HAL has signed an MoU with Russia’s United Aircraft Corporation (UAC) in Moscow for the production of the SJ-100 civil commuter aircraft in India. The twin-engine, narrow-body SJ-100, already in operation with over 200 units across 16 global airlines, is expected to significantly boost short-haul connectivity under India’s UDAN scheme.
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Motilal Oswal Report
Hindustai Aeronautics Ltd. is currently trading at 33.2x/29.5x/24.0x P/E on FY26E/FY27E/FY28E EPS. We broadly maintain our estimates and reiterate our Buy rating on the stock with an unchanged target price of Rs 5,800, based on the average of DCF and 32 times two-year forward earnings.
Hindustan Aeronautics’ Q2 FY26 revenue/PAT came in line with our estimates. Lower-than-expected margins were offset by higher other income.
During the quarter, the company received a follow-on order of 97 Tejas Mk1A worth Rs 624 billion and signed a contract with GE for engine supplies for this project.
We await the deliveries of Tejas Mk1A fighter jets as the test flight was already conducted in Oct’25.
HAL has a strong order book, which provides good visibility on future execution.
We broadly maintain our estimates and target price of Rs 5,800, based on the average of DCF and 32x Sep’27E earnings.
We maintain Buy on HAL. Tejas aircraft deliveries and execution of manufacturing order book will be key drivers for the stock going forward.
Key risks and concerns
Key risks would include
slower-than-expected finalization of large platform orders,
further delays in deliveries of key components such as engines for Tejas Mk1A,
delays in payments from MoD, and
increased involvement of the private sector.
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