HAL growth may pick up after execution improves: Nirmal Bang

Hindustan Aeronautics Limited (HAL) may have corrected nearly 30% from its recent peak, but the outlook remains positive, with improvement likely after a few quarters of stronger execution, according to Jyoti Gupta, Senior Research Analyst at Nirmal Bang Institutional Equities.“I would actually look at HAL for the next three quarters, how they perform,” she said, adding that “The second half of 2026-27 (FY27) will be extremely positive for HAL.”

On financials, she expects steady growth rather than a sharp rebound. For 2025-26 (FY26), the company could post 12–30% revenue growth supported by aircraft deliveries and engines, with margins broadly in line with 2024-25 (FY25). FY27 growth could be around 20% with stable profitability. In her view, the real variable is not order inflow but execution — delivery cadence, production throughput and margin stability over the next 12–18 months.
The recent concerns around the Tejas Light Combat Aircraft (LCA) fleet, after reports of grounding following an incident, should not be interpreted as a structural problem, she said. Gupta stated that precautionary groundings are routine in global aviation whenever an operational issue occurs. HAL has clarified that the episode was not a crash, but damage during landing, and a joint investigation with the Indian Air Force is ongoing.

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Until the inquiry establishes the cause, she cautioned against concluding the aircraft itself. It would be “premature to attribute the issue to structural weaknesses in the aircraft,” she said.She added that the Tejas programme’s broader trajectory remains intact. The platform has logged thousands of flying hours, achieved final operational clearance and continues induction into squadrons. Technical reviews at this stage are not unusual for relatively young fighter programmes.

Instead, she believes the bigger challenges lie in the industrial ecosystem — supply chains, delivery timelines and private sector participation in India’s aerospace manufacturing base. The episode should be seen as “a test of institutional robustness,” with focus on the speed of root-cause identification, transparency of findings and efficiency of corrective action.

A leadership change could also support the transition. The elevation of Ravi Kota, Director-Operations and widely seen as the “LCA man”, comes at a crucial time when HAL is scaling production, managing engine integration and advancing next-generation platforms.

For the entire interview, watch the accompanying video

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