BIG NEWS FOR HINDUSTAN AERONAUTICS INVESTORS: Analyst Issues BULLISH BUY Call with INR 5,570 Target!

Brokerage Reports

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Updated on 13 Nov 2025, 06:25 am

Choice Institutional Equities has maintained its BUY recommendation for Hindustan Aeronautics Limited, setting a target price of INR 5,570. This valuation is based on 35 times the estimated Earnings Per Share for FY27/28.

The brokerage firm noted that Hindustan Aeronautics Limited demonstrated a reasonably strong operational performance in the second quarter of FY26. Profitability, however, experienced some contraction, which was primarily attributed to increased provisioning expenses during the quarter.

Outlook and Impact: Choice Institutional Equities expresses confidence that Hindustan Aeronautics Limited is well-positioned for a stronger performance in the second half of FY26. The company is expected to see an acceleration in its topline driven by ongoing and new programs. Manufacturing facilities in Bengaluru and the new Nashik plant are ramping up production.

Hindustan Aeronautics Limited holds a substantial order backlog exceeding 7.1 times its FY25 revenue, ensuring revenue visibility for multiple years. A significant development is the easing of the key constraint related to the supply of General Electric F404 engines. Resumed deliveries and a new contract for an additional 113 F404-GE-IN20 engines are expected to substantially reduce execution risks for the company's revenue targets in FY27–FY28.

Investors, however, will need to closely monitor the delivery schedule for the Tejas Mk1A, which remains a crucial factor for the company's near-term performance.

Impact: This analyst report, with its strong BUY recommendation and substantial target price, is expected to significantly influence investor sentiment towards Hindustan Aeronautics Limited, potentially driving positive stock movement. It underscores the strength and growth potential of India's defense manufacturing sector, reinforcing investor confidence in public sector undertakings and defense stocks. The identified upside potential could attract both institutional and retail investors.

Rating: 8/10

Difficult Terms: * **Provisioning Expenses:** Funds set aside by a company to cover potential future losses or liabilities, which can reduce current reported profits. * **EBITDA Margin:** A profitability ratio measuring earnings before interest, taxes, depreciation, and amortization, relative to revenue. A contraction indicates lower operating profitability. * **Topline Acceleration:** A significant increase in a company's gross sales or revenue. * **Revenue Runway:** The projected period for which a company can generate revenue based on its existing orders and business pipeline. * **Execution Constraint:** A factor that impedes or limits a company's ability to efficiently perform its planned operations or deliver products/services. * **Overhang:** An uncertain factor or potential issue that may negatively affect a stock's price or performance. * **De-risks:** The process of reducing or eliminating the risk associated with a particular investment or business operation. * **Monitorable:** An aspect or factor that investors should actively track for developments that could impact the company.