HAL shares jump 4% as DAC clears helicopter procurement, CLSA bullish; check target price, upside

New business data points to the fact that Hindustan Aeronautics Ltd (HAL) shares jumped as much as 4 percent on Tuesday, extending morning upside, after the Defence Acquisition Council (DAC) approved procurement proposals worth around Rs 1.1 lakh crore, including Advanced Light Helicopters (ALHs). Brokerage CLSA reiterated its positive view on the defence PSU.

HAL shares rose to Rs 5,049.5, up 4 percent from the previous close of Rs 4,855.2. The stock has now advanced around 15 percent so far in 2026, compared with a 9 percent slide in the Nifty 50. HAL's market capitalisation stood at over Rs 3.37 lakh crore.

The DAC, chaired by Defence Minister Rajnath Singh, on Monday accorded Acceptance of Necessity (AoN) to acquisition proposals worth an estimated Rs 1.1 lakh crore across the Army, Navy and Air Force. Around 98 percent of the proposed procurement has been earmarked for Indian industry, providing a potentially sizeable opportunity for domestic defence manufacturers.

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Among the proposals, the DAC approved procurement of Advanced Light Helicopters for the Indian Army. The helicopters are intended to undertake complex missions across different terrains and operational conditions.

CLSA maintained an 'outperform' rating on HAL with a target price of Rs 5,481 per share, implying around 13 percent upside from Monday's closing price.

According to the brokerage, the DAC has approved procurement of 138 ALHs from HAL. CLSA estimates that the potential order could add around 13 percent to HAL's existing $27-billion backlog and bring around $600 million in cash advances.

The brokerage additionally sees a healthy longer-term opportunity, pegging HAL's decadal pipeline at around $48 billion. Deliveries of the Light Combat Aircraft Mk1A in the second half and greater visibility on the GE engine production deal are among the key catalysts it is watching.

CLSA additionally described HAL as the cheapest pure-play defence stock despite its sector-leading position.

The latest approvals come amid a broader acceleration in India's defence procurement. Motilal Oswal Financial Services noted that approvals in FY27 so far have touched Rs 1.62 lakh crore, while approvals between FY25 and FY27 year-to-date total around Rs 13 lakh crore. The brokerage stated the measures are expanding the addressable market for domestic defence firms and improving visibility on future order inflows.