HAL shares jump 3% as brokerages predict up to Rs 6,000 target for stock despite 4% YoY dip in Q1 PAT

Shares of Hindustan Aeronautics Ltd (HAL) jumped 2.9% to their day’s high of Rs 4,535.80 on the BSE after brokerage firms said they see the stock rallying up to Rs 6,000 even as the state-run defence major reported a 3.7% year-on-year (YoY) decline in its consolidated net profit for the first quarter ended June 30, 2025.

The company posted a PAT o`f Rs 1,383.77 crore, down from Rs 1,437.14 crore in the same period last year, even as operational revenue saw healthy growth.

Revenue from operations rose 10.8% YoY to Rs 4,819.01 crore compared to Rs 4,347.50 crore in Q1FY25, supported by stronger execution and demand. For the full year ended March 2025, HAL’s net worth stood at Rs 34,985.17 crore.

On a quarter-on-quarter basis, the net profit witnessed a steep 65.2% drop from Rs 4,347.50 crore in the preceding quarter, reflecting seasonal and project delivery variations.

Total income for the quarter increased 9.5% YoY to Rs 5,566.10 crore from Rs 5,083.85 crore a year ago. The profit decline, despite double-digit revenue growth, was attributed to a steep sequential drop in net income, even as operational performance remained robust.

Here’s what analysts are saying:

Nuvama: Buy | Target price: Rs 6,000

Nuvama has maintained its Buy rating on Hindustan Aeronautics Ltd (HAL) with a target price of Rs 6,000, citing a strong start supported by a robust growth pipeline. The company’s order book stood at approximately Rs 1.84 trillion at the end of March 2025, which is 6.1 times its FY25 sales. HAL also has a pipeline of over Rs 4.6 trillion for the next 7–8 years. Revenue is expected to grow at a compound annual growth rate (CAGR) of around 21% over FY25–28, supported by a planned capital expenditure of Rs 15,000 crore over 4–5 years and additional working capital build-up. Earnings per share (EPS) are projected to grow at a CAGR of roughly 11% during the same period.

Motilal Oswal: Buy | Target price: Rs 5,800

Motilal Oswal Financial Services (MOSL) has maintained its Buy rating on Hindustan Aeronautics Ltd (HAL) and raised the target price to Rs 5,800 from Rs 5,750. The brokerage highlighted that engine supplies from GE for the Tejas Mk1A aircraft order are ramping up, with aircraft deliveries expected to accelerate in the coming quarters. Key growth drivers include the delivery of Tejas aircraft and the finalization of orders for 97 Tejas Mk1A units. Overall revenue is projected to grow at a compound annual growth rate (CAGR) of 24% over FY25–28. EBITDA margins are forecast at 29.8% in FY26, 28.6% in FY27, and 27.3% in FY28. Annual capital expenditure is planned at Rs 4,000 crore for FY26, Rs 5,000 crore for FY27, and Rs 6,000 crore for FY28. Profit after tax (PAT) is expected to grow at a CAGR of 17% over FY25–28, while RoE and RoCE are estimated at 22.2% and 22.6%, respectively, by FY28.

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