Hindustan Aeronautics Limited (HAL) is an Indian public sector aerospace and defence company. Headquartered in Bengaluru, it is involved in the designing, manufacturing and overhaul of combat aircraft, aircraft, helicopters, unmanned aerial vehicles, jets and turbine engines, avionics, and other hardware. Established in 1940, it is one of the oldest and largest aerospace and defence manufacturers in the world.
HAL builds major defence and aerospace products including the LCA Tejas fighter jet, Dhruv Advanced Light Helicopter, and licensed production of the Su-30MKI, alongside aerospace structures for space launch vehicles.
It recently announced it Quarter 1 FY 2026-27 (Q1FY27) results.
While for many companies, it makes sense to study the quarterly results in quarterly as well as YoY basis, HAL results analysis shall be done only on a YoY basis. The previous quarter was the last quarter of FY2025-26, and companies like HAL have multi-year defense contracts where delivery and billing can get concentrated towards the fiscal year end. Q1 for such capital extensive defense manufacturers can be weak due to the very structure of the business model, as April-June quarter marks a new financial year where contracts just start to execute and deliveries take time. This can be explained by the Change in Inventories figure in the quarterly results. Q4FY26 reflects Change in inventories to was Rs.-591462 Lakhs, whereas the annual Change in inventories for the entire 2025-26 stands at Rs.-1002959 Lakhs, i.e., almost 60 percent.
Coming to the figures reported this quarter, Operational Revenue grew by 14% from Rs.481901 Lakhs to Rs. 551517, whereas the Total Income saw a growth of 15.3%. However, EBITDA saw a growth 20%. This reflects cost discipline. EBITDA grew faster than Revenue, and Cost of materials saw a decline of 12%. The company has increased the Gratuity limit from Rs.20,00,000 to Rs.25,00,000 and thereby impacting the Employee Benefit expenses adversely. Impairment Loss saw a jump of 98%, although the figure is only Rs.446 Lakhs. This can be attributable to the damage held at the LCA TD store due to flood in Sept 2022. Although it is an assumption, details pertaining to Impairment loss has not been provided in this financial Statement.
Order book stood at Rs.254538 crore, record high. This looks promising reflecting a strong multi-year revenue visibility as it is almost 4.6 times the annual revenue of Fy26. The FY27 guidance by the management guided to 10-12% revenue growth, up from 7%in the previous financial year. Management has also guided for an EBITDA margin of 30–31% for FY27.
Consensus projections compiled from Zee Business Earnings Insights and market briefs via NDTV Profit Financial Analysis show that Revenue from operations is almost 6% higher than broker targets. Nomura highlighted that the quarterly performance for Q1FY27 was a comprehensive “beat on all fronts”. HDFC Securities raised the near time targets for HAL to Rs.5120 mainly based on accelerated LCA Tejas MK1A delivery volumes expected in the coming quarters. Motilal Oswal noted gross structural margins came in much stronger than initial models, retaining a ₹5,800 price target based on 23% revenue CAGR visibility through FY29
EPS saw a growth of 14.9% from 20.69 in Q1FY26 to 23.77 in Q1FY27.
Overall, the results are positive and FY27 looks promising.