HAL Share Price Today: Analyzing Recent Declines and Long-Term Performance
Shares of state-run Hindustan Aeronautics Limited (HAL) saw a significant decline on Thursday, falling nearly 7% and extending their losses from Tuesday’s trading session. The stock had previously dropped over 3% amid broader selling trends in the defense sector ahead of the budget announcement.
On Thursday, HAL shares opened flat at Rs 5,325, compared to the previous close of Rs 5,329.40. The stock encountered further selling pressure post-negative start, hitting a low of Rs 4,975, down 6.65% from the opening price. Despite a rebound, HAL shares remain 4.6% lower at Rs 5,085, with an intraday low recorded at Rs 4,975 on Wednesday.
Valuation Concerns and Comparisons
A sales note from brokerage firm InCred, dated July 7, raises valuation concerns within the defense sector and specifically for HAL. The note compares HAL with its global peer, Dassault Aviation, highlighting significant differences in their financial metrics:
| Company | Revenue (Last Financial Year) | Profit (Last Financial Year) | Enterprise Value | Order Backlog | Growth Rate (Revenue/Earnings) |
|---|---|---|---|---|---|
| Dassault Aviation | $5.19 billion | $974 million | $6.7 billion | $41 billion | 24% / 12% |
| HAL | $3.67 billion | $921 million | $41 billion | $11 billion | 13% / 8% |
According to the brokerage’s note, Dassault Aviation is expected to experience a Compounded Annual Growth Rate (CAGR) of around 24% in revenue and 12% in earnings over the next two years. In contrast, HAL’s growth is projected at approximately 13% in revenue and 8% in earnings.
Analyst Ratings and Price Targets
Out of 16 analysts covering Hindustan Aeronautics, 14 have assigned a “buy” rating, while one each has given a “hold” and “sell” rating. Despite the recent declines, the consensus price target suggests a potential upside of 4% for HAL shares.
The stock hit a record high of Rs 5,675 on July 14 but has since corrected. At its current price, HAL shares are trading at a Price-to-Earnings (P/E) multiple of 38.26 times for the financial year 2026, well above the five-year average P/E multiple of 23.6 times.
Shareholding Trends
As per the June quarter shareholding data, the number of small shareholders (those with authorized share capital of less than Rs 2 lakh) in HAL has increased by 60% from March, rising to 10.8 lakh from 6.9 lakh. Conversely, India’s domestic mutual funds have reduced their stake in HAL to 5.8% from 6.75% in March, and the stake of Foreign Portfolio Investors (FPIs) has also decreased to 11.68% from 12.42%.
Performance Overview
Despite recent declines, HAL has delivered impressive gains over the past year. The stock has seen a 163% return to investors in one year, 470% in two years, and a remarkable 843% in three years. In 2024 alone, HAL shares have gained 80%.
HAL is a constituent of the BSE 100 index and has delivered a positive return of 38% in the last three months and 70% in six months.