HAL Shares Soar Following Major GE Engine Agreement
Shares of Hindustan Aeronautics Limited (HAL) witnessed significant upward momentum on Monday, climbing over 3% after the defence major announced a crucial agreement with General Electric Company for aircraft engines. The PSU defence stock surged as much as 3.39% to reach ₹4,784.00 per share on the Bombay Stock Exchange, reflecting investor optimism about the company's growth prospects.
Details of the GE-HAL Engine Partnership
The state-run Maharatna defence company confirmed on Friday that it has entered into a strategic agreement with General Electric Company, USA for the supply of 113 units of F404-GE-IN20 engines along with comprehensive support packages. This partnership is specifically designed for the execution of the 97 LCA Mk1A programme, which represents a significant milestone in India's indigenous defence capabilities.
According to the regulatory filing submitted on November 7, engine deliveries are scheduled to commence from 2027 and continue through 2032. The company highlighted that the initial contract for 97 LCA Mk 1A aircraft was formally signed in September 2025, setting the stage for this crucial engine supply arrangement.
Robust Order Book and Financial Outlook
HAL's financial position appears exceptionally strong, with the company reporting an order book of ₹1.8 lakh crore at the end of FY25. This substantial pipeline provides remarkable revenue visibility equivalent to 6.2 times its trailing twelve-month (TTM) revenue, indicating sustained growth potential for the coming years.
The order book is expected to expand significantly to approximately ₹2.6 lakh crore upon finalization of the 97 Tejas Mk-1A contract, with the total size of this particular order estimated at around ₹67,000 crore. This expansion underscores HAL's dominant position in India's defence manufacturing landscape.
Analyst Perspectives and Market Sentiment
Defence analysts have responded positively to this development. Krishna Doshi, Defence Analyst at Ashika Institutional Equity Research, views this agreement as a transformative moment for HAL. "The deal is likely to improve confidence amongst investors, and may lead to earnings upgrade for the defence PSU. The outlook for HAL shares remains positive," Doshi commented, emphasizing that the partnership ensures faster execution without delays.
Antique Stock Broking reinforced this optimistic outlook, noting that the agreement with GE will guarantee supply chain consistency and timely execution of the additional 97 Tejas Mk-1A aircraft. This advancement will significantly assist the Indian Air Force in replacing the aging MIG-21 fleet and strengthening its operational capabilities.
The brokerage firm maintained its positive stance on HAL, citing the company's multi-year double-digit earnings growth potential and robust return ratio profile exceeding 20%. Antique Stock Broking has retained its 'BUY' rating on HAL shares with a target price of ₹6,360 per share, valuing the company at a price-to-earnings ratio of 40 times its estimated first-half FY28 earnings.
Historical Performance and Trading Activity
HAL's stock performance demonstrates remarkable resilience and growth over multiple timeframes. While the share price remained relatively flat over the past month, it has delivered impressive returns of 7.5% over three months and 15% on a year-to-date basis. The long-term performance is even more striking, with the PSU defence stock surging 132% over two years and delivering multibagger returns of 1,220% over five years.
During Monday's trading session, HAL shares maintained their upward trajectory, trading 3.20% higher at ₹4,775.00 per share at 1:00 PM on the BSE, indicating sustained investor confidence in the company's strategic direction and execution capabilities.
