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Shares of Hindustan Aeronautics Ltd (HAL) fell on Monday following the crash of a Tejas fighter aircraft during a demonstration at the Dubai Air Show 2025. Shares fell sharply once the markets opened, raising investor concerns of reputational and operational risks.
HAL’s stock fell as much as 8.5% to Rs. 4,205.25 on the BSE, its lowest in more than seven months.
On the NSE, the stock dropped up to 4.13% to Rs. 4,405 in early trade. The steep decline was accompanied by weakness across defence stocks, dragging the Nifty Defence index down about 1.5%, with companies like Data Patterns, BEML, Zen Tech, GRSE, Paras Defence and Cochin Shipyard also losing nearly 2% each.
The crash happened during an aerobatic drill on November 21 when the single-seat Tejas aircraft went down at a low altitude. Videos circulating on social media show the jet descending quickly before erupting into flames.
The Indian Air Force confirmed that Wing Commander Namansh Syal, the pilot of the aircraft, died as a result of the incident. A Court of Inquiry is being conducted to investigate the crash further.
Some government officials indicated that earlier reports of engine oil leakage were unrelated but accept that the crash raises temporary scrutiny on HAL’s flagship programme at a time when there is so much expectation from the Tejas platform.
Analysts are overwhelmingly confident that the crash will create short-term volatility, while it remains to be seen if it implies systemic issues with the Tejas platform. Defence Aviation consultants argued that even the most mature global aircraft, like the F-35, have had multiple crashes during testing and airshows.
The company is currently operating with one of its largest-ever order books, including a recent mega contract for 97 Tejas Mk1A jets, along with sustained demand for helicopters, engines and upgrades.
HAL’s order backlog now stands at over 7.1 times FY25 revenue, providing long-term earnings visibility.
Brokerages like Choice Broking said that exports may see a temporary impact, though domestic deliveries especially the Tejas Mk1A production remain on track.
Elara Capital and CLSA both maintained positive ratings, projecting target prices of Rs. 5,680 and Rs. 5,436, respectively.
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Market experts recommend caution in the near term, citing sentiment-driven volatility, but maintain a positive long-term view.
Brokerages believe the accident will not affect HAL’s financial performance or its strategic relevance. With an estimated $54 billion project pipeline, analysts see dips as accumulation opportunities for long-term investors.
At 11:15 AM, HAL shares were trading 3.48% lower at Rs. 4,434.95 on the BSE.
