HAL Delivery Push Draws Bullish Calls From CLSA, Citi, Goldman Sachs With Upto 27% Upside — Check Target Prices

Hindustan Aeronautics Ltd. is seeing a sharper focus on execution as deliveries across fighter aircraft, trainers and helicopters begin to broaden, prompting multiple brokerages to retain positive views on the defence stock.

CLSA, Citi and Goldman Sachs have all maintained their respective ratings on HAL, with target prices ranging from Rs 5,481 to Rs 6,175. The common thread across the reports is improving delivery visibility as supply constraints ease and more platforms move from production and testing into actual handovers.

CLSA maintained its Outperform rating with a target price of Rs 5,481, describing delivery execution as the key near-term focus. HAL has received 10 GE F404-IN20 engines and expects to deliver 10 Tejas Mk-1A aircraft by March, while GE has committed to supplying another 12 engines by December, according to the brokerage. 

Citi, meanwhile, maintained its Buy rating with a higher target price of Rs 6,175. It said execution is broadening across platforms after HAL handed over the final two LCA FOC trainers, three HTT-40 basic trainers and four Dhruv NG helicopters. Citi sees the broader delivery ramp-up as improving visibility beyond the Tejas programme.

Goldman Sachs maintained its Buy rating with a target of Rs 5,870, pointing to improving deliveries across aircraft and helicopters. It said supply constraints are gradually easing, allowing aircraft to move through production and testing into deliveries.

Brokerages on Hindustan Aeronautics (HAL)

Citi

• Maintain Buy; Target Price: Rs 6,175.
• Execution is broadening across platforms, with multiple handovers demonstrating improving execution breadth.
• Dhruv NG execution is progressing well and establishes a valuable civil aviation reference.
• HTT-40 creates another scalable production stream, despite execution delays.

CLSA

• Maintain Outperform; Target Price: Rs 5,481.
• Believes the best is yet to come, with execution expected to improve in H2.
• HAL remains the cheapest pure-play defence stock despite its sector-leading position.
• The stock trades at a premium to global aerospace peers, which CLSA considers justified.
• HAL has received 10 GE F404-IN20 engines and expects to deliver 10 Tejas Mk-1A aircraft by March.
• GE has committed to supplying another 12 engines by December.
• HAL highlighted the start of LCA Mk-1 delivery in Q2 and US$27 billion in business visibility.

Goldman Sachs

• Maintain Buy; Target Price: Rs 5,870.
• Platform deliveries are improving across both aircraft and helicopters.
• HAL's manufacturing portfolio is beginning to ramp up, with deliveries increasing across multiple platforms.
• Recent handovers span fighter and trainer aircraft as well as helicopters.
• Improving engine availability is supporting the LCA Mk-1A programme, while supply constraints are gradually easing.
• Aircraft are moving from production and testing into deliveries.
• Expects the focus to increasingly shift towards execution and order conversion.
• The development is consistent with the government's continued emphasis on the defence sector.

ALSO READ: HAL Hands Over Tejas Trainers, HTT-40 To IAF; Dhruv NG Helicopters To Pawan Hans

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