HAL shares rally after Cabinet clears Rs 62,000 crore Tejas fighter jet deal

Public sector defence major Hindustan Aeronautics Ltd’s (HAL) shares gained 1.82 per cent to touch Rs 4,533 on Wednesday in the early trade, followed reports that the company is poised to secure one of its largest orders from the government.

Shortly after the market opened, the shares surged 3.5 per cent to Rs 4,605, but the strong gains triggered a minor sell-off. The Cabinet Committee on Security has approved the acquisition of 97 Light Combat Aircraft (LCA) Mark1A fighter jets for approximately Rs 62,000 crore.

HAL has been developing an indigenous Tejas programme to replace India’s old MiG-21 fleet. The LCA Mk1A is an upgraded version of the Tejas, designed for improved combat capabilities and the new defence contract marks the second major order for the aircraft following HAL’s contract win in February 2021.

Hindustan Aeronautics Ltd shares rose by 26.60 points or 0.59 per cent over the past 5 days and has surged 8.72 per cent year to date.

In July, the shares saw a major rally after the Defence Acquisition Council (DAC) gave its nod to 10 major procurement deals worth Rs 1.05 lakh crore, all under the Buy (Indian–IDDM) category. Surface-to-air missiles, an Integrated Common Inventory Management System for the Tri-Services, an Electronic Warfare System, and armoured recovery vehicles are among the items that have received Acceptance of Necessity (AoN) approvals.

Global brokerage firm UBS has maintained a ‘neutral’ rating on the stock with a target price of Rs 4,900.

Even as the net profit of the defence company fell 3.7 percent year-on-year to Rs 1,383.8 crore, its revenue from operations rose 10.8 percent to Rs 4,819 crore in Q1 FY 26. EBITDA rose nearly 30 per cent to Rs 1,284 crore, with margins rising to 26.7 percent from 22.8 per cent a year earlier, contrary to expectations of a decline.

 

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[Ayush Rastogi]

What makes me worried are timeline of Tejas M1A:

1) In Sept 2025, Mig21 retirements .IAF is donw to Just 29 Squdrons. Sanctioned Stenght:42 Squadrons.( Defecit:13*16=208 fighters).
2)GE supply 24 Engines /year. HAL production rate(in news) :24 jets/year.(97/24==4 Years) are we achieving this?

Hope Tejas MK1A comes with Virupaksha AESA radar, Astra MK1A BVRAAM, flyby wire,R73 Short range AAM missile, Israle Spike Bombs

Squadron Strength 2029(Expected as per timelines)===>29(existing)+(97/16=6(Tejas MK1A))==35 Only( Exlcusing any IAF jets accidents,lapses in Maintenance/over hauling, political hurdles,Many IAF jets still of 3/3.5+ generation)

2-4 Squadrons Emergency purchase of SU57E/Rafales for stop gap solution now by 2025 end.

Squadron Strength 2029(After Emergency purchase)===>29(existing)+(97/16=6(Tejas MK1A))+2 Squadron(Su57E/Rafales)==37 ( Exlcusing any IAF jets accidents,lapses in Maintenance/over hauling, political hurdles)). Still gives little competitive edge over adversaries in Indian Skies.


3) Can we have one more Tejas MK1A jets order(97 jets per year) (Partially by GEF04/F414 and AMCA engine(Russia help in Kaveri engine)),

2033 Squadron Strenth===>
29(Current)+(97/16=6(Tejas MK1A))+(97/16=6(Tejas M1A,new order))+2Squadron (AMCA)+4 Squadron(Su57E/Rafales)-3 Squadrons retirement(Mirages,Mig29 etc)=40 (Alteast hope we achieve the number).

Meanhwile PLAAF has sanctioned strength of min(1400 Modern 4. 4++ generation jets currently.IAF is only 50 percent in jets+manpower+funds+missiles+ammunitions in comparion to PLAAF. Salute to Brave IAF pilots who are in service.