Multibagger defence stock falls 14.5% in the last 4 trading sessions; Check recent updates inside!

Hindustan Aeronautics Limited (HAL) shares fell 14.5 per cent in the last 4 trading sessions. Hindustan Aeronautics Limited (HAL) has officially clarified the status of the LCA Mk1A program, confirming that five aircraft are fully ready for delivery with five GE engines already received. An additional nine aircraft have been built and flown, awaiting further engine shipments from GE to complete their final delivery preparations. While the supply outlook from GE is reportedly positive and aligned with current goals, HAL is actively coordinating with the Indian Air Force to expedite the handover process and meet its financial year guidance despite ongoing design and development adjustments.

The company faces a significant strategic hurdle due to a new Ministry of Defence evaluation framework that prioritises execution efficiency over order volume. This policy potentially disqualifies companies from certain mega-projects if their Order Book exceeds three times their annual revenue—a threshold HAL currently exceeds with a backlog nearly eight times its revenue. This shift marks a departure from the traditional Public Sector Undertaking (PSU) monopoly, as the government looks to diversify procurement by integrating private players like Tata Advanced Systems and Bharat Forge to ensure timely project execution.

Investors are currently recalibrating their expectations as the "monopoly premium" previously attached to HAL’s stock comes under pressure from both policy changes and post-Budget 2026 profit booking. Although the massive existing order book for the Tejas Mk1A and Prachand helicopters provides long-term revenue visibility, the structural transition toward a competitive landscape suggests a capped growth trajectory in the near term. HAL remains a foundational pillar of India’s defence infrastructure, but it must now navigate a more crowded market while aggressively working through its substantial backlog.

About the Company

Hindustan Aeronautics Ltd (HAL), a leading Indian defence company, excels in the design, manufacturing, repair and overhaul of aircraft and helicopters. Organised into three key segments—Manufacturing, Services and other activities—HAL boasts 20 production and overhaul divisions and nine R&D centres across India, prioritising indigenous programs like the HTT-40 Basic Trainer Aircraft and Light Utility Helicopter (LUH). Notably, HAL achieved the prestigious 'Maharatna' status on October 14, 2024, becoming the first Defence Public Sector Undertaking (PSU) to earn this distinction, signifying enhanced operational and financial autonomy.

The President of India’s portfolio owns the majority of the stake, i.e., 71.64 per cent as of December 2025 and DIIs increased their stake to 9.68 per cent in December 2025 compared to September 2025. The company has a market cap of over Rs 2.70 lakh crore and has maintained a healthy dividend payout of 31.4 per cent with a strong order book of Rs 1,89,300 crore. The stock gave multibagger returns of 250 per cent in 3 years and a whopping 700 per cent in 5 years.

Disclaimer: The article is for informational purposes only and not investment advice.