HAL share price targets: Defence maker a consensus ‘Buy’, but some see limited upside
HAL Q1 results: InCred Equities said HAL reported a beat on paper, not on operations as gross margin compression was offset by lower other opex and other income, flattering the headline result.
- Aug 13, 2026,
- Updated Aug 13, 2026 2:18 PM IST
Dalal Street analysts are neutral-to-positive on Hindustan Aeronautics Ltd (HAL) after the defence major reported a mixed set of June quarter results. While the stock is a consensus 'Buy', some analysts have turned cautious on the counter, citing unfavourable risk-reward after 17 per cent rally in the past six months.
InCred Equities said HAL reported a beat on paper, not on operations as gross margin compression was offset by higher other income and lower other opex, flattering the headline result.
It said HAL's earnings quality over FY22-26 has leaned heavily on other income, around 25-30 per cent of profit before tax (PBT), boosted by a favourable MRO mix and FY25's front-loaded large-ticket orders.
"That tailwind is turning around with capex ramping and product mix shifting - we see margins, other income and cash flow all rolling over, not to mention the current backlog of Rs 2.5 lakh crore being at a cyclical peak for next 2-3 years. Maintain HOLD on HAL (Target: Rs 4,550) as we believe higher product mix should trump margins going ahead while Rs 15,000 crore capex plan over 3-4 years shall weigh on cash accruals and working capital," InCred Equities said.
Anand Rathi said HAL shares trade at 35.9 times its estimated FY27 earnings per share of Rs 4,960, following a 35 per cent rally since April.
"While much of the re-rating is captured ahead of deliveries, improving execution support our positive view. Retain Buy; Mk-1A testing in September and delivery milestones are the key near-term catalysts," it said while suggesting a target of Rs 5,431 on the stock.
Nuvama has downgrade the stock to ‘HOLD’ as the stock has breahed its previous target while weaker-than-expected product-led execution limits further upside.
"We value the stock at 30 times FY28E EPS, factoring in 14 per cent/10 per cent revenue/EPS CAGR and 30 per cent EBITDA margins by FY28E, yielding an unchanged target of Rs 5,040. The stock currently trades at 33x/30x FY27E/28E EPS," Nuvama said.
Among brokerages that are positive on HAL, foreign brokerage Nomura said HAL beat its estimates on all fronts in Q1, adding that the visibility remains healthy, led by manufacturing book.
"Our earnings estimates remain largely unchanged; we expect a PAT CAGR of 19 per cent over FY26-29F. We roll forward our valuation to 30x (unchanged) September 2028 EPS of Rs 211, and raise our target price to Rs 6,314 (from Rs 6,040). HNAL is our top pick in the defence sector," Nomura said.
Dalal Street analysts are neutral-to-positive on Hindustan Aeronautics Ltd (HAL) after the defence major reported a mixed set of June quarter results. While the stock is a consensus 'Buy', some analysts have turned cautious on the counter, citing unfavourable risk-reward after 17 per cent rally in the past six months.
InCred Equities said HAL reported a beat on paper, not on operations as gross margin compression was offset by higher other income and lower other opex, flattering the headline result.
It said HAL's earnings quality over FY22-26 has leaned heavily on other income, around 25-30 per cent of profit before tax (PBT), boosted by a favourable MRO mix and FY25's front-loaded large-ticket orders.
"That tailwind is turning around with capex ramping and product mix shifting - we see margins, other income and cash flow all rolling over, not to mention the current backlog of Rs 2.5 lakh crore being at a cyclical peak for next 2-3 years. Maintain HOLD on HAL (Target: Rs 4,550) as we believe higher product mix should trump margins going ahead while Rs 15,000 crore capex plan over 3-4 years shall weigh on cash accruals and working capital," InCred Equities said.
Anand Rathi said HAL shares trade at 35.9 times its estimated FY27 earnings per share of Rs 4,960, following a 35 per cent rally since April.
"While much of the re-rating is captured ahead of deliveries, improving execution support our positive view. Retain Buy; Mk-1A testing in September and delivery milestones are the key near-term catalysts," it said while suggesting a target of Rs 5,431 on the stock.
Nuvama has downgrade the stock to ‘HOLD’ as the stock has breahed its previous target while weaker-than-expected product-led execution limits further upside.
"We value the stock at 30 times FY28E EPS, factoring in 14 per cent/10 per cent revenue/EPS CAGR and 30 per cent EBITDA margins by FY28E, yielding an unchanged target of Rs 5,040. The stock currently trades at 33x/30x FY27E/28E EPS," Nuvama said.
Among brokerages that are positive on HAL, foreign brokerage Nomura said HAL beat its estimates on all fronts in Q1, adding that the visibility remains healthy, led by manufacturing book.
"Our earnings estimates remain largely unchanged; we expect a PAT CAGR of 19 per cent over FY26-29F. We roll forward our valuation to 30x (unchanged) September 2028 EPS of Rs 211, and raise our target price to Rs 6,314 (from Rs 6,040). HNAL is our top pick in the defence sector," Nomura said.