HAL shares fall up to 4.3%: PSU issues clarification on Dubai Air Show incident; here is what CLSA says

The stock slipped as much as 4.3% to ₹4,405 on the NSE in the opening deals.

The HAL Tejas is an Indian single-engine, 4.5-generation multirole combat aircraft with a delta wing design, developed by the Aeronautical Development Agency (ADA) and manufactured by Hindustan Aeronautics Limited (HAL) for the Indian Air Force (IAF).

The Tejas, according to reports, had its maiden flight in 2001 and was inducted into the IAF in 2015. The first operational squadron of Tejas was formed in 2016, with No. 45 Squadron IAF – Flying Daggers – being the first to transition from MiG-21 Bisons to the Tejas.

The Tejas is constructed using a combination of aluminium-lithium alloys, titanium alloys, and carbon-fibre composite materials.

These composite materials, according to reports, make up 45% of the airframe by weight and 90% by surface area, the highest among contemporary aircraft.

It is also reported to be the smallest and lightest supersonic combat aircraft in its class.

What analysts say?

Elara Capital, in its note after the accident, said that fighter jet incidents aren’t uncommon, with 7+ crashes in CY25, including two F-35s & 100+ air-show accidents over the past decade.

The research firm added that Tejas Mk1 is unlikely to be grounded, as the incident occurred during an airshow, not mission mode. Hindustan Aeronautics (HAL) remains India’s key aircraft manufacturer with strong long-term order visibility, though near-term price softness is possible.

CLSA, too, has maintained its positive stance on HAL. It said that experts have highlighted three possible causes: sudden loss of thrust from the GE engine, biological effects of aerodynamic stall induced during a negative-G manoeuvre or human error.

HAL issues clarification

In its clarification on November 24, HAL said that the recent incident during the aerial display at the Dubai Air Show is an isolated occurrence arising out of exceptional circumstances.

"We would like to assure that there is no impact on the company’s business operations, financial performance or its future deliveries. The company is extending its full support and cooperation to the agencies conducting the investigation. The Company will continue to keep the stakeholders informed of any material developments," the statement read.

HAL order book

In late September 2025, Hindustan Aeronautics Ltd.'s (HAL) CMD, DK Sunil, told CNBC-TV18 that the Defence Ministry's order for 97 Tejas fighter jets will take the aviation company's order book to ₹2.7 lakh crore by FY27. The CMD said that the company has completed price negotiations with GE for an additional 113 engines, with the final contract expected to be signed in October.

The official added that 28 entities have expressed interest in collaborating with HAL on the 5th-generation fighter jet programme, and the PSU plans to finalise its partners within the next 30 days.

About Hindustan Aeronautics

Hindustan Aeronautics Limited (HAL) is a state-owned aerospace and defence company based in Bengaluru. It is a public sector undertaking operating under the Ministry of Defence.

Hindustan Aircraft Limited was founded by Walchand Hirachand in December 1940. The government acquired a one-third stake in HAL in 1941. The HT-2 Trainer aircraft, manufactured by HAL, took its first flight in August 1951. The government established Aeronautics India Limited (AIL) in August 1963 to start the production of MiG-21 aircraft. In October 1964, Hindustan Aircraft Limited merged with Aeronautics India Limited, leading to the formation of HAL as it is known today.