Shares of Hindustan Aeronautics (HAL) extended their gains on Tuesday as brokerages upgraded the stock following a stellar Q4 performance.

What Happened: The strong performance has led many brokerages to raise their target prices for HAL, indicating further potential upside.

In the fourth quarter, HAL posted a 52% year-on-year increase in net profit to ₹4,309 crore and an 18% rise in net sales to ₹14,769 crore. The company’s EBITDA margin also jumped to 40% from 26% in the same period last year.

Analyst Views: Global brokerage UBS had already raised its target price for HAL before the Q4 results, maintaining a “buy” rating and increasing the target by over 44% to ₹5,200. UBS cited HAL’s improved order book, lower competition, and increased export opportunities as key factors for the upgrade.

The brokerage predicts a favourable decade for HAL, driven by government prioritisation of defense manufacturing, capacity expansion and trust in domestic platforms.

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Jefferies also raised its target price by nearly 47% to ₹5,725 while maintaining a “buy” rating. It highlighted HAL’s clear growth visibility, expecting higher margin service income and double-digit revenue growth from aircraft deliveries over the next four to six years. Jefferies also noted HAL’s focus on cost optimisation and improving export visibility.

Nomura upgraded its target price for HAL by over 7% to ₹5,100, maintaining a “buy” rating. It emphasised HAL’s strong order backlog of around ₹94,000 crore and a robust pipeline of around ₹3.9 lakh crore over the next eight years, driven by the Indian Air Force’s fleet management and replacement programs.

Elara Capital also joined in, raising its target price by 36% to ₹5,590 and upgrading the stock to a “buy”. They see opportunities for HAL in indigenisation and unexplored exports in the aircraft and helicopter industry, predicting an earnings compund annual growth rate of 17% between FY24-26 and a return on equity of 24%.

Price Action: Despite a 22% surge in the past week and over 200% in the past year, the stock has showed no signs of slowing down.

HAL’s share price was up 0.8% at ₹4,767.95 around noon on Tuesday, easing off of a fresh record high.

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