Hindustan Aeronautics Ltd (HAL), a state-owned defense giant, has delivered one of the most remarkable stock performances in recent years. An investment of just ₹1 lakh in HAL five years ago would now be worth over ₹18 lakh, thanks to a staggering 1789% gain. Now, global brokerage firm Jefferies has released a bullish report, predicting that HAL could still offer up to 50% more upside. This has sparked a major question among investors: is HAL still a golden opportunity?
HAL, under the Indian Ministry of Defence, is a key player in the defense sector. It manufactures fighter jets, helicopters, and a wide range of aeronautical equipment. With the Indian government pushing forward the Make in India initiative, particularly in defense, HAL is well-positioned to benefit from rising domestic orders. Jefferies believes that HAL’s dominant market presence, coupled with a strong order pipeline and execution capabilities, will continue to drive its growth.
According to Jefferies, HAL saw a 28% year-on-year increase in new orders for the financial year 2025. This figure is not just impressive but extraordinary—it's over 214% higher than the orders received in the previous year. Revenue-wise, HAL has maintained strong momentum, consistently posting double-digit growth rates, while its profit margins have also improved substantially. All this signals a solid financial foundation and sustainable growth potential.
Jefferies has outlined three scenarios for HAL’s stock price. In the base case, where things remain stable and on track, the stock could rise to ₹6,475, which would be a 30% increase from current levels. In the bull case, if India’s defense spending continues to rise and Make in India progresses aggressively, the stock might soar to ₹7,500, implying around 50% returns. However, Jefferies also considered a bear case scenario. If the government cuts defense budgets or new orders slow down, the stock could fall to ₹3,750.
As of the most recent market close on Friday, HAL's share price stood at ₹4,982, down 1.77% from the previous trading session. Despite the minor weekly dip, the stock has returned over 20% in 2025 so far. Bloomberg data shows that out of 20 experts tracking HAL, 15 have recommended buying the stock, three suggest holding it, and only two have issued a sell rating. The majority clearly supports the bullish outlook.
Given HAL’s consistent performance, strategic importance, and favorable outlook, it could be a strong candidate for long-term investors, particularly those interested in India’s defense sector. However, investors should remember that HAL is a government-owned company, and its fortunes are closely tied to government policies. Any changes in defense allocation or policy direction could directly impact its business.
Therefore, while Jefferies' report offers a promising outlook, it is important to seek advice from a certified financial advisor before making any investment. The report reflects expert opinions and estimates, not guaranteed outcomes. Investors must evaluate their own risk appetite and financial goals before taking a position in HAL.
Disclaimer: This article is based on Jefferies’ report and publicly available data. It does not constitute investment advice. Please consult a registered financial advisor before making investment decisions.
