Disclaimer: This article is written by Shrikant Chouhan, head of equity research, Kotak Securities. Views expressed are his own. Readers’ discretion is advised.
Hindustan Aeronautics Ltd (HAL) – Add
CMP – ₹4,670
FV – ₹5,305
Resistance – ₹4,750/4,900
Support – ₹4,550-₹4,400
Hindustan Aeronautics Ltd (HAL) is India’s premier aerospace and defence manufacturer, with a strong presence across aircraft and helicopter manufacturing, engines, avionics, upgrades, repair and overhaul (ROH), and lifecycle support. Its integrated capabilities across the aerospace value chain remain a key competitive differentiator, providing recurring revenue opportunities alongside its large manufacturing order book.
HAL’s order book has expanded nearly four times over the past decade to ₹2.55 lakh crore as of FY26, providing strong revenue visibility of around 7–8 years. During FY26, the company secured manufacturing contracts worth ₹69,600 crore and ROH contracts ₹17,300 crore, highlighting sustained demand across both manufacturing and aftermarket businesses. The prospective order pipeline of ₹4.6 lakh crore, including major programmes such as Tejas Mk2, IMRH and helicopters, further supports HAL’s long-term growth prospects. The near-term prospect pipeline of ₹90,000 crore also provides visibility for continued order inflows.
For FY27, key opportunities are expected from Tejas Mk2, Light Utility Helicopter (LUH) and Indian Multi-Role Helicopter (IMRH) programmes. The proposed Su-30MKI upgrade programme could provide a meaningful medium-term opportunity, while exports and civil aerospace remain strategic growth vectors. Successful resolution of ongoing Tejas Mk1A issues, improvement in engine supplies and commencement of aircraft deliveries remain the key near-term catalysts for execution and revenue growth.
HAL’s Q1FY27 PAT was 12 per cent ahead of our expectations, supported by steady execution and better-than-expected margins. We expect revenue to grow 14 per cent y-o-y in Q2FY27, with Ebitda margin estimated at 26.1 per cent, up 265 bps y-o-y.
Over the next five years, we expect HAL’s revenue to grow at a 16 per cent CAGR, supported by a strong order book, a robust order pipeline, increasing indigenisation and growing opportunities in upgrades and exports. We maintain an ‘Add’ rating with a DCF-based fair value of ₹5,305 per share.
Honasa Consumer – BUY
CMP – ₹444
FV – ₹580
Resistance – ₹457/470
Support – ₹425-415
Honasa Consumer (parent of Mamaearth, The Derma Co., Aqualogica, Dr. Sheth’s, and B blunt) has completed its transition from a high-burn D2C entity into a profitable, multi-brand FMCG platform. Non-Mamaearth brands are scaling rapidly and now drive a significant share of incremental growth.
The Derma Company crossed the ₹750 crore Annual Run Rate (ARR) milestone, emerging as a leading active-ingredient sunscreen brand in India. After clearing legacy inventory in 2025, channel inventory remains healthy under 30 days.
Secondary offline sales through General Trade and Modern Trade are compounding at >35 per cent y-o-y, expanding market share in core categories like face cleansers and shampoos. Honasa recently acquired a 58 per cent controlling stake in Fluence Pharma to launch ‘Honasa Health’, entering the high-margin nutraceuticals and dermatological supplement market. Honasa Consumer represents a high-growth compounding story within the Indian personal care space. With volume growth exceeding 30 per cent and Ebitda margins doubling toward 15 per cent, the stock offers attractive risk-reward for mid-to-long-term institutional portfolios.
In Q1FY27, Honasa reported 26 per cent y-o-y organic revenue growth, with Ebitda margin expanding by 485 bps yoy to 13.1 per cent. Mamaearth grew in the high teens on a weak base, while younger brands grew over 40 per cent (30 per cent organic). TDC crossed ₹1,000 cr in net sales on an ARR basis, with a low-teen EBITDA margin. Management categorically confirmed that secondary sales are tracking primary sales, with no benefit from channel stocking. We raise FY26-29E EPS by 12-18 per cent. Roll over and increase FV to ₹580 (from ₹455), based on a 50 times Sep-2028E PE (40 times earlier). We upgrade the stock to ‘Buy’ from ‘Add’.
Honasa started FY2027E on a strong note, with growth and margin tracking well ahead of its MT targets (18 per cent revenue CAGR and 100 bps margin expansion per year over FY2026-31E). Honasa has demonstrated an ability to (1) identify emerging trends and seed new brands, (2) scale both in-house and acquired brands, (3) stabilise and revive a brand (Mamaearth), (4) build a strong omnichannel presence and (5) execute with agility—all while maintaining sound financial discipline.
