Shares of Hindustan Aeronautics Limited (HAL) experienced a sharp decline of 8% during Wednesday's trading session, closing at ₹4,100.15. This significant drop followed reports that the state-owned defence giant was not shortlisted to develop and manufacture next-generation fighter jets under India's Advanced Multirole Combat Aircraft (AMCA) programme, marking a substantial setback for the company.
HAL Share Price Movement and Market Reaction
The defence stock opened at ₹4,220 in the early morning session on Wednesday, compared to the previous close of ₹4,470. It soon declined to the day's low of ₹4,100.15, reflecting investor concerns about HAL's exclusion from this critical defence project. This development has raised questions about the company's future revenue streams and strategic positioning within India's defence manufacturing ecosystem.
Why HAL Shares Are Falling
According to a report by Hindustan Times, HAL has been eliminated from the race to develop India's fifth-generation stealth fighter jet under the AMCA programme. This marks the first instance where the state-owned aircraft manufacturer will not participate in one of the country's most crucial defence initiatives. HAL has long positioned itself as India's lead combat aircraft manufacturer, and not being shortlisted means the company potentially loses access to a massive, steady revenue stream, thereby putting pressure on the PSU stock.
The report detailed that besides HAL, several other entities submitted bids for the programme. These included:
- Tata Advanced Systems Limited
- Adani Defence and Aerospace
- Larsen & Toubro (L&T) in consortium with Bharat Electronics Limited (BEL)
- Goodluck India partnered with BrahMos Aerospace Thiruvananthapuram Ltd and Axiscades Technologies
- Bharat Forge Ltd along with BEML Ltd and Data Patterns
Background of the AMCA Programme
The Aeronautical Development Agency (ADA) invited Expressions of Interest for the AMCA programme just weeks after the defence ministry unveiled its much-anticipated roadmap to accelerate development of the stealth fighter. The ministry stated that the execution framework would be competitive and offer a level playing field to both public and private sector players.
Last year, Defence Minister Rajnath Singh approved the industry partnership model, with HAL—India's only fighter aircraft manufacturer—widely seen at the time as the leading contender for the project. The seven applicants were initially assessed by a committee comprising senior officials from the Defence Research and Development Organisation (DRDO), after which the findings were examined by a panel chaired by Defence Secretary Rajesh Kumar Singh.
Under the industry partnership approach being followed by ADA, the EoI specifies that shortlisted companies must have the capability to establish a manufacturing facility for serial production of the AMCA. It also stipulates that the timeline for development, prototyping, flight testing and certification should be capped at eight years.
HAL Share Price: Technical Analysis
HAL share price has remained under pressure in the near-term. The PSU defence stock has fallen over 10% in the past five sessions and 7% in a month. Meanwhile, the defence stock has shed 7.23% in six months and 4.27% in terms of year-to-date (YTD) performance. However, it's important to note that the PSU defence stock has delivered multibagger returns of a whopping 731% over five years.
Expert Technical View
Hitesh Tailor, Technical Research Analyst at Choice Broking, noted that HAL is currently trading around ₹4,235, navigating a retracement phase within its broader long-term uptrend. On the weekly chart, the PSU defence stock is oscillating in a sideways zone between ₹4,000 and ₹4,500, facing stiff resistance at the 50-week EMA near the ₹4,450–₹4,550 range. The 100-week EMA around ₹4,100 provides a critical floor that must be sustained to maintain the structural integrity of the trend.
"Momentum remains subdued, with the RSI at 39.87 reflecting a short-term downside bias and a lack of immediate buying pressure," Tailor explained. "This indicates that the stock is in a 'wait-and-watch' phase as it seeks to stabilise near key support levels. A reversal in the RSI toward the 50-60 zone would be necessary to signal a shift back toward positive momentum."
The expert advised that for a fresh bullish entry, traders should wait for a decisive breakout above ₹4,500 supported by healthy volume. Sustaining above this level would confirm the end of the consolidation and likely trigger a continuation of the primary uptrend.
The defence stock hit a 52-week high of ₹5,166 on May 16, 2025, and a 52-week low of ₹3,045 on March 3, 2025.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
