This report is an updated version of the report published on 17 April 2026 at 10:20 AM IST.

Hindustan Aeronautics Limited (NSE: HAL) 

is an India-based aerospace and defence company engaged in the design, development, manufacturing, repair, and overhaul of aircraft, helicopters, aero-engines, avionics, and aerospace systems. The company supplies defence platforms, civil aviation products, space components, and provides maintenance, repair, and overhaul (MRO) services to Indian armed forces and global customers. 

Recommendation Rationale – SELL at INR 4,398.30

• Financial Highlights: HAL reported a notable increase in employee benefit expenses, which rose to INR 1,66,616 lakh in Q3FY26 from INR 1,29,616 lakh in Q3FY25, reflecting a 28.54% YoY increase, primarily due to higher pension and gratuity liabilities following revisions in contribution ceilings and employee-related obligations. Cost of materials consumed also increased significantly to INR 4,52,705 lakh in Q3FY26 from INR 3,17,551 lakh in Q3FY25, marking a 42.56% YoY increase, indicating higher input consumption associated with strong production activity and ongoing project execution. Finance costs rose to INR 98 lakh in Q3FY26 from INR 8 lakh in Q3FY25, reflecting a sharp increase and suggesting marginally higher borrowing or financing-related expenses during the quarter.
• Trading Near the Resistance: HAL stock has surpassed its R2 level recommended on 01 April 2026. Therefore, share price can face resistance at the current levels.
• Overvalued Multiples: On a Trailing 12-months basis – key trading multiples (EV/EBITDA, P/E, Price/Cash Flow, and Price/Book) are higher than Industry Average of the Aerospace & Defence Sector.
• Market Risk: Operating in the defence aerospace and manufacturing industry, Hindustan Aeronautics Limited remains exposed to execution risks associated with large-scale defence contracts and long project cycles. Delays in order execution, cost overruns, and dependency on government approvals may affect revenue recognition timelines. Additionally, fluctuations in raw material costs, supply chain disruptions, and dependence on key defence programs could impact margins. Changes in defence procurement policies, indigenization requirements, and evolving geopolitical dynamics may influence order inflows, realizations, and overall profitability outlook.

HAL’s Daily Chart

Valuation Methodology: Price/Earnings Multiple Approach (FY March'27E) (Illustrative)

Stock might trade at a slight premium to its peers considering the YoY growth in revenue and profitability during Q3FY26, supported by steady order execution and sustained defence demand visibility. For conducting the valuation, the following peers included: Mazagon Dock Shipbuilders Limited (NSE: MAZDOCK), Garden Reach Shipbuilders & Engineers Limited (NSE: GRSE), and DCX Systems Limited (NSE: DCXINDIA) have been considered.

Given the continued requirement for significant capital expenditure toward capacity expansion, modernization of production facilities, and increasing employee-related liabilities, HAL’s near-term margin profile may remain sensitive. Additionally, earnings visibility remains exposed to execution timelines of large defence orders, provisioning adjustments, and policy-driven defence spending cycles. Considering the risks associated, the share price may face consolidation at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current price of INR 4,398.30 (as of 17 April 2026, at 09:16 AM IST).

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 17 April 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.