Shares of Hindustan Aeronautics (NSE:HIAE) Limited (HAL) remain in focus as global brokerages reaffirm their bullish outlook on the state-run defense company. JPMorgan (NYSE:JPM) has assigned an ‘Overweight’ rating to HAL, setting a target price of INR 4,958 per share, reflecting a 20% upside from its last closing price of INR 4,128.3.
The optimism follows GE Aerospace’s commencement of F404-IN20 engine deliveries for the Light Combat Aircraft (LCA) Mk1A program, a key milestone for HAL. The delayed engine supply had been an overhang on the stock, but with deliveries now in progress, analysts believe the uncertainty has lifted, paving the way for smoother execution of HAL’s defense contracts.
HAL Set to Ramp Up Tejas Deliveries
In a recent note, Elara Capital highlighted HAL’s plans to ramp up production of the Tejas Mk1A fighter jets. The company expects to deliver 10-11 aircraft in FY26, generating estimated revenues between INR 3,000 crore and INR 3,500 crore. With installed capacity set to expand to 24 aircraft per year (16 in Bengaluru and 8 in Nashik), HAL is on track to fulfill its commitment of delivering 83 Tejas Mk-1A jets by FY29.
Morgan Stanley (NYSE:MS) Eyes $60 Billion Order Pipeline
HAL’s strong growth potential also caught the attention of Morgan Stanley, which added the stock to its focus list on March 27. The brokerage anticipates an order pipeline exceeding $60 billion over the next decade, reinforcing HAL’s near-monopoly position in India’s defense sector. Morgan Stanley remains ‘Overweight’ on HAL, with an aggressive price target of INR 5,292.
Is HAL Overvalued? InvestingPro’s Fair Value Signals Caution
Despite HAL’s strong growth prospects, valuation remains a crucial factor for investors. InvestingPro’s Fair Value tool estimates HAL’s intrinsic value at INR 3,723.3 per share, suggesting a 10.7% downside from the current market price of INR 4,170.
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