CLSA cuts HAL share price target but still sees 40% upside

Shares of Hindustan Aeronautics Ltd. (HAL) are trading lower on Thursday, April 2, after brokerage firm CLSA reiterated its 'Outperform' rating on the stock, while trimming its price target to ₹5,175 from ₹5,436 earlier.

Still, the revised target implies a potential upside of over 40% from current levels.

CLSA said that HAL's strong order

backlog of ₹2.5 lakh crore, which provides revenue visibility of nearly 14 years based on its FY27 product revenue.

The brokerage expects order inflows of around $25 billion over FY27-30, driven by demand for helicopters, fighter jets and the Super Sukhoi programme.

Key catalysts include the start of Mk1A fighter deliveries in Q1FY27, improved visibility on GE engine supplies, and progress on the GE 414 MII production deal, CLSA said.

However, the brokerage has cut its FY26-28 EPS estimates by 3%-6%, factoring in potential delays in GE engine deliveries during FY27. Despite this, CLSA believes HAL remains the cheapest pure-play defence stock, given its strong positioning in the sector.

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Separately, HAL reported its provisional business update for FY26. The company posted revenue of ₹32,250 crore, marking a 4% year-on-year growth, which fell short of its earlier guidance of 8%-10%. It had reported revenue of ₹30,981 crore in the previous year.

HAL's order book stood at ₹2.54 lakh crore at the end of FY26, compared to ₹1.89 lakh crore a year ago, broadly in line with its guidance.

Of the 25 analysts covering the stock, 21 have a 'Buy' rating, one recommends 'Hold', and three have a 'Sell' rating.

Shares of HAL ended Wednesday's session 5.67% higher at ₹3,685. The stock is down 16% so far this year.

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