Hindustan Aeronautics Ltd (HAL) shares rose by nearly 3% during Wednesday’s trading session after the defense giant announced a 3.7% year-on-year (YoY) decrease in its consolidated net profit for the quarter ending June 30, 2025. The company reported a net profit of ₹1,383.77 crore, down from ₹1,437.14 crore during the same quarter the previous year, despite experiencing healthy growth in operational revenue.
Revenue from operations grew by 10.8% YoY, reaching ₹4,819.01 crore, compared to ₹4,347.50 crore in Q1FY25, bolstered by improved project execution and demand. For the entire fiscal year ending March 2025, HAL reported a net worth of ₹34,985.17 crore.
When comparing to the previous quarter, net profit fell sharply by 65.2% from ₹4,347.50 crore, reflecting seasonal trends and variations in project delivery.
Total income for the quarter saw a 9.5% YoY increase, rising to ₹5,566.10 crore from ₹5,083.85 crore in the prior year. The decline in profit, despite the solid revenue growth, was linked to a significant sequential drop in net income, although operational performance remained strong.
HAL shares – Should you buy?
Nuvama Institutional Equities reported that Q1FY26 results exceeded expectations, supported by strong execution (10.8% YoY) which elevated OPM to 26.7%, surpassing the Street’s estimate of 23%.
The brokerage has maintained a ‘BUY’ recommendation, factoring in a revenue CAGR of approximately 21% from FY25 to FY28E, anticipating an improved product mix (around 62% in FY27E compared to about 23% in FY25), a capital expenditure of ₹150 billion over the next four to five years, and working capital buildup, resulting in an approximate 11% EPS CAGR. The target price remains unchanged at ₹6,000.
Motilal Oswal Financial Services expects a robust manufacturing order book to bolster its growth in execution. The brokerage continues to uphold its estimates and has updated its target price to ₹5,800, based on a blend of DCF and 32x projected earnings for September 2027. After peaking in the last quarter, the stock is now trading at appealing valuations of 31x and 27x P/E on projected earnings for FY26 and FY27, respectively. Growth drivers for HAL are surfacing from the deliveries of Tejas aircraft and the finalization of contracts for 97 Tejas-Mk1A units. The recommendation remains to BUY.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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