HAL Secures ₹62,777 Crore Defence Deal

State-run Hindustan Aeronautics Ltd. (HAL) has been making headlines with its strong financial performance and a massive new defence contract. The company reported a provisional revenue of over ₹30,400 crore for FY25, slightly surpassing last year’s numbers despite facing challenges in delivering Light Combat Aircraft (LCA) and Advanced Light Helicopters (ALH). Supply chain disruptions, including a shortage of LCA engines and an ALH accident in early 2025, affected production. However, HAL accelerated deliveries of other products and services, helping it maintain its revenue momentum.

The company’s order book at the end of the financial year stood at a staggering ₹1.84 lakh crore. In a major boost, HAL recently signed its largest-ever contract with the Defence Ministry, securing an order worth ₹62,777 crore for 156 Light Combat Helicopters (LCH) Prachand. This deal alone adds 53% to its order book.

Global brokerage firms have responded positively to HAL’s performance and order wins. UBS upgraded its price target to ₹5,440 per share, projecting a 30% upside from Friday’s closing price. The firm highlighted that the new contract came as a surprise and significantly strengthens HAL’s growth outlook over the next few years. The delivery of the LCA Mark 1A Tejas is also expected to be a key driver of HAL’s profitability.

CLSA, another leading brokerage, has an 'Outperform' rating on HAL, with a price target of ₹4,662. It emphasized that the Modi government's focus on ‘Defence Make in India’ (DMII) is driving HAL’s expansion. With 65% indigenous content in the LCH Prachand, the deal also strengthens India’s domestic defence manufacturing capabilities. Meanwhile, JP Morgan has set a target of ₹4,958 per share, stating that while the order had been anticipated, its finalization confirms HAL’s strong future prospects.

In the first nine months of FY25, HAL secured orders worth ₹56,000 crore. With this latest contract, its total estimated order inflow for the year exceeds ₹1.2 lakh crore, taking its projected order book to ₹1.9 lakh crore. The company maintains a book-to-bill ratio of around 5x, showcasing its strong backlog of orders.

HAL’s stock has been on a remarkable rally, surging 35% in March - the highest monthly gain in five years. Analysts remain overwhelmingly bullish, with 15 out of 16 having a ‘Buy’ rating on the stock.