Shares of Hindustan Aeronautics Ltd (HAL) soared over 7% in early trading on Tuesday, fueled by an impressive new order from the Ministry of Defence worth ₹62,700 crore. The public sector defense company experienced a surge, with its stock price climbing to ₹4,492.80 on the BSE as investors reacted positively to the announcement.

Major Contracts Secured for Light Combat Helicopters

On March 28, HAL disclosed that it had finalized two significant contracts with the Ministry of Defence for the supply of 156 Light Combat Helicopters (LCH), known as Prachand. The breakdown of these orders includes 90 helicopters for the Indian Army and 66 for the Indian Air Force, along with comprehensive training and related equipment.

• Total Value: ₹62,700 crore (excluding taxes)
• Delivery Schedule: Helicopter supplies are set to begin in the third year and will extend across the next five years.

In a separate regulatory update, HAL reported a provisional revenue of ₹30,400 crore for the financial year ending March 31, 2025, showing a slight increase from ₹30,381 crore in the previous year.

Overcoming Challenges in Production

Dr. D K Sunil, the Chairman and Managing Director of HAL, noted that this revenue achievement came despite challenges in delivering the Light Combat Aircraft (LCA) and Advanced Light Helicopter (ALH). He explained:

“The delivery of LCAs faced delays due to engine shortages, and the ALH schedule was impacted by an accident in January 2025, which led to a fleet grounding. However, we accelerated deliveries of other products and services, which helped maintain our top line.”

HAL’s order book has expanded significantly, reaching ₹1,84,000 crore, up from ₹94,129 crore at the beginning of the year. New manufacturing contracts acquired in 2024-25 amounted to ₹1,02,000 crore, while ROH contracts totaled ₹17,500 crore.

Goldman Sachs Takes a Stake

In related news, Goldman Sachs acquired a stake in HAL, purchasing shares valued at over ₹161 crore through open market transactions. The investment involved buying 3,85,774 shares at a price of ₹4,176.25 each, while Kadensa Capital, a Hong Kong-based asset management firm, divested the same number of shares at the same price.

Positive Market Outlook for HAL

According to a recent analysis from UBS, the awarding of the 156 Prachand helicopters order was an encouraging development for HAL. They noted:

“The initiation of engine deliveries by GE, combined with an expedited delivery schedule, should resolve execution issues. The recent acceleration in awarding the LCH contract alleviates concerns about a slowdown in defense spending.”

UBS maintains a ‘Buy’ rating on HAL shares and has increased its price target from ₹4,800 to ₹5,440, reflecting improved order visibility and profit and loss execution. The brokerage firm considers HAL a preferred choice in its broader industrial coverage.

Current Stock Performance

As of 9:20 AM, HAL’s shares were trading 5.82% higher at ₹4,419.00 on the BSE, indicating a strong market confidence in the company’s trajectory following the recent developments.

For investors looking to capitalize on opportunities in the defense sector, HAL appears to be a robust option, especially given its expanding order book and strategic government contracts.