HAL Shares Fly 4% on Govt Nod For Rs 62,000-crore Tejas Mk1A Order

Shares of Hindustan Aeronautics flew 4% on August 20, buoyed by reports suggesting the state-owned defence manufacturer is set to clinch one of its largest-ever contracts.

According to a report by CNBC-TV18, citing sources, the Cabinet Committee on Security has cleared the purchase of 97 Light Combat Aircraft (LCA) Mark 1A fighter jets, worth around ₹62,000 crore. A formal announcement would mark a significant boost for HAL’s indigenous Tejas programme, designed to replace India’s ageing MiG-21 fleet.

The LCA Mk1A, an upgraded version of the Tejas, is built for improved combat capabilities. HAL had earlier won an order for 83 jets in February 2021, and deliveries from the new contract are expected to begin this year, with six aircraft slated for FY26. Progress had been delayed previously due to engine supply constraints, which are now easing.

Brokerage UBS has held on to a ‘neutral’ rating on HAL with a target price of ₹4,900, stating that the fresh order will add to the company’s already strong pipeline.

HAL recently posted a mixed June-quarter performance. Its net profit fell 4 % year-on-year to ₹1,383.8 crore, but revenues climbed 10.8% to ₹4,819 crore. A stronger product mix and steady execution from its ₹1.89 lakh crore order book lifted operating performance. Ebitda jumped nearly 30% to ₹1,284 crore, with margins improving to 26.7% from 22.8% a year ago, faring better than Street expectations of a contraction.

In response to HAL’s Q1 numbers, Motilal Oswal had said deliveries are likely to accelerate as US-based GE ramps up engine supplies, further strengthening the defence major’s revenue visibility.

With one of its largest-ever orders set to be finalised, improving margins, and a backlog that already stretches years ahead, HAL set to benefit from India’s defence manufacturing ambitions.

While the stock has remained among the Street’s top defence bet, profit booking after a sharp rally in recent years has kept gains for shares of HAL muted for 2025. Year-to-date, the stock is up around 9%, a sharp cut from its three year returns of over 300%.