Defence stock: HAL tanks 3% as Tejas jet crash triggers fleet-wide technical review

Shares of Hindustan Aeronautics Ltd fell 3 per cent in Monday’s trade after a Tejas Light Combat Aircraft was lost in an accident during a routine training mission, prompting a fleet-wide technical review. By 10.17 am, the stock had declined 3.04 per cent to a low of Rs 4,045.60 apiece. The scrip was already under pressure, falling 6 per cent in the past one month and 8 per cent year-to-date amid reports of HAL's exclusion from the AMCA programme.

The Tejas incident took place earlier this month at a key operational air base when the aircraft was on final approach after completing a training sortie, PTI reported. Initial assessments indicated a possible technical malfunction, with early signs pointing to a suspected failure in onboard systems during landing. 

Following this, the IAF grounded its entire fleet of approximately 30 single-seat Tejas jets to conduct comprehensive safety and technical inspections, as per PTI.

Analysts noted that slower execution rate due to supply-chain bottlenecks, particularly around GE F404 engine deliveries, tempered topline growth for HAL in the past. Mirae Asset Sharekhan in a note last week said HAL has received five F404 engines from GE and the defence PSU has successfully integrated it and is ready to be delivered to the IAF. Nine additional  airframes are built and awaiting engine installation, highlighting a direct constraint on HAL’s ability to meet its output targets, it noted.

"While GE has committed to a faster  delivery schedule, supplying 24 engines in FY2026-27 and scaling to 30 annually  thereafter, the initial progress has been slow. Consistency in the long run will be a major pivot for the supply of 212 aircrafts. We slash our FY26 estimates and as  order momentum and strong execution pick up, we expect aircraft deliveries to  drive growth," it said. 

The brokerage noted that HAL will be able to manufacture 24 LCAs in the coming years and targets to manufacture 30 taking help of private players from 2027-2028.