HAL shares plunged over 8% after Tata Advanced Systems, L&T and Bharat Forge were shortlisted for AMCA fighter jet project, while HAL missed out.
The ₹15,000-crore AMCA project, India's largest defence R&D initiative, will see a final winner chosen within three months, with total orders expected to multiply later.
Analysts say HAL stock remains under pressure, with weak momentum and key support near ₹4,100.
Shares of state-owned defence major Hindustan Aeronautics Ltd (HAL) fell sharply on Wednesday after reports said the company was not shortlisted to manufacture India's next-generation fighter jets under the Advanced Multirole Combat Aircraft (AMCA) programme.
The shares plunged as much as 8.3% during the early day, hitting an intraday low of ₹4,100 on the BSE and ₹4,097.60 on the NSE. Meanwhile, shares of Larsen & Toubro (L&T) and Bharat Forge, both of which were shortlisted under the programme, were trading over 1% higher in early trade.
3 February 2026
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The government shortlisted three private sector companies, Tata Advanced Systems, L&T and Bharat Forge to develop and manufacture the fifth-generation fighter jets under the programme, according to Economic Times. The final winner is expected to be selected within the next three months, after the shortlisted firms submit detailed commercial bids for building prototypes.
Notably, there were seven firms who were vying for the contract to manufacture the series production which is slated to begin by 2035, The Print reported. Adani Defence & Aerospace is one of the contenders as last year, one of the company executives confirmed to India Today that it will take part in the programme
Why HAL Didn't Make It to AMCA
While all major Indian defence manufacturers had submitted bids for the mega project, the shortlisting was based on technical expertise, manufacturing capability, financial strength and existing order books, the report said.
Companies were required to demonstrate their ability to absorb the AMCA design and show prior experience in engineering, development, manufacturing, integration and testing of complex aerospace systems. One of the conditions also discouraged firms with very large pending order books, which may have reportedly worked against HAL.
Market View on HAL Shares
Commenting on the stock's performance, Hitesh Tailor, Technical Research Analyst at Choice Broking, said HAL is currently going through a consolidation phase.
“HAL is currently trading around ₹4,235, navigating a retracement phase within its broader long-term uptrend. On the weekly chart, the stock is oscillating in a sideways zone between ₹4,000 and ₹4,500. It is currently facing stiff resistance at the 50-week EMA (Exponential Moving Average) near the ₹4,450–₹4,550 range, while the 100-week EMA around ₹4,100 provides a critical floor that must be sustained to maintain the structural integrity of the trend,” Tailor said.
He added that weak momentum indicators suggest limited buying interest in the short term, and that the stock is in a "wait-and-watch" phase. "For a fresh bullish entry, traders should wait for a decisive breakout above ₹4,500 supported by healthy volume," Tailor further said.
What is AMCA Programme
The AMCA project is reportedly considered India's biggest military research and development programme to date. In 2025, the Defence Ministry cleared the AMCA Execution Model, allowing both public and private sector companies to participate in the programme.
This marked the first time a fighter aircraft development project of such scale was opened to private players. The selected company will work with the Aeronautical Development Agency (ADA) to build five fighter jet prototypes, for which the government has allocated an indicative budget of ₹15,000 crore.
Once the aircraft is proven and cleared for induction, the final order value is expected to be several times larger. The Indian Air Force is likely to place an initial order for around 120 aircraft, with deliveries expected to begin around 2035.
More advanced versions could further increase the total order size over time. The fifth-generation AMCA fighter jets are expected to become the backbone of India's air combat strength from the mid-2030s, ET reported.
