Hindustan Aeronautics Limited (HAL) has been on a strong upward trajectory, registering a 37% surge in March 2025, making it the best-performing stock on the Nifty PSE index. This is the best monthly return for HAL in the last five years, surpassing previous highs seen in November 2023 (30%) and May 2024 (26%). The last time HAL stock saw such gains was in June 2020, when it rose 39%.

HAL’s Strong Market Performance

HAL has now gained in nine of the last ten trading sessions, with an additional 2.5% jump on Friday, March 20, bringing its current trading price to ₹4,266. With this rally, HAL has completely erased all of its losses for the year and turned positive year-to-date.

Key Drivers Behind HAL’s Recent Surge

1. GE-404 Engine Deliveries and Tejas Mk 1A Production

A major concern for HAL was the two-year delay in the delivery of GE-404 engines, which power the LCA Tejas Mk 1A fighter jets. However, on March 20, HAL confirmed that GE Aerospace has delivered the first of 99 engines, with 12 more scheduled for 2025 and 20 annually thereafter. This has boosted investor confidence and contributed to the stock's surge.

Elara Capital projects that 10-11 Tejas Mk 1A jets will be delivered in FY26, generating potential revenues of ₹3,000-3,500 crore.

2. Morgan Stanley and JPMorgan’s Bullish Outlook

Global brokerage Morgan Stanley added HAL to its Asia Ex-Japan and Global Emerging Markets (EM) focus list earlier this week. It has set a bullish price target of ₹5,292, citing a $60 billion order pipeline opportunity over the next decade.

Similarly, JPMorgan reiterated its "overweight" rating on HAL, setting a target price of ₹4,958, emphasizing HAL’s near-monopoly status in India’s aerospace and defense sector.

3. Strong Buy Recommendations from Analysts

HAL enjoys strong support from market analysts, with 15 out of 16 analysts giving a "Buy" recommendation. Only one analyst has a "Sell" rating on the stock.

Here’s a look at major brokerage price targets for HAL:

With multiple analysts setting targets above ₹5,000, HAL’s growth potential remains strong, driven by defense orders and government spending on indigenous fighter jets.

HAL’s Long-Term Growth Prospects

• ₹60 billion order pipeline projected over the next decade.

• Government's push for defense manufacturing and "Atmanirbhar Bharat" (self-reliant India) policies.

• HAL's near-monopoly status in the domestic aerospace sector.

• Upcoming defense contracts for helicopters, fighter jets, and engine manufacturing.

Conclusion

HAL stock has delivered an impressive 37% return in March 2025, making it the best-performing stock on the Nifty PSE index. The resolution of the GE-404 engine delivery delays, strong brokerage upgrades, and a ₹60 billion order pipeline have fueled investor optimism. Analysts remain bullish on HAL, with multiple price targets exceeding ₹5,000.

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