Should you BUY HAL shares despite 16% fall from 52-week high, Tejas delays and GE engine issues?

State-run aerospace and defence company Hindustan Aeronautics Limited (HAL) reported a steady financial performance for the fourth quarter of FY26, supported by strong execution in helicopters and engine programmes, stable margins and a robust order pipeline. However, delays in deliveries of the Tejas Mk1A fighter aircraft continued to remain a key concern for analysts.

HAL reported a net profit of Rs 4,196.04 crore in Q4 FY26, compared with Rs 3,976.63 crore in the same quarter last year. Revenue from operations rose to Rs 13,942.40 crore from Rs 13,699.85 crore in Q4 FY25.

The company posted EBITDA of Rs 5,057 crore during the quarter, resulting in an EBITDA margin of 36.28 per cent. Earnings per share (EPS) for the quarter stood at Rs 62.57.

Most brokerages maintained positive ratings on the stock, citing HAL’s strong order book, healthy cash position, long-term defence manufacturing opportunity and improving execution outlook.

However, analysts also highlighted that delays in Tejas Mk1A deliveries and supply chain issues related to GE engines remain near-term overhangs.

HAL Share Price Today

Shares of Hindustan Aeronautics Limited were trading at Rs 4,344.80 on May 18, 2026, down Rs 820.20 or nearly 15.9 per cent from their 52-week high of Rs 5,165 touched on May 16, 2025. The stock declined 0.94 per cent during the session, falling Rs 41.40 from the previous close.

Jefferies, JP Morgan, and Goldman Sachs Views

Jefferies maintained its “Buy” rating on HAL and raised the target price to Rs 6,300 from Rs 6,220 earlier. The revised target price implies an upside potential of around 45 per cent from the current market price of Rs 4,344.80.

The brokerage said the March quarter EBITDA was nearly 10 per cent below estimates due to a 9 per cent revenue miss. It also lowered its FY27 and FY28 earnings estimates by 3-8 per cent because of lower gross margins seen during the quarter.

Despite this, Jefferies believes the stock can move higher as execution improves, especially with expected deliveries of Tejas Mk1A aircraft over the next few months.

JP Morgan maintained its “Overweight” rating on HAL but reduced the target price to Rs 5,145 from Rs 6,004 earlier. The revised target price still indicates an upside of around 18 per cent from the current market price.

According to the brokerage, delays in LCA deliveries continue to remain an overhang on the stock. However, it said HAL’s FY27 guidance of double-digit growth and manufacturing-led expansion remains encouraging.

JP Morgan added that valuations remain attractive considering HAL’s large order book and strong return ratios.

Goldman Sachs maintained a “Neutral” rating on HAL and raised its target price to Rs 5,545 from Rs 5,225. The revised target suggests an upside of around 28 per cent from current levels.

The brokerage maintained a balanced outlook, acknowledging HAL’s healthy financial performance while also monitoring execution risks linked to aircraft deliveries.

CLSA Highlights Cash Position

CLSA maintained its “Accumulate” rating and increased the target price to Rs 5,265 from Rs 5,175. The target price implies an upside potential of around 21 per cent from the current market price.

CLSA said HAL’s profit after tax was ahead of expectations due to deliveries of engines, helicopters and treasury income, while margins remained stable.

The brokerage highlighted that HAL’s cash pile rose 21 per cent year-on-year to around USD 4.9 billion due to large advances and the company’s conservative accounting policy.

CLSA expects the start of Tejas Mk1A deliveries in the second quarter of FY27 and visibility on the GE engine production deal to act as major triggers for the stock.

The brokerage also described HAL as the cheapest pure-play defence stock despite its strong market position and leadership in India’s aerospace sector.

UBS Bearish Call on Defence PSU

UBS, however, maintained a bearish view on the company. The brokerage retained its “Sell” rating on HAL with a target price of Rs 3,200.

The target price indicates a downside of around 26 per cent from the current market price. UBS said HAL’s EBITDA beat during Q4 was largely driven by provisions, while execution and long-term growth challenges continue.

The brokerage noted that despite management optimism, no Tejas deliveries were made during FY26. UBS added that operating cash flow remained healthy at Rs 10,900 crore, supported by customer advances linked to Tejas orders.

The brokerage also highlighted that HAL incurred capital expenditure of around Rs 2,400 crore during FY26 and plans to spend nearly Rs 12,000 crore by FY30.

Motilal Oswal Bets On Execution Recovery

Domestic brokerage Motilal Oswal Financial Services reiterated its “Buy” rating on HAL with a target price of Rs 5,500. The target implies an upside potential of around 27 per cent from the current market price.

The brokerage said HAL’s Q4 results were ahead of estimates due to better margins and higher other income.

It noted that despite delays in Tejas Mk1A deliveries during FY26, the company scaled up execution across Advanced Light Helicopters (ALH), AL31-FP engines and RD-33 engines.

Motilal Oswal expects HAL’s manufacturing revenues to improve significantly as the company is simultaneously working on multiple platforms, including LCA Mk1A, Light Combat Helicopters (LCH), Sukhoi upgrades, HTT-40 trainer aircraft and Dornier aircraft.

The brokerage highlighted that HAL closed FY26 with an order book of Rs 2.5 lakh crore, compared with Rs 1.9 lakh crore at the beginning of the year.

HAL received fresh orders worth around Rs 97,000 crore during FY26, including the major contract for 97 LCA Tejas Mk1A aircraft for the Indian Air Force.

The company also indicated a strong future order pipeline of around Rs 90,000 crore over the next two years, including helicopter and aircraft upgrade programmes.

Tejas Deliveries And Future Growth Pipeline In Focus

According to management commentary, HAL expects Tejas Mk1A deliveries to begin between August and September 2026 after completion of ongoing refinements and testing activities.

The company has already received six GE-F404 engines and expects another 15-20 engines during FY27. Management expects around 20 Tejas aircraft deliveries during FY27 if engine supplies improve as planned.

More than 20 aircraft structures have already been built, with the main bottleneck currently linked to engine availability. HAL said global supply chain disruptions faced by GE are now gradually stabilising.

The company has guided for revenue growth of 10-12 per cent in FY27, supported by higher manufacturing revenues from Tejas Mk1A and HTT-40 deliveries.

HAL expects EBITDA margins to remain stable at 30-31 per cent. The company also plans capital expenditure of around Rs 12,000 crore by 2030 for Tejas Mk2, GE-414 engines, IMRH helicopters, SSLV production and aero-engine indigenisation.

Brokerages broadly believe HAL remains one of the strongest long-term plays in India’s defence manufacturing sector due to its dominant market position, rising indigenous defence spending and strong order pipeline.

However, analysts said the pace of Tejas deliveries and improvement in execution will remain the key factors that decide the stock’s near-term re-rating.