Defence Giant HAL Soars! Massive INR 624B Tejas Order & GE Deal Spark BUY Rating – Next Multibagger?

Author

Abhay Singh | Whalesbook News Team

Detailed Coverage:

Hindustan Aeronautics Limited (HAL) has announced its financial results for the second quarter of fiscal year 2026 (2QFY26). The company's revenue and profit after tax (PAT) were in line with Motilal Oswal's estimates. While margins were slightly lower than anticipated, this was effectively offset by a robust performance in other income.

A major highlight for the quarter is the receipt of a significant follow-on order for 97 units of the Tejas Mk1A fighter aircraft, valued at an impressive INR 624 billion. Furthermore, HAL has finalized a critical contract with GE Aviation for the supply of engines required for this Tejas project. The company anticipates the commencement of Tejas Mk1A fighter jet deliveries, especially since the test flight was successfully conducted in October 2025.

Motilal Oswal maintains a positive outlook on HAL, reiterating its "BUY" rating and an unchanged target price of INR 5,800. This valuation is based on the average of discounted cash flow (DCF) and 32 times earnings projected for September 2027. The brokerage firm believes HAL possesses a strong order book that provides excellent visibility for future execution. Key factors expected to drive the stock's performance include the successful delivery of Tejas aircraft and the efficient execution of its manufacturing order book.

Impact: This news is highly positive for Hindustan Aeronautics Limited and the Indian defense sector. The substantial order value significantly boosts the company's order book, providing revenue visibility for years to come. The GE engine contract ensures crucial component supply. The reiteration of a "BUY" rating by Motilal Oswal suggests strong investor confidence and potential upside for the stock.

Rating: 9/10

Difficult Terms: * **2QFY26**: Second Quarter of the Financial Year 2026. Financial years often run from April to March in India. * **Revenue**: The total income generated from the sale of goods or services related to the company's primary operations. * **PAT (Profit After Tax)**: The profit remaining after all expenses, interest, and taxes have been deducted from the revenue. * **Margins**: The ratio of profit to revenue, indicating how efficiently a company converts sales into profit. * **Other Income**: Income generated from sources other than the company's primary business operations. * **Follow-on order**: An additional order placed for goods or services after an initial order has been fulfilled or is in progress. * **Tejas Mk1A**: An advanced version of the indigenously developed Indian light combat aircraft, Tejas. * **INR 624b (INR 624 billion)**: 624,000,000,000 Indian Rupees. * **Contract with GE**: An agreement with General Electric (GE) Aviation for the supply of engines. * **DCF (Discounted Cash Flow)**: A valuation method used to estimate the value of an investment based on its expected future cash flows. * **32x Sep’27E earnings**: This means the stock is valued at 32 times its estimated earnings for September 2027. 'E' denotes 'Estimated'. * **TP (Target Price)**: The price at which a stock analyst or broker believes the stock will trade in the future. * **Order book**: The total value of unfulfilled orders for goods or services that a company has secured. * **Execution**: The process of carrying out and completing contracts or orders.