HAL’s Tejas Incident Analyzed
Last week’s crash of a HAL Tejas fighter jet at the Dubai Air Show has caused concern, but a leading investment firm, Choice Institutional Equities, believes Hindustan Aeronautics Limited (HAL) remains on a strong path. The firm maintains a ‘Buy’ rating for HAL stock, projecting a target price of ₹5,570. This means the stock could potentially increase by 21.27% from its current value.
Key Points
- Tejas crash occurred during a demonstration at the Dubai Air Show.
- Investment firm sees short-term volatility, no structural programme impact.
- HAL’s Tejas program is complex, few nations have built similar jets.
- Accidents during testing are common for advanced fighter jets globally.
- HAL’s safety record is good, lower than average for modern fighters.
- Long-term HAL fundamentals are strong, driven by domestic delivery plans.
The accident itself involved a Wing Commander, tragically resulting in his death. Experts believe the crash may have been caused by a difficult maneuver – trying to fly upside down. The Indian Air Force is now investigating to find the exact cause of the mishap.
What’s important to understand is that the Tejas program is a very complicated one. Only a small number of countries have successfully created their own advanced fighter jets like this. During training or shows, accidents can happen, and this is normal.
Globally, even top-of-the-line fighter jets, like the F-35 and Rafale, have experienced accidents when being tested or shown off. HAL’s Tejas crash is similar to these events, and HAL’s safety record is actually better than most modern fighter jets.
Choice Institutional Equities believes that the main focus right now is on getting more Tejas jets built for India’s military. They predict that when export opportunities become available, things will calm down, and investors will feel better about HAL.
“The key is to recognize that HAL’s Tejas programme represents a significant technological advancement, and the occasional setback is an inherent part of pioneering new military capabilities.”
