Hindustan Aeronautics (HNAL IN) – Q1FY27 Result Update – Healthy Q1, LCA deliveries in focus – BUY
Published on 13 Aug 2026
HAL plans cumulative investments of ~Rs120bn by 2030 towards capacity expansion, aero-engine infrastructure and next-generation platforms, supporting higher production rates and localisation. The company is also targeting 65–75%+ indigenisation across major platforms, alongside greater automation, advanced manufacturing and R&D investments. Expanding export initiatives across Africa, Middle East and Southeast Asia provide additional avenues for diversification. Overall, strong order visibility, improving LCA execution, capacity investments and rising indigenisation position HAL well for sustained long-term growth, with execution ramp-up and foreign OEM supply remaining key monitorables. The stock is currently trading at a P/E of 35.1x/31.0x on FY27/28E earnings. We maintain ‘Buy’ rating valuing the stock at a PE of 36x Mar’28E (35x Mar’28E earlier) as improving GE F-404 engine availability should likely enable a ramp-up in LCA Mk1A deliveries, with HAL targeting higher production of 24+ aircraft annually. This results in a revised TP of Rs5,795 (Rs5,423 earlier).
