HAL Share Price: 41% upside or 21% downside? Brokerages split on Maharatna defence stock after AMCA exit

Shares of Hindustan Aeronautics Limited (HAL) are in focus after reports that the company has been excluded from the Advanced Medium Combat Aircraft (AMCA) programme. Brokerages have offered mixed views following the development. While JP Morgan has projected a potential 41 per cent upside from current levels, Morgan Stanley has flagged a possible 21 per cent downside.

Sources told Zee Business that the exclusion reflects a broader shift in India’s strategy to increase private sector participation in advanced fighter aircraft manufacturing.

According to industry sources, HAL did not meet the mandatory Expression of Interest (EoI) criteria set by the Defence Research and Development Organisation (DRDO) and the Aeronautical Development Agency (ADA). HAL has not issued an official statement and said it has not received any formal communication from DRDO regarding the matter.

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What is the AMCA Program?

The AMCA is India’s flagship indigenous fifth-generation stealth fighter jet program, aimed at the Air Force and Navy. The jet is being developed by DRDO’s Aeronautical Development Agency (ADA).

It is a twin-engine, single-seat, 25-tonne multirole aircraft with advanced stealth and deep-strike capabilities. The first flight is expected by 2029, with induction into service around 2035.

Out of the seven companies that applied for the program, three have cleared the next stage. These include Tata Advanced Systems, a consortium of Larsen & Toubro, Bharat Electronics and Dynamatic Technologies, and a consortium of Bharat Forge, BEML and Data Patterns. HAL’s lower score has been attributed to its heavily loaded order book, limiting its ability to take on new projects. The winning bidder will build five prototypes and one test aircraft.

HAL Q3 FY26 Results

Despite the setback in the AMCA program, HAL reported strong quarterly results. The company posted a 29.64 per cent rise in consolidated profit after tax (PAT) to Rs 1,866.68 crore in Q3 FY26, up from Rs 1,439.83 crore in the same period last year. Revenue from operations increased 10.65 per cent to Rs 7,698.8 crore, compared to Rs 6,957.31 crore a year ago.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose 11.2 per cent to Rs 1,871 crore, with an EBITDA margin of 24.30 per cent versus 24.18 per cent in Q3 FY25. HAL’s board also declared a first interim dividend of Rs 35 per share of Rs 5 each, fully paid. The record date is February 18, and the dividend will be paid by March 14.

HAL Share Price Target: Investment Opportunity or Risk Alert?

Brokerages have given mixed views on HAL following the news. JP Morgan maintained an “Overweight” rating with a target price of Rs 6,004, which is an upside of 41% from current levels. The brokerage said HAL’s exclusion from AMCA was largely expected due to a large order book, which is seven times its revenue, and delays in the delivery of LCA Tejas Mk1A aircraft. JP Morgan noted that HAL still has opportunities to win large defence orders outside the AMCA program.

On the other hand, Morgan Stanley downgraded HAL to “Underweight” from “Equalweight,” cutting the target price to Rs 3,355 from Rs 5,092, which is a downside of 21% from current levels. The brokerage cited downside risks from increased private sector competition and possible delays in execution due to high import dependence.

Elara Securities described HAL’s exclusion as “a pause, not a full stop,” retaining an “Accumulate” rating with a revised target price of Rs 4,480. The brokerage noted that the AMCA program would likely have no financial impact until at least 2033, as the prototype is planned by 2030, orders are placed by 2032, and delivery is by 2035.

HAL Order Book

HAL’s current order book of Rs 2,50,000 crore provides revenue visibility until FY32. Ongoing projects include Tejas Mk II, Su-30 upgrade, Dornier 228, TEDBF, CATS Warrior UCAV, and multiple helicopter programs. The company is also working on new initiatives in maintenance, repair, and overhaul (MRO) for Airbus, civil helicopters, and commercial aircraft.

Analysts said HAL’s exclusion from the AMCA program reflects the government’s effort to accelerate the fighter jet project by involving private companies and ensuring timely delivery. This ends HAL’s monopoly in the fighter aircraft segment but does not affect its existing operations and financial performance.

HAL Share Price History

HAL closed at Rs 4,247.60, up Rs 21.50 or 0.51 per cent. The stock has gained 1.72 per cent in one week but is down 4.26 per cent in one month and 3.59 per cent year-to-date.

Over the past year, HAL rose 21.99 per cent, while three-year and five-year gains stand at 221.31 per cent and 715.46 per cent, respectively. The company’s market capitalisation is Rs 2,83,560.60 crore. On the day, around 10.34 lakh shares were traded, with a traded value of Rs 440.27 crore.