HAL

’s Growth Stalls on GE Engine Delays

has faced a slowdown in FY26, with revenue rising marginally to ₹32,250 crore from ₹30,981 crore a year earlier. The company’s growth was constrained by delays in engine supplies from General Electric (GE) for its Light Combat Aircraft (LCA) Tejas Mk1A and Hindustan Turbo Trainer‑40 (HTT‑40). Despite these setbacks, HAL’s long-term prospects remain strong, supported by a record order book and steady demand for aircraft and helicopters. Operational Performance FY26 revenue was 7% below Nomura’s estimate of ₹34,580 crore. No LCA Mk1A deliveries occurred in FY26 due to supply-chain disruptions. GE Aerospace delivered the sixth F404‑IN20 engine on 2 April; HAL has levied liquidated damages for delays. GE engines account for 18–20% of LCA cost, making HAL heavily dependent on timely supplies. Analysts expect revenue growth of 7% in FY26, 5% in FY27, and 1% in FY28 (Anand Rathi Institutional Equities). Order Book & Pipeline Order book surged to ₹2.54 trillion as of 31 March, up from ₹1.89 trillion a year earlier. Key orders: LCA Mk1A aircraft worth ₹65,000 crore. 156 light utility helicopters worth ₹18,000 crore. Eight Dornier aircraft worth ₹2,186 crore. Outstanding manufacturing orders provide 7–8 years of revenue visibility. Repair, overhaul, and spares segments remain robust. Market & Valuation Stock down 11% YTD, underperforming the Nifty India Defence Index (+4%). Trades at 18.5x FY28E earnings, below its five-year average forward P/E of 26x. Analysts see 40–50% upside over the next 2–3 years as supply issues ease. Sentiment remains positive: 20 brokerages rate HAL a ‘buy’, one ‘hold’, and three ‘sell’ (Bloomberg data). Conclusion While GE engine delays have stalled near-term growth, HAL’s massive order book and strong government pipeline underpin long-term stability. For investors with a multi-year horizon, the stock offers attractive valuations and re-rating potential once execution normalizes.