HAL profit rose despite a 2.37-point YoY margin squeeze
Other income supported profit growth, while the stock's five-day decline was unusually weak against its post-results history.
Filed 14 May 2026, 12:45 IST · Hindustan Aeronautics Ltd (HAL)
Key takeaways
- Consolidated net profit increased +5.52% YoY to Rs 4,196.04 cr, helped by other income that rose +74.04%.
- Revenue grew only +1.77% YoY while expenses rose +5.70%, squeezing operating margin by 2.37 percentage points to 36.28%.
- HAL's stock fell -5.37% five sessions after the results, versus a 1.56% median absolute move after its past eight results.
Price around the results
Other income supported the profit increase
Consolidated profit before tax grew +7.00% YoY, but operating profit fell -4.46% as costs outpaced revenue. Other income rose +74.04% and contributed 20.84% of pre-tax profit, making it a material support to reported earnings. The tax rate also increased by 1.05 percentage points, partly offsetting that benefit to net profit.
Q4 brought a sharp sequential margin recovery
Sequentially, revenue rose +81.10% while expenses grew +52.44%, so operating margin expanded by 11.98 percentage points. This lifted margin from 24.30% in Q3FY26 to 36.28% in Q4FY26. The year-on-year comparison is less favourable because Q4FY25 margin was 38.65%, 2.37 percentage points above the current quarter.
Margin stayed well above the Industrials peer median
HAL's 36.28% operating margin was 20.62 percentage points above the 15.66% median for 71 Industrials companies that had reported the same quarter. The margin trend shows a recovery from 23.50% in Q2FY26 to 24.30% in Q3FY26 and 36.28% in Q4FY26, but it remains below the year-ago Q4 level.
The market reaction turned unusually negative
The stock was down -0.23% on the results date, but the decline reached -5.03% after one session and -5.37% after five sessions. That five-day move was notably larger than HAL's 1.56% median absolute move after its past eight results, which were split evenly between rises and falls.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹13,942 cr | ₹7,699 cr | +81.10% | +1.77% |
| Other income | ₹1,164 cr | ₹927 cr | +25.60% | +74.04% |
| Expenses | ₹8,884 cr | ₹5,828 cr | +52.44% | +5.70% |
| Operating profit | ₹5,059 cr | ₹1,871 cr | +170.37% | -4.46% |
| Operating margin (%) | 36.28% | 24.30% | — | — |
| Interest | ₹4 cr | ₹1 cr | +323.47% | -50.83% |
| Depreciation | ₹634 cr | ₹310 cr | +104.80% | -13.86% |
| Profit before tax | ₹5,584 cr | ₹2,487 cr | +124.54% | +7.00% |
| Tax | ₹1,388 cr | ₹620 cr | +123.78% | +11.74% |
| Net profit | ₹4,196 cr | ₹1,867 cr | +124.79% | +5.52% |
| EPS (₹) | ₹62.74 | ₹27.91 | +124.79% | +5.52% |
Operating margin of 36.28% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.23% | -1.41% |
| Next session | -5.03% | — |
| 5 sessions | -5.37% | -6.41% |
| 15 sessions | -8.70% | — |
| 30 sessions | -5.97% | — |
Volume on the results session was 2.73× its 20-day average.
What to watch
- Whether operating margin returns above 36.28% after the sequential recovery.
- Whether other income remains below or above its 20.84% share of pre-tax profit.
- Whether expenses continue to grow faster than revenue, as they did by +5.70% versus +1.77% YoY.