HAL shares rally after Cabinet clears Rs 62,000 crore Tejas fighter jet deal

Mumbai:  Public sector defence major Hindustan Aeronautics Ltd’s (HAL) shares gained 1.82 per cent to touch Rs 4,533 on Wednesday in the early trade, followed reports that the company is poised to secure one of its largest orders from the government.

Shortly after the market opened, the shares surged 3.5 per cent to Rs 4,605, but the strong gains triggered a minor sell-off.

The Cabinet Committee on Security has approved the acquisition of 97 Light Combat Aircraft (LCA) Mark1A fighter jets for approximately Rs 62,000 crore.

HAL has been developing an indigenous Tejas programme to replace India’s old MiG-21 fleet. The LCA Mk1A is an upgraded version of the Tejas, designed for improved combat capabilities and the new defence contract marks the second major order for the aircraft following HAL’s contract win in February 2021.

Hindustan Aeronautics Ltd shares rose by 26.60 points or 0.59 per cent over the past 5 days and has surged 8.72 per cent year to date.

In July, the shares saw a major rally after the Defence Acquisition Council (DAC) gave its nod to 10 major procurement deals worth Rs 1.05 lakh crore, all under the Buy (Indian–IDDM) category. Surface-to-air missiles, an Integrated Common Inventory Management System for the Tri-Services, an Electronic Warfare System, and armoured recovery vehicles are among the items that have received Acceptance of Necessity (AoN) approvals.

Global brokerage firm UBS has maintained a ‘neutral’ rating on the stock with a target price of Rs 4,900.

Even as the net profit of the defence company fell 3.7 percent year-on-year to Rs 1,383.8 crore, its revenue from operations rose 10.8 percent to Rs 4,819 crore in Q1 FY 26. EBITDA rose nearly 30 per cent to Rs 1,284 crore, with margins rising to 26.7 percent from 22.8 per cent a year earlier, contrary to expectations of a decline.

–IANS