Hindustan Aeronautics Limited (HAL) continues to receive strong buy recommendations despite a 16% cut in its price target by UBS, which lowered it from INR 5,700 to INR 4,800. Even with this reduction, the stock still has a potential upside of nearly 40%. UBS believes the market is overly pessimistic about HAL and expects minimal impact on its earnings for FY26 and FY27, with stronger-than-expected order inflows likely.
The brokerage sees FY26 as a key year for defence orders, with HAL’s subsidiary, Hindustan Aeronautics Next-Gen Aerospace Ltd. (HNAL), expected to benefit the most. HNAL’s order book could triple by FY27, driving stable growth. HAL has already shown strong performance, reporting a 14% rise in net profit to INR 1,440 crore and a 15% increase in revenue to INR 6,957 crore for the December quarter, backed by solid demand from the defence ministry.
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