Analyst Ratings Favor Hindustan Aeronautics Ltd. Despite Recent Decline

Hindustan Aeronautics Shares Rise as CLSA Sees 38% Upside on Strong Order Pipeline​

Shares of Hindustan Aeronautics Ltd. opened higher on Wednesday, February 25, snapping a two day losing streak, as fresh brokerage optimism lifted investor sentiment around the defence major.

The stock was trading 0.80% higher at ₹3,984.10, even as it remains down 8% over the past month.

CLSA Maintains Outperform Rating With ₹5,436 Target​

Brokerage firm CLSA has reiterated its Outperform rating on Hindustan Aeronautics, setting a price target of ₹5,436 per share. The target implies a potential upside of 38% from Tuesday’s closing level.

In a detailed review of the company’s prospects, CLSA projected orders worth $33 billion over FY25 to FY30. This estimate stands despite HAL’s exclusion from India’s fifth generation fighter development program.

The brokerage noted that HAL has been excluded only from the AMCA 1.0 program and will remain eligible to bid at the mass production stage.

Helicopter Orders and Super Sukhoi Upgrade to Offset Impact​

CLSA believes that repeat helicopter orders and the recently approved Super Sukhoi upgrade program are likely to fully offset the impact of HAL’s exclusion from the AMCA 1.0 phase.

The company’s order backlog rose 88% year on year in FY25 and is expected to reach $28 billion by FY27. The recent government approval for a $3.6 billion helicopter order has further strengthened revenue visibility, with execution likely to begin as early as FY27.

According to the brokerage, HAL has the strongest order pipeline in the defence sector, providing nearly 14 years of revenue visibility. This makes it CLSA’s preferred defence pick.

Key Catalysts: Mk1A Deliveries and GE Engine Clarity​

CLSA identified multiple near term triggers for the stock, including:

• Start of Mk1A fighter jet deliveries in Q2 2026
• Clarity on GE engine supplies
• Progress on the GE 414 Make in India production agreement

Despite its leadership position in India’s defence manufacturing space, CLSA said HAL remains the cheapest pure play defence stock in the segment.

Analysts Remain Largely Positive​

Out of 25 analysts covering Hindustan Aeronautics, 21 have a Buy rating, one recommends Hold, and three have a Sell call.

Jyoti Gupta of Nirmal Bang said that although the stock has corrected nearly 30% from its recent peak, the medium term outlook remains constructive. She indicated that performance is expected to improve after a few quarters of stronger execution and suggested monitoring the next three quarters closely, with the second half of FY27 potentially emerging as a strong phase for the company.

With a robust order backlog, improving execution visibility, and multiple upcoming catalysts, Hindustan Aeronautics continues to attract attention in the defence sector despite recent stock price volatility.