Global brokerage UBS has raised the HAL share target price to Rs 5,440, expecting a strong upside in the stock. The new target reflects a 30% potential gain from the last closing price of Rs 4,179.90. UBS upgraded its valuation after Hindustan Aeronautics Limited (HAL) secured a Rs 62,700 crore order from the Defence Ministry for 156 Prachand Light Combat Helicopters (LCH).
After the announcement of the mega order, HAL’s share price opened at Rs 4,400 and quickly rose to Rs 4,425 during early trade. However, the stock also saw some volatility, hitting an intraday low of Rs 4,310. The previous closing price before the order was Rs 4,177, reflecting the strong impact of this major development on market sentiment. As of 9:17 AM on April 1, 2025, HAL shares are trading 5.32% higher, indicating strong investor interest.
Overview of Contents
HAL’s Mega Defence Order: A Game Changer
Hindustan Aeronautics Limited (HAL) received a Rs 62,700 crore order from the Defence Ministry to manufacture 156 Prachand Light Combat Helicopters (LCH). The order was finalized much earlier than expected, boosting investor confidence. UBS had earlier estimated the order to be around Rs 45,000 crore and expected it in Q1FY26, but the quicker approval and higher value led to the revised target price.
UBS Raises HAL’s Valuation
UBS increased HAL’s price-to-earnings (P/E) ratio from 32x to 35x, maintaining a 10% discount to Bharat Electronics Limited (BHE). The brokerage sees HAL as a top pick in the industrial sector due to strong order inflows and execution capabilities.
Impact of the Order on HAL’s Growth
The execution of this mega order will start in the third year and take about five years to complete. HAL has an annual production capacity of 30 LCH helicopters, meaning revenue from this deal will reflect in its earnings from FY28 onwards. Additionally, the LCH Prachand will have 65% indigenous content, strengthening India’s defence manufacturing industry.
Other Brokerage Ratings on HAL
- CLSA: ‘Outperform’ rating with a target price of Rs 4,662, citing a strong order book.
- JP Morgan: ‘Overweight’ rating with a target price of Rs 4,958, highlighting HAL’s pipeline and valuations.
HAL’s Market Performance & Dividend
HAL’s share price jumped 35% in March, making it the best-performing stock in the Nifty PSE index. Over the past year, HAL has gained 25.51%, with five-year returns of 1,490.86%. Recently, the company also declared a dividend of Rs 25 per share, continuing its investor-friendly approach.
Conclusion
With UBS increasing the HAL share target price, investors are optimistic about HAL’s future. The company’s strong order book, growing demand for defence equipment, and government support make it a top investment choice in the aerospace sector. HAL’s growth story is just beginning, and experts predict further upside in the stock price.