remain divided on the stock outlook after the sharp correction.

JP Morgan view

JP Morgan has maintained an Overweight rating on HAL with a target price of Rs 6,004.

The brokerage said HAL missing out on the AMCA role is a negative event, but it was largely expected. This is due to the fast-track nature of the AMCA programme.

JP Morgan noted that HAL already has a very large order book, nearly seven times its annual revenue. It also flagged delays in LCA Mk1A deliveries as a known issue.

After the recent correction, valuations look attractive, according to the brokerage.

JP Morgan believes HAL still has ample opportunities to win large defence orders, even without AMCA.

Morgan Stanley view

Morgan Stanley has downgraded the stock to Underweight from Equalweight. It cut its target price to Rs 3,355 from Rs 5,092.

The brokerage pointed out that HAL has outperformed the Nifty by about 4 per cent year-to-date. It also said consensus valuations have corrected, with the P/E multiple down 15 per cent over the past year.

However, Morgan Stanley sees downside risks. These include rising private sector competition and the risk of slower execution due to high import dependence, especially as many countries step up defence spending.

The brokerage has cut its earnings estimates by 2 per cent for FY27 and 5 per cent for FY28.