HAL shares rise over 3% as govt approves ₹62,000 cr deal for Tejas fighter jets

Shares of Hindustan Aeronautics Limited (HAL) gained over 3% on Wednesday, in an otherwise subdued broader market, after the government cleared a ₹62,000 crore deal for the procurement of Tejas fighter jets. The Union Cabinet, chaired by Prime Minister Narendra Modi, has reportedly approved the purchase of 97 LCA Mark 1A fighter jets from the state-owned defence company.

As per reports, this is the second major order for the Mark 1A variant, adding to a previous order of 83 aircraft (including 73 fighters and 10 trainers) valued at around ₹48,000 crore. The Mark 1A is an advanced version of the Tejas, incorporating upgraded avionics, radar systems, and enhanced combat capabilities compared to the earlier Tejas Mk1.

As of June 30, 2025, HAL's order book stood at over ₹1.89 lakh crore, which included significant contracts for the LCH "Prachand" and the Tejas Mk1A. The LCA Mark 1A fighter jets are part of India's indigenous defence programme, crucial for replacing the aging MiG-21 fleet that the Indian Air Force (IAF) plans to phase out by September 2025.

Post-Operation Sindoor, the IAF is focusing on quickly rebuilding its squadron strength. Given HAL’s long history, its involvement in designing and developing all upcoming indigenous platforms, coupled with policy tailwinds, augurs well for its growth prospects, domestic brokerage Anand Rathi said in a recent report.

HAL shares surge on fresh deal

Cheering the news, HAL shares jumped as much as 3.56% to ₹4,611.60 in the first hour of trade. The counter saw strong buying activity, with 1.12 lakh shares changing hands on the BSE compared to a two-week average of 80,000. The market capitalisation climbed to ₹3.03 lakh crore.

HAL shares touched their 52-week high of ₹5,166 on May 16, 2025, and a 52-week low of ₹3,045.95 on March 3, 2025. The PSU stock has corrected nearly 5% in a month, while it has risen 33% in the past six months. The defence heavyweight has added nearly 9% in calendar year 2025, though it has lost over 4% in the past year.

For the April-June quarter of the current fiscal, HAL posted a net profit of ₹1,377.15 crore, down 4.4% from ₹1,435.59 crore a year earlier. The decline was attributed to higher tax expenses despite improved sales.

Revenue from operations rose 11% year-on-year (YoY) to ₹4,819.14 crore, compared to ₹4,347.57 crore in the same quarter last year. On the operating front, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) jumped nearly 30% YoY to ₹1,284 crore, while margins improved to 26.7%, up from 22.8% in the year-ago period.

The board of the PSU defence company has recommended a final dividend of ₹15 per equity share (300%) for FY25, subject to shareholder approval. The record date for dividend eligibility has been set as August 21, 2025.

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