HAL Shares Crash 8% Amid Speculation of Not Being Shortlisted for Manufacturing Fighter Jets

SYNOPSIS: HAL shares slipped after reports suggested it was excluded from AMCA fighter jet shortlisting, as L&T and other companies emerged as frontrunners, signalling a strategic shift toward private defence manufacturing.

During Wednesday’s trading session, shares of a state-run company manufacturing and providing repair & maintenance services for aircraft and helicopters slipped over 8 percent on the BSE. So, what triggered this sharp decline? Let’s break it down in this article.

With a market cap of Rs. 2.81 lakh crores, shares of Hindustan Aeronautics Limited are currently trading in the red at Rs. 4,204.05 on BSE, down by around 6 percent, compared to its previous closing price of Rs. 4,471.95. The stock has delivered positive returns of nearly 13 percent in the last one year, but has fallen by over 7 percent in the last one month.

News

As per the latest speculations, shares of Hindustan Aeronautics Limited (HAL) came under pressure during Wednesday’s trading session, after the company was reportedly not shortlisted for manufacturing India’s next-generation fighter jets. The development follows indications that other players have moved ahead in the selection process.

In what is being seen as a landmark shift in India’s defence manufacturing landscape, Tata Advanced Systems, Larsen & Toubro (in partnership with Bharat Electronics Limited), and Bharat Forge (along with BEML and Data Patterns) have reportedly emerged as the leading competitors for the Advanced Medium Combat Aircraft (AMCA) programme.

For decades, HAL has been the backbone of India’s military aircraft production, manufacturing platforms such as the Tejas and executing upgrades of legacy fighter fleets. However, the speculations around its exclusion at this stage are being viewed as a significant shift in the government’s growing emphasis on expanding private-sector participation in high-end defence projects.

The design authority for the AMCA, Aeronautical Development Agency (ADA), Bengaluru, had issued an Expression of Interest (EoI) inviting Indian companies to demonstrate capabilities across advanced avionics, stealth structures, systems integration, flight testing, certification and scalable production. After assessing submissions from 7 applicants, evaluation committees reportedly shortlisted 3 entities that are expected to receive the Request for Proposal (RFP) by April 2026, with a final selection likely later in the year.

The evaluation process focused on parameters including technical depth, manufacturing capabilities, financial strength and order book position. Further, companies were also required to demonstrate the ability to absorb complex aircraft designs and manage development, integration and testing at scale, while excessive existing order backlogs were seen as a limiting factor.

Under the current plan, the selected bidder will collaborate with ADA to develop 5 AMCA prototypes, with an indicative budget of about Rs. 15,000 crore allocated for this phase. If successfully developed and inducted into the Indian Air Force (IAF), the full-scale production programme is expected to be significantly larger in value.

HAL’s Clarification on Media Reports

Following the media report titled “HAL won’t build AMCA; competition between Tata, L&T and Kalyani now: Source”, Hindustan Aeronautics Limited issued a clarification through a regulatory filing. The company stated that it has not received any official communication from the Defence Research and Development Organisation (DRDO) regarding the shortlisting process. In the absence of formal confirmation, HAL said it is unable to comment on the reports currently circulating in the media.

Financials

HAL reported a marginal growth in its revenue from operations, showing a year-on-year increase of around 11 percent from Rs. 5,976 crores in Q2 FY25 to Rs. 6,629 crores in Q2 FY26.

Likewise, its net profit increased during the same period from Rs. 1,510 crores to Rs. 1,669 crores, representing a rise of nearly 11 percent YoY. As of May 2025, the company reported an order book of Rs. 1,89,300 crores, compared to Rs. 94,127 crores as of April 2024.

Hindustan Aeronautics Limited (HAL) is engaged in the business of design, development, manufacture, repair, overhaul, upgrade and servicing of a wide range of products, including aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures.

The company’s operations are organised into five complexes, namely the Bangalore Complex, MiG Complex, Helicopter Complex, Accessories Complex and Design Complex, which together include 21 production divisions and 11 research and design centres (R&D Centres) and 8 support offices located across India. 

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