Key Points:
- Dubai crash sends HAL shares down 2-3% during market close session
- HAL is a state-owned company, publicly listed in India
- Production delays and engine shortages continue to hinder deliveries
- Analysts highlight execution risks and export challenges
ISLAMABAD: Shares of Hindustan Aeronautics Limited (HAL), India’s state-owned aerospace and defence company, fell 2-3% during the closing session of the Indian stock market following the dramatic crash of a HAL Tejas fighter jet at the Dubai Air Show.
The incident drew international attention to the operational reliability of India’s indigenous aircraft and the performance of HAL as a manufacturer, according to economictimes.indiatimes.com.
The share decline reflected broader market sentiment on defence manufacturing stocks, with investors factoring in risks related to aircraft safety, operational reliability, and ongoing production delays.
Analysts noted that the drop occurred despite HAL’s strong order book, highlighting market sensitivity to high-profile operational incidents. Trading patterns indicated a temporary sell-off by institutional investors, while retail interest remained steady, suggesting confidence in HAL’s long-term contracts and government backing.
HAL, established in 1940 and controlled by India’s Ministry of Defence, is responsible for the production of the Tejas Light Combat Aircraft (LCA. The company operates multiple production lines in Bengaluru and Nashik, producing variants including the Tejas Mk1, upgraded Mk1A, and the future Mk2, designed for enhanced avionics, payload, and combat capability.
The Tejas programme began in the 1980s with the aim of replacing India’s aging MiG-21 fleet. Over decades, HAL has developed the jet using indigenous design, aerodynamics, and avionics, though it has also integrated key components from international partners. The programme includes a comprehensive training and production ecosystem, with HAL collaborating with the Indian Air Force on pilot training, maintenance, and operational testing. Production lines currently have a target output of 16–20 aircraft per year, but engine supply constraints and quality certification processes have delayed this schedule.
The Dubai crash follows earlier operational concerns, including an oil condensation issue on another Tejas aircraft, and past accidents such as a March 2024 Tejas crash near Jaisalmer and a July 2025 Jaguar trainer jet crash near Churu, causing the deaths of both pilots, according to indianexpress.com, and dawn.com.
Production challenges continue, notably the limited delivery of GE F404-IN20 engines for the Tejas Mk1A. According to Indian media, HAL is using interim solutions for test flights while awaiting a full supply of engines.
Despite these hurdles, India approved approximately $7.5 billion USD order for 97 additional Tejas Mk1A jets in 2025, bolstering HAL’s order book. Analysts, however, caution that delays, prior technical issues, and quality control risks could affect timely delivery and the jet’s international export prospects, according to outlookbusiness.com.
HAL continues to expand partnerships with private Indian vendors for sub-assemblies, including VEM Technologies and L&T, as part of an indigenisation drive, yet engine shortages and operational reliability remain key concerns, according to reddit.com.
