Goldman Sachs said HAL is set to hand over Light Combat Aircraft (LCA) Tejas Final Operational Clearance (FOC) twin-seater trainers and HTT-40 basic trainer aircraft to the Indian Air Force, along with Dhruv NG helicopters to Pawan Hans Limited (PHL).
According to the brokerage, the latest handovers across fighter and trainer aircraft as well as helicopters provide another indication that execution across HAL’s manufacturing portfolio is gaining momentum.
Goldman Sachs highlighted three key developments. First, deliveries are increasing across multiple platforms, covering fighter trainers, basic trainers and helicopters. Second, engine availability for the LCA Mk1A programme is improving, with General Electric (GE) recently delivering another three F404 engines.
The brokerage expects the easing of supply constraints and the movement of aircraft from production and testing into deliveries to shift investor focus towards execution and the conversion of HAL’s large order backlog into revenue.
Goldman Sachs also said the progress is in line with the government’s continued focus on indigenous design, development and manufacturing in the aerospace and defence sectors.
Citi has also maintained a ‘Buy’ rating on HAL, with a higher price target of ₹6,175 per share.
Citi said HAL’s handover of the final two LCA FOC trainers, three HTT-40 aircraft and four Dhruv NG helicopters demonstrates broader execution across fighter trainers, basic trainers and civil helicopters. The brokerage added that execution of the Dhruv NG programme appears to be progressing well and remains on schedule.On the LCA Mk1A programme, Citi noted that HAL management now expects to deliver 10 aircraft by March 2027, as final software modifications and testing continue.
Engine availability has also improved, with 10 F404 engines received so far and more expected, supporting management’s targeted delivery ramp, Citi said.
Overall, Citi expects progress across multiple aircraft platforms to provide greater visibility on HAL’s medium-term delivery ramp. Continued improvement in engine supplies and testing could also help reduce the remaining execution challenges around the LCA Mk1A programme.
Shares of HAL are up 1.24% at ₹4,854 in intraday trade. The stock is up 11% so far this year.