Hindustan Aeronautics Shares Plunge 4% for Third Straight Day Amid Weak Q4 Earnings Forecasts

Hindustan Aeronautics Shares Plummet 5% Amid Concerns Over Delayed Tejas Mk1A Deliveries

Shares of Hindustan Aeronautics (HAL) fell nearly 5% in Monday's trade, extending losses to over 11% in the last three sessions, as weaker-than-expected March quarter earnings and continued concerns over delayed Tejas Mk1A deliveries weighed on investor sentiment.

The stock dropped as much as 4.66% to Rs 4,181.60 on the National Stock Exchange (NSE) in early trade on Monday morning. Despite reporting a 5.5% year-on-year rise in net profit at Rs 4,196 crore for the March quarter, compared with Rs 3,977 crore in the year-ago period, investor concerns persisted.

Revenue from operations rose 1.7% to Rs 13,942 crore, while other income jumped 76.6% year-on-year to around Rs 1,151 crore, cushioning pressure on core margins. However, brokerages flagged operational weakness and execution concerns, citing a 9% revenue miss.

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Jefferies retained its 'Buy' call with a target price of Rs 6,300, but noted that March quarter EBITDA was 10% below estimates due to a 9% revenue miss. The brokerage also lowered its FY27-FY28 earnings estimates by 3-8%, citing weaker gross margins. However, it said the stock could see a recovery if Tejas Mk1A aircraft deliveries begin over the next three months.

UBS maintained its 'Sell' rating with a target price of Rs 3,200, highlighting that despite management's earlier guidance, no Tejas deliveries have materialised so far, raising concerns over execution and long-term growth visibility.

CLSA kept its 'Outperform' rating with a target price of Rs 5,265. It said HAL's earnings were supported by engine deliveries, helicopters, and treasury income, while pointing to the start of Mk1A deliveries and clarity on the GE Aerospace engine deal as key near-term triggers.

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Concerns around the Tejas programme have also been publicly flagged by Air Chief Marshal Amar Preet Singh. Speaking at a public event last year, Singh highlighted the challenges of meeting timelines for defence projects, saying, "So, once a timeline is given, not a single project that I can think of has been completed on time. So, this is something we must look at. Why should we promise something which cannot be achieved? While signing the contract itself, sometimes we are sure that it is not going to come up, but we just sign the contract."