Zero-debt company, Hindustan Aeronautics (HAL), which is the largest defence PSU player in India, has recorded as much as 10% jump in its stock price in 5 trading sessions. There is room for further buy in HAL stock on expectations of revenue gaining momentum in FY26-27, while order book continues to remain strong. Overall, HAL’s overall growth outlook is intact.

HAL Share Price:

After market hours of November 28, HAL share price closed at Rs 4467.95 apiece, with market cap of Rs 2,98,805.33 crore. YTD, the stock is up by 58%. However, in past five sessions, HAL shares made a strong jump of 10% or Rs 407.45 on BSE.

HAL Share Recommendations:

In its latest note, ICICI Direct stated that it believes HAL’s revenue growth would pick-up substantially from FY26E onwards, led by pick-up in execution in manufacturing segment. RoH (repair & overhaul) segment is already doing well and contributing majorly to the revenues at present and is expected to grow at 8-10% YoY annually. In Tejas Mk1A contract, where execution has been interrupted in FY25 due to delays in GE-404 engines delivery from GE, execution is set to improve significantly post the delivery of engines (expected from April/May of 2025).

Additionally, the brokerage also believes that execution in other key large manufacturing contracts on-hand (like aero engines for Mig-29 and Su-30 MKI aircraft upgradation) is expected to remain better led by the higher indigenisation level of these platforms. Order backlog is estimated to be at ~Rs 1.2 lakh crore (3.8x TTM revenue), providing healthy revenue growth visibility over FY25-27E.

On the order book, ICICI Direct cited that the company’s pipeline remains robust with Rs 1.5 lakh crore orders, which are expected to be placed with the company in the coming 1.5-3 years.

Moreover, there are a number of large-scale contracts (like AMCA, deck-based fighters for the Navy, multi-role helicopters etc) which will be placed with HAL in the next 4-5 years. Moreover, RoH contracts to the tune of ₹ 18000-20000 crore on an annual basis are expected to be placed with the company, considering the increasing need for repair & maintenance for existing and future platforms. This pipeline of orders gives longer-term visibility on the company’s revenue growth in the coming years.

On the valuation, ICICI Direct’s note said, “We believe that HAL is strongly placed to benefit from a pick-up in execution of existing strong order backlog and robust pipeline. We estimate revenue & PAT to grow at ~15% & ~19% CAGR respectively over FY25E-27E,” adding, “We recommend BUY on HAL with a target price of ₹ 4800 per share (based on 30x FY27E EPS).”

HAL Corporate Actions:

HAL has not announced any bonus shares so far. But the company has delivered as much as Rs 35 dividend per share in 12 months. HAL has a track record of paying up to 12 dividends since March 2019. Currently, it has a dividend yield of 0.78%.

Further, HAL’s stock split for the first time last year in September in the ratio of 1:2, where face value of Rs 10 was split to Rs 5.