HAL Shares Surge as Cabinet Approves ₹62,000 Crore Order for 97 LCA Mk-1A Jets, with More Potential Triggers Ahead
Hindustan Aeronautics Ltd. (HAL) has received approval from the Cabinet Committee on Security for the procurement of 97 Light Combat Aircraft (LCA) Mk-1A jets, valued at ₹62,000 crore. This order, HAL's second for MK1A, is expected to boost the company's order book. The LCA Mark1A is an upgraded version of the Tejas fighter jet, designed to replace aging MiG-21 aircraft. HAL's stock rebounded to trade at ₹4,498.80 following the news. UBS maintains a 'Neutral' rating on HAL with a price target of ₹4,900. Five additional major triggers are anticipated for HAL in the near future.

*this image is generated using AI for illustrative purposes only.
Hindustan Aeronautics Ltd. (HAL) shares rebounded from early losses to trade higher at ₹4,498.80 following a significant development in India's defense sector. The Cabinet Committee on Security (CCS) has approved the procurement of 97 Light Combat Aircraft (LCA) Mk-1A jets, valued at ₹62,000 crore, for the Indian Air Force. This large order is expected to boost HAL's order book guidance for the full year, with potentially five more major triggers ahead for the defence PSU.
Key Highlights
- The CCS approved the proposal for 97 LCA Mk-1A jets.
- This marks HAL's second MK1A order, following one received in February 2021.
- The LCA Mark1A is an upgraded version of the Tejas fighter jet, designed to replace aging MiG-21 aircraft.
- UBS maintains a 'Neutral' rating on HAL with a price target of ₹4,900.
- Five additional major triggers are anticipated for HAL, though specific details are not yet available.
Order Details and Market Reaction
HAL, in a regulatory filing, confirmed that the Ministry of Defence communicated the CCS approval for the procurement of 97 Light Combat Aircraft Mk-1A, along with associated equipment. This substantial order is expected to bolster HAL's order book and reinforce its position in India's defense manufacturing sector.
The market reacted positively to this news, with HAL's stock recovering from early losses to trade higher. The stock has gained 7.00% year-to-date, reflecting investor confidence in the company's growth prospects.
Analyst Outlook
UBS, a leading financial services firm, maintains a 'Neutral' rating on HAL stock with a price target of ₹4,900. The firm expects deliveries of the LCA Mk-1A to commence with 6 jets in the current financial year.
Among the 22 analysts covering HAL:
Recommendation | Count |
---|---|
Buy | 17 |
Hold | 3 |
Sell | 2 |
This predominantly positive analyst sentiment underscores the potential impact of the new order on HAL's future performance.
LCA Mk-1A: Advancing India's Air Defense
The LCA Mark1A is an upgraded version of the Tejas fighter jet, specifically designed to replace the aging fleet of MiG-21 aircraft in the Indian Air Force. This order not only strengthens India's air defense capabilities but also aligns with the government's push for self-reliance in defense manufacturing under the 'Make in India' initiative.
Future Prospects
With the confirmation of this large order and the hint of five additional major triggers on the horizon, HAL's future looks promising. These developments could significantly impact the company's order book and long-term growth trajectory. Investors and industry watchers will be keenly observing HAL's execution and delivery timelines, as well as any announcements regarding the anticipated triggers, which could play a crucial role in determining its stock performance and market position in the coming months.
Historical Stock Returns for Hindustan Aeronautics
1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
---|---|---|---|---|---|
-0.02% | -0.91% | -5.99% | +33.51% | -6.19% | +647.37% |