The shares of the defence major dropped to an intraday low of Rs 3,976 apiece in today’s trade, before recovering some losses.
Reports on Tejas crash
Media reports claimed the Tejas aircraft overshot the runway after a suspected brake failure while returning to its base following a training sortie earlier this month. The pilot ejected safely, the reports added.
After the incident, the Indian Air Force (IAF) grounded its entire fleet of nearly 30 single-seat Tejas jets to conduct an extensive technical scrutiny, the reports further said.
HAL issues clarification
After the stock saw significant volatility following the reports, HAL issued a clarification. The defence company said that there has been no crash of the LCA Tejas. “The event in question was a minor technical incident on ground,” it said.
HAL noted that LCA Tejas maintains one of the world’s best safety records among contemporary fighter aircraft. “As a standard operating procedure, the issue is being analysed in depth and HAL is working closely with the Indian Air Force (IAF) for a speedy resolution,” it said.
Notably, the stock had plunged earlier in November last year after a Tejas fighter jet manufactured by the Indian PSU company crashed during a Dubai Air Show, leading to the death of an IAF officer. The single-seat LCA had crashed while performing manoeuvres.
Tejas is a single-seat, 4.5-generation multirole combat aircraft, developed by the Aeronautical Development Agency (ADA) and manufactured by HAL for the IAF.
HAL share price:
After the clarification, HAL shares closed more than 3% lower at Rs 4,030 apiece.
Putta Ravi Kumar, Defence Analyst at Choice Institutional Equities, believes that this decline appears to be sentiment-driven rather than fundamental. “The recent incident involving the HAL Tejas has triggered near-term risk aversion, leading to profit booking across defence companies,” he said.
The analyst, however, added that a single operational incident does not alter the structural demand outlook, execution pipeline, or order visibility for the sector. “We view the weakness as largely technical and sentiment-led,” he further said.
The stock has fallen over 6% in the past five days, and 7% in the past one month. It grew nearly 20% in the past one year, and over 639% in the past five years.
The company currently has a market capitalisation of Rs 2.69 lakh crore, and the stock’s P/E ratio currently stands at 31.52.