HAL Shares May Turn Volatile After Tejas Fighter Jet Crash in Dubai, Say Analysts

HAL Shares May Face Volatility Next Week After Tejas Fighter Jet Crash in Dubai, Say Analysts

HAL shares may witness short-term volatility when markets reopen next week after a Tejas fighter jet, manufactured by Hindustan Aeronautics Limited (HAL), crashed during an aerial display at the Dubai Air Show on November 21. The tragic incident, which claimed the life of the Indian Air Force (IAF) pilot, has raised immediate concerns around sentiment and scrutiny, though analysts assert that the long-term story for HAL remains intact unless any structural flaw is identified.

HAL shares had already been under pressure on Friday, closing nearly 3 percent lower at ₹4,593, marking their third straight session of decline. The crash was reported post-market hours, meaning the next trading session will reflect the first market reaction to the news.

Tejas Crash in Dubai Raises Safety Concerns as Investigation Begins

The Tejas fighter jet crash occurred during an afternoon manoeuvre at the Dubai Air Show, where the single-seat Light Combat Aircraft (LCA) was performing in front of a large audience. Videos circulating online show the jet losing altitude rapidly before erupting into flames upon impact. Thick black smoke was seen rising from the crash site near Al Maktoum International Airport, with emergency services rushing to contain the fire.

In its official statement, the Indian Air Force confirmed the fatality:

“An IAF Tejas aircraft met with an accident during an aerial display at the Dubai Air Show today. The pilot sustained fatal injuries. A court of inquiry is being constituted to ascertain the cause of the accident.”

This is the second Tejas crash in less than two years. The earlier incident in March 2024 in Rajasthan’s Jaisalmer involved a Tejas jet returning from a tri-services exercise. Both incidents will now be closely reviewed as part of the broader investigation into HAL’s safety record.

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Tejas at a Glance: Indigenous Capabilities Under Spotlight

Tejas is India’s flagship indigenous 4.5-generation, single-engine, multirole combat aircraft developed by the Aeronautical Development Agency (ADA) and manufactured by HAL. Designed with a delta wing, the jet is a core part of India’s modernisation efforts and is central to HAL’s growing order book, exports pipeline, and strategic relevance.

Given its role, any incident involving Tejas tends to influence sentiment around HAL shares, even if long-term fundamentals remain unaffected.

Analysts Expect Short-Term Weakness in HAL Shares

Market experts believe HAL shares will likely open lower next week, driven by sentiment rather than fundamentals.

According to Abhinav Tiwari, Research Analyst at Bonanza, HAL shares have historically corrected following aircraft accidents.
He said:

“HAL shares declined after crashes in March 2024 and February 2019. We expect a weak opening on Monday. Sentiment may stabilise only if HAL confirms that no major technical issues exist.”

He added that a recovery is likely if the crash does not disrupt HAL’s future deliveries, export opportunities, or its mega order pipeline for Tejas aircraft.

Siddharth Maurya, Founder and Managing Director at Vibhavangal Anukulakara, echoed this view:

“The Tejas crash at the Dubai Air Show will bring immediate sentiment pressure and short-term volatility for HAL shares. However, isolated incidents rarely impact long-term valuations unless they uncover structural defects.”

Maurya emphasised that HAL continues to possess a strong defence order book, and investors should monitor delivery timelines and any technical clarity emerging from the ongoing inquiry.

Short-Term Reputational Risk Inevitable but Long-Term Story Intact

Harshal Dasani, Business Head at INVasset PMS, noted that investor concerns are understandable given the global visibility of the crash.

He said:

“When an indigenous fighter crashes on an international stage, questions arise around reliability, readiness for exports, and operational safety.”

Dasani pointed out that HAL is currently witnessing one of the strongest order inflow cycles in its history, including the recent approval to acquire 97 additional Tejas jets. The firm is also benefitting from the boom in defence manufacturing.

However, he cautioned that HAL shares trade at elevated valuations, with the market pricing in flawless execution.

“The crash does not change HAL’s long-term trajectory but introduces near-term reputational risk, especially when expectations are high.”

The next key factor will be the findings of the inquiry and how quickly HAL and the defence ministry communicate technical clarity to restore confidence.

HAL Share Price Performance: Strong Year-to-Date but Facing Cooling-Off Phase

HAL shares have corrected over 4 percent in the last five days and more than 5 percent over the past month. The stock is down 8 percent in the last six months, even though it remains up 10 percent in 2025 after defence stocks rallied sharply during Operation Sindoor—India’s targeted action against terrorist outfits in Pakistan and POK.

Despite the recent dip, HAL remains one of India’s best-performing defence stocks. After hitting a 52-week low of ₹3,046 in March, it surged nearly 70 percent in just two months to a 52-week high of ₹5,165 in May. Since then, HAL shares have cooled off by around 11 percent.

HAL’s current P/E ratio of over 38 also indicates that the stock is priced at a premium, making it more sensitive to negative news flow.

Outlook: Volatility Likely, but Structural Growth Drivers Remain Strong

While the Tejas crash is likely to weigh on HAL shares in the short run, most analysts maintain that the long-term prospects for HAL remain robust. Unless the inquiry reveals a structural flaw, HAL’s execution track record, order book visibility, and role in India’s defence ecosystem keep its growth trajectory intact.

For investors, experts recommend monitoring:

• Technical findings from the court of inquiry

• HAL’s communication on safety and design

• Impact on Tejas export negotiations

• Order book continuity and delivery schedules

In the absence of deeper concerns, analysts believe any correction in HAL shares may present a long-term buying opportunity rather than a structural setback.

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