April 1, 2025 – Hindustan Aeronautics Soars on Major Defence Deals
Hindustan Aeronautics Limited (HAL) saw its shares surge 6.16% in early trade on April 1, following the announcement that the Ministry of Defence (MoD) signed two major contracts worth ₹62,700 crore with the aerospace giant. The contracts involve the supply of 156 Light Combat Helicopters (LCH), Prachand, along with training and associated equipment for the Indian Air Force (IAF) and the Indian Army.
At 9:16 AM, HAL stock was trading at ₹4,433.05, up by ₹257.05 on the Bombay Stock Exchange (BSE). The stock had witnessed a 52-week high of ₹5,675 on July 9, 2024, and a 52-week low of ₹3,045.95 on March 3, 2025. Currently, HAL is trading 21.88% below its all-time high and 45.54% above its yearly low, indicating strong investor interest despite recent market volatility.
The market capitalization of HAL now stands at ₹2,96,471.30 crore, reflecting growing optimism around India’s expanding defense manufacturing capabilities and its self-reliance push under the ‘Make in India’ initiative.
Massive Defence Contracts Boost HAL’s Prospects
1) Two Major Helicopter Orders
The Ministry of Defence signed two contracts on March 28, 2025, for the supply of 156 Light Combat Helicopters (LCH), Prachand, which have been developed and manufactured by HAL.
The first contract involves the supply of 66 LCHs to the Indian Air Force (IAF).
The second contract covers the supply of 90 LCHs to the Indian Army.
The Light Combat Helicopter Prachand is a domestically developed attack helicopter designed for high-altitude warfare. It has already been inducted into India’s defense forces and is known for its stealth features, advanced weapons, and high maneuverability.
This contract is expected to significantly boost HAL’s production pipeline and revenue over the next few years. The order also aligns with the Indian government’s push to reduce dependence on foreign defense suppliers and strengthen indigenous military manufacturing.
2) Additional Deal for Air-to-Air Refueling Training
Apart from the LCH contracts, the Ministry of Defence also signed a separate agreement with Metrea Management for the wet leasing of one flight refueling aircraft. This deal will provide air-to-air refueling training for pilots in the Indian Air Force and Indian Navy, further enhancing India’s air combat capabilities.
Highlights from the Defence Contracts:
₹62,700 crore order for 156 Prachand Light Combat Helicopters.
66 LCHs allocated to the Indian Air Force, 90 LCHs to the Indian Army.
Wet leasing of one flight refueling aircraft to improve pilot training.
Stock Market Reaction and Analyst Upgrades
Foreign Research Firms See Long-Term Growth
Following the announcement of these contracts, global brokerage firm UBS maintained its ‘Buy’ rating on HAL and raised its target price to ₹5,440.
According to UBS, the LCH order was an unexpected but positive surprise. The firm also expects HAL’s earnings to be boosted further by the continued delivery of the LCA Tejas Mark 1A fighter jets over the next three years.
ICICI Securities Revises Rating and Target Price
Domestic brokerage ICICI Securities also upgraded HAL’s rating from ‘Add’ to ‘Buy’ in its March 26, 2025, report. The firm has revised its target price from ₹4,065 to ₹5,000, citing improving order inflows, strong execution capabilities, and future revenue visibility.
Current Stock Performance:
52-week high: ₹5,675 (July 9, 2024).
52-week low: ₹3,045.95 (March 3, 2025).
Current price: ₹4,433.05 (April 1, 2025).
Market cap: ₹2,96,471.30 crore.
UBS target price: ₹5,440.
ICICI Securities target price: ₹5,000.
Why HAL’s Growth Story Remains Strong
1) Rising Defense Budget and Government Support
India’s defense sector has been receiving record-high budget allocations as the country focuses on military modernization and domestic production. The Indian government has increased capital expenditure in the defense sector by 13% for FY25, ensuring a steady pipeline of orders for companies like HAL.
The ‘Make in India’ and ‘Atmanirbhar Bharat’ (Self-Reliant India) initiatives have also played a crucial role in HAL’s success. These policies encourage the production of defense equipment within the country, reducing reliance on foreign imports.
2) Strong Order Book and Expansion Plans
HAL currently has an order book of over ₹90,000 crore, with expectations that new orders, including LCA Tejas fighters and helicopters, will push this beyond ₹1 lakh crore in the near future.
Additionally, HAL is expanding its production facilities to meet growing demand. The company recently inaugurated a new LCA Tejas manufacturing line in Nashik, which will help accelerate production rates.
3) Global Defense Export Opportunities
HAL has also been actively pursuing defense export opportunities, with interest from multiple countries in its Tejas fighter jets, Dhruv helicopters, and LCH Prachand. The company is in advanced talks with Egypt, Malaysia, and Argentina for potential deals, which could further enhance its revenue streams.
Growth Factors for HAL:
Record defense budget and government support.
Massive order book exceeding ₹90,000 crore.
Expanding production capacity for Tejas and helicopters.
Growing global export opportunities.
