HAL Share Price Climbs Over 7% Following ₹62,700-Crore from Ministry of Defence

On March 28, Hindustan Aeronautics Ltd. declared it had inked two agreements with the Ministry of Defense to provide the Indian Army with light combat helicopters.

Following receiving new orders totaling ₹62,700 crore from the Ministry of Defence, the share price of Hindustan Aeronautics Ltd. (HAL) increased by more than 7% in early trading on Tuesday. On the BSE, shares of HAL, the PSU defense stock, surged up to 7.58% to ₹4,492.80 per.

On March 28, the government-owned defense firm Hindustan Aeronautics Ltd. declared it had inked two agreements with the Ministry of Defense to provide the Indian Army with light combat helicopters.

To supply the Indian Army (90) and Indian Air Force (66) with 156 Light Combat Helicopters (LCH), Prachand, along with training and other related equipment, the Ministry of Defense signed two contracts with the company today, HAL said. The total value of the contracts, excluding taxes, was approximately Rs. 62,700 Crore. Beginning in the third year, the supply of these helicopters will be distributed over the following five years.

According to a separate regulatory filing, HAL reported ₹30,400 crore (provisional and unaudited) in revenue for the year that concluded on March 31, 2025, compared to ₹30,381 crore in the prior year.

This accomplishment was made despite the LCA and ALH delivery shortage. The lack of engines had an impact on the delivery of LCA. The January 2025 accident and consequent Fleet grounding affected the ALH delivery timeline. However, we were able to preserve the top line by expediting the delivery of other goods and services, according to Dr. D K Sunil, CMD, HAL.

After correcting for the current year’s liquidation, HAL’s order book was worth ₹1,84,000 crore, compared to the initial order book position of ₹94,129 crores. In 2024–2025, HAL was awarded ₹1,02,000 crore in new manufacturing contracts and ₹17,500 crore in ROH contracts.

On Friday, March 28, Goldman Sachs purchased shares of defense PSU Hindustan Aeronautics Ltd. for more than ₹161 crore through open market transactions. According to BSE block deal data, through its affiliate Goldman Sachs (Singapore), Goldman Sachs bought 3,85,774 HAL shares for ₹4,176.25 each.

In the meantime, Kadensa Capital, an asset management company based in Hong Kong, sold the same quantity of HAL shares at the same price through its subsidiary, Kadensa Master Fund. According to international trading company UBS, granting the order for 156 Prachand was a welcome surprise.

Concerns about declining defense spending should be addressed, as should execution challenges and the recent fast-tracking of the contract for LCH Prachand. GE should start delivering engines with a faster delivery timetable. Although we don’t anticipate purchasing fifth-generation fighter aircraft through foreign military sales (FMS) would significantly affect HAL’s TAM, UBS noted that the most significant impact may be 4-5 percent.

UBS has given HAL shares a “Purchase” recommendation. Due to better order book and P&L execution visibility, it increased its 12-month forward PE from 32x to 35x (still 10% behind BHEL) and upped the target price of HAL shares to ₹5,440 per from ₹4,800 previously. Regarding broader industry coverage, UBS continues to like Hindustan Aeronautics shares.