Halliburton Company

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Bullish +75

HAL Target Price Raised By Nirmal Bang After Q4 Results β€” Check Potential Upside, Key Triggers

AI-generated analysis

πŸ“ˆ Nirmal Bang raised its target price for HAL by 13% to Rs 5,432 following strong Q4 results.

πŸ’° The brokerage maintains a Buy rating on Hindustan Aeronautics Ltd with an implied upside of 18%.

πŸš€ Revenue grew 1.8% year-over-year to Rs 13,940 crore in Q4 FY26, driven by improved execution and deliveries.

βš™οΈ Ebitda margin contracted 237 basis points year-over-year to 36.3% due to higher raw material consumption.

πŸ“Š Adjusted PAT increased 5.5% year-over-year to Rs 4,200 crore, surpassing analyst estimates by 7.7%.

🀝 HAL's ToT agreement with GE for F414 engines is expected to reduce external dependence and support faster execution.

πŸ› οΈ Expanded collaboration with Rolls-Royce aims to strengthen India's indigenous aero-engine manufacturing ecosystem.

πŸ“ˆ Nirmal Bang projects a compound annual revenue growth rate of 18% over FY26–FY28E.

πŸ’Έ The stock is currently trading at a 1-year forward P/E of 26.1x, above its five-year historical average of ~20x.

🎯 Nirmal Bang values the stock at 31x Mar-28E EPS, which is 28x higher than the long-term average.

πŸ“‰ Ebitda stood at Rs 5,060 crore in Q4, down 4.5% year-over-year but up 170.4% quarter-on-quarter.

🏭 Higher manufacturing activity and likely deliveries of RoH orders contributed to the revenue growth in Q4.

⚠️ NDTV Profit states that the report does not constitute investment advice and users should consult an expert.

πŸ“ The content is authored by an external party, and NDTV Profit does not vouch for its accuracy.

Bullish Signals
  • Nirmal Bang has maintained its Buy rating on HAL while revising its target price upward by 13% to Rs 5,432 from the earlier target of Rs 4,800.
  • The brokerage projects a compound annual growth rate of 18% for revenue, 19% for Ebitda, and 14% for net profit over FY26–FY28E.
  • HAL reported Q4 revenue of Rs 13,940 crore, which was up 1.8% YoY and 81.1% QoQ, beating estimates by 4.4%.
  • Adjusted PAT stood at Rs 4,200 crore, growing 5.5% YoY and 124.8% QoQ, surpassing estimates by 7.7%.
  • Ebitda came in 6.6% ahead of estimates despite a YoY contraction, driven by a sharp 1,198 bps expansion QoQ due to improved operating leverage.
  • The ToT agreement with GE for F414 engines is expected to reduce external dependence and support faster execution over the medium term.
  • Expanded collaboration with Rolls-Royce is anticipated to strengthen India's indigenous aero-engine manufacturing ecosystem and enhance long-term capabilities.
Risk Factors
  • Ebitda margins contracted by 237 basis points year-over-year to 36.3%, primarily due to higher raw material consumption.
  • The stock is currently trading at a 1-year forward P/E of 26.1x, which is above its five-year historical average of approximately 20x.
Full Analysis
Nirmal Bang has raised its target price for Hindustan Aeronautics Ltd (HAL) by 13% to Rs 5,432 from Rs 4,800 following the company's Q4 FY26 results, maintaining a Buy rating. The brokerage cites strong order visibility, an improving execution outlook, and HAL's growing strategic importance in India's defence sector as key drivers for this upward revision, implying a potential upside of 18% for the stock. Nirmal Bang projects that HAL's revenue, Ebitda, and net profit will grow at compound annual rates of 18%, 19%, and 14% respectively over FY26 to FY28E. The firm values the stock at a forward P/E of 31x based on March 2028 earnings estimates, which is above its five-year historical average of approximately 20x. HAL reported Q4 FY26 revenue of Rs 13,940 crore, representing a 1.8% year-over-year increase and an 81.1% quarter-over-quarter jump, surpassing analyst estimates by 4.4%. This growth was driven by improved execution, higher manufacturing activity, and deliveries of RoH orders and AL31FP engines. Ebitda stood at Rs 5,060 crore, down 4.5% year-over-year but up 170.4% quarter-over-quarter, coming in 6.6% ahead of estimates. Adjusted PAT was Rs 4,200 crore, up 5.5% year-over-year and 124.8% quarter-over-quarter, exceeding estimates by 7.7%. While Ebitda margins contracted by 237 basis points year-over-year to 36.3% due to higher raw material consumption, they expanded sharply by 1,198 basis points quarter-over-quarter on improved operating leverage. The brokerage highlights the Total Ownership (ToT) agreement with GE for F414 engines for the LCA Mk-2 as a factor expected to reduce external dependence and support faster execution. Additionally, HAL's expanded collaboration with Rolls-Royce is seen as strengthening India's indigenous aero-engine manufacturing ecosystem and enhancing long-term manufacturing capabilities.