HAL Shares in Focus After Sources Mention Govt Clears Rs 62,000 Cr Tejas Mark 1A Deal

On Wednesday, the HAL shares surged up by 3.42 percent, touching a day’s high price of Rs 4,605 on NSE after multiple news sources mentioned that the Government of India recently approved a Rs 62,000 crore contract for 97 additional Tejas Mark 1A fighter jets for the Indian Air Force. The announcement, formalised on August 19, 2025, demonstrates the Centre’s deepening commitment to indigenous defence manufacturing. This order is the largest single contract awarded under the Tejas programme after the 2021 order for 83 jets valued at around Rs 48,000 crore. With this initiative, the government aims to modernise the Air Force fleet and phase out the old MiG-21s, marking a strategic milestone in India’s “Make in India” push. However, the supply chain problem persists for HAL, which is crucial for timely execution.

HAL’s order momentum does not stop at Tejas. In the previous year, the company had sealed major contracts in recent months, notably for the supply of 240 AL-31FP engines powering the Sukhoi-30 fleet, worth around Rs 26,000 crore. Orders for 156 Light Combat Helicopters “Prachand” worth around Rs 62,700 crore and 12 Sukhoi-30MKI aircraft valued at Rs 13,454 crore underscore HAL’s ability to win repeat, large-scale contracts. HAL’s portfolio also includes critical upgrade projects for Jaguar and Hawk fleets, contributing to steady revenue through spares, maintenance, repair, and overhaul (MRO) activities.

The company reported an order backlog of about Rs 1,89,300 crore as of the end of FY25, and has since added new orders. If the new Tejas contract is approved, the pipeline is expected to cross Rs 2.5 lakh crore in FY26. 

For the first quarter of FY26, HAL reported steady operational resilience despite the usual Q1 seasonality that marks a slower topline. The company clocked revenue of Rs 4,819 crore, registering a 10.85 percent year-on-year increase, though sequentially lower as is typical for the business. Profit before tax increased 16.9 percent year-on-year to Rs 1,844 crore, while profit after tax stood at Rs 1,383.8 crore, slipping marginally by 3.7 percent from the previous year’s corresponding quarter. Earnings per share came in at Rs 20.69 for Q1FY26. Operational highlights indicate a blend of robust execution and cost controls, offsetting seasonal weakness and underscoring the business’s inherent strength and scale.

HAL’s management remains upbeat on the back of a full and growing order book and has laid out an investment roadmap. The company plans capital expenditure of Rs 14,000 to Rs 15,000 crore over the next five years for capacity expansion, primarily focused towards fighter jets, helicopters, trainers, and aero engines. The management has stated that improved infrastructure at Nasik and Bengaluru is expected to enable annual deliveries of at least 12 Tejas Mk1A jets once engine supplies in this year. Further, the leadership has highlighted an increased focus on indigenous R&D, supply chain consolidation, and broader internationalisation through exports and joint ventures.