Hindustan Aeronautics Limited

Industrials — Aerospace & Defense · NSE

₹4,989.00+₹79.00 (+1.61%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

No individual risk factor stands out on this snapshot.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

The 60-second version of Hindustan Aeronautics Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Hindustan Aeronautics Limited engages in the design, development, manufacture, repair, overhaul, upgrade, and servicing of aircraft, helicopters, aero-engines, avionics, accessories, and aerospace structures in India and internationally.

IndustryAerospace & Defense

SectorIndustrials

Employees35,566

Annual revenue₹31,792 Cr

How does it make money?

Turns over ₹31,792 Cr a year. Of every ₹100 of sales, about ₹29 reaches shareholders as profit, with ₹43 left at the operating level before interest, tax and depreciation. Each of its 35,566 employees supports ₹89.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹89.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 13.8% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.2%

What is the outlook?

14 analysts covering the stock expect revenue to grow about 21.1% and earnings to grow about 15.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+21.1%

Est. earnings growth+15.6%

Analysts14

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +21% while net margin moved +30% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+21%

Margin effect+30%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 35.8x already prices in growth
• P/E is close to its own historical median of 36.6x
✗ P/B of 8.13x is a steep premium to book

Quality vs. Valuation

Company Quality

75/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

52/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

35.8x

3Y Median

36.6x

40 monthly readings · mean 36.8x · range 20.9x–60.4x

Sector Median

88.8x

median of 3 sector peers

🟡Currently trading close to its 3y median of 36.6x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 60% below the peer median of 88.8x.

vs. its own history

Fair

36.6x median over 40 months · -2%

vs. sector peers

Cheap

88.8x median of 3 peers · -60%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

24.3x

PEG

2.23

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 36.4% to 42.8% over 3 years.
Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 18.1% to 13.8% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 314% over 3 years, from ₹3 Cr to ₹11 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 154% against revenue up 21% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 36.4% to 42.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 60% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹8,357 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 6.4% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 41%✓ 42.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 5% a year✓ 6.4% CAGR
Latest reported year was 14.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹8,357 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 13.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✗ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 3 neutral · 1 weak

Market Cap

₹3.34 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

35.8x

Fair

Fairly valued against the generic band

P/B Ratio

8.13x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹139.38

Profitable

Profitable on a per-share basis

ROE

22.2%

Strong

Strong capital efficiency

ROCE

13.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

14.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

14.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.90%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹8,357 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

28.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

15.7%

Good

Healthy core-business profitability

Net Margin

27.6%

Good

Strong bottom-line conversion

Current Ratio

2.61

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.49

Defensive

Steadier than the market

52W Range Position

90%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

4770.0 / 4851.4

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

57.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹26,361 Cr	₹28,162 Cr	₹30,105 Cr	₹31,792 Cr	+6.4%
EBITDA	₹9,600 Cr	₹11,703 Cr	₹12,329 Cr	₹13,603 Cr	+12.3%
EBITDA Margin	36.4%	41.6%	41.0%	42.8%	—
PAT (Net Profit)	₹5,828 Cr	₹7,621 Cr	₹8,364 Cr	₹9,116 Cr	+16.1%
EPS	₹87.14	₹113.95	₹125.07	₹136.3	+16.1%
ROE	24.7%	26.2%	23.9%	22.2%	—
ROCE	18.1%	24.6%	17.5%	13.8%	—
Total Debt	₹3 Cr	₹1 Cr	₹1 Cr	₹11 Cr	+60.6%
Free Cash Flow	₹7,049 Cr	₹6,468 Cr	₹11,887 Cr	₹8,357 Cr	+5.8%

🟢 Revenue has grown at 6.4% a year over 3 years.

🟢 EBITDA has grown at 12.3% a year over 3 years.

🟢 EBITDA Margin has risen from 36.4% to 42.8% over 3 years (+6.4 pts).

🟢 PAT (Net Profit) has grown at 16.1% a year over 3 years.

🟢 EPS has grown at 16.1% a year over 3 years.

🔴 ROE has fallen from 24.7% to 22.2% over 3 years (-2.5 pts).

🔴 ROCE has fallen from 18.1% to 13.8% over 3 years (-4.3 pts).

🔴 Total Debt has grown at 60.6% a year over 3 years.

🟢 Free Cash Flow has grown at 5.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1.32 L Cr

Total Liabilities

₹91,370 Cr

Cash & Equivalents

₹3,768 Cr

Operating Cash Flow

₹10,906 Cr

Capex

-₹2,549 Cr

Shareholding (proxy)

Institutional Holding

16.3%

Insider Holding

71.6%

Corporate Actions

Next Earnings

11 Nov 2026

Dividend Rate

₹45

Ex-Dividend Date

14 Aug 2026

Analyst Consensus

Recommendations

23 Buy · 1 Hold · 3 Sell

Target Price (Mean)

₹5,582.41

+11.9% vs CMP

Target Range

₹3,200 – ₹6,800

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

4 mixed2 general

Hindustan Aeronautics share price rises 3% on heavy volume; here's why

Business Standard, 06 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Hindustan Aeronautics Limited Stock 12‑Month Price Target Raised to INR 5672.8, Implies 22% Upside

TradingView, 09 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Hindustan Aeronautics Limited (HAL) Share Price Forecast: 7-Year Backlog, Tejas Risk, Aug 7 Earnings

TradingKey, 21 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Hindustan Aeronautics Stock Leads 3 Indian Shares Backed By Defense And Housing Demand

Simply Wall Street, 03 Aug

HAL Share Price: Citi sees 22% upside, says private sector concerns may be overdone - CNBC TV18

LinkedIn, 09 Sept

Why Hindustan Aeronautics (HAL) Share Price Jumped Over 5% Today?

Equitymaster, 06 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Risk

WeakValuation

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 3 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑