Target: ₹5,795CMP: ₹5,015.50Hindustan Aeronautics (HAL) reported a healthy Q1-FY27 performance, with revenue growing about 14.4 per cent y-o-y, likely supported by improved execution, while EBITDA margin expanded 107 bps y-o-y to 27.7 per cent, aided by lower other expenses.HAL continues to strengthen its position in India’s defence and aerospace ecosystem, supported by robust order opportunities of about ₹90,000 crore over the next two years across ALH helicopters, Su-30 upgrades, Dornier aircraft and engine manufacturing programs. LCA Mk1A execution visibility is improving as GE engine supplies normalise, with management targeting production of around 24+ aircraft annually in the coming years.HAL plans cumulative investments of about ₹12,000 crore by 2030 towards capacity expansion, aero-engine infrastructure and next-generation platforms, supporting higher production rates and localisation.Overall, strong order visibility, improving LCA execution, capacity investments and rising indigenisation position HAL well for sustained long-term growth, with execution ramp-up and foreign OEM supply remaining key monitorables. We maintain ‘Buy’ rating valuing the stock at a PE of 36x Mar’28E (35x Mar’28E earlier) as improving GE F-404 engine availability should likely enable a ramp-up in LCA Mk1A deliveries, with HAL targeting higher production of 24+ aircraft annually. This results in a revised TP of ₹5,795 (₹5,423 earlier).Published on August 14, 2026