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Motilal Oswal Report
Hindustan Aeronautics Ltd. remains a Buy for Motilal Oswal Financial Services after its june-quarter performance, with the brokerage raising its target price to Rs 5,800 from Rs 5,500, implying around 16% upside from the report’s stated market price of Rs 4,995.
The brokerage said HAL delivered a healthy quarter with profitability broadly in line and margins ahead of expectations.
Motilal Oswal maintained its FY27 and FY28 estimates and rolled forward its valuation to September 2028 earnings. The revised target is based on an average of discounted cash flow valuation and 30 times two-year forward earnings.
The brokerage highlighted that HAL has received seven GE F404 engines till date and targets to commence deliveries of Tejas Mk1A aircrafts soon, with the first jet targeted for Aug-Sep’26. The company has already ramped up its LCA manufacturing capacity to 24 aircrafts annually.
With supply chainrelated issues starting to ease out for GE, the brokerage expect Tejas deliveries to ramp up from FY28 onwards.
Beyond Tejas, execution of other platforms,such as LCH Prachand, ALFP31 engines, HTT-40, RD-33 engines, and 12 units of Su-30 aircraft, is also expected to ramp up and support topline growth.
Key risks and concerns
- slower-than-expected finalisation of large platform orders,
further delays in deliveries of key components, such as engines for the Tejas Mk1A, - delays in payments from the MoD, and
- higher involvement of the private sector.
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