Goldman Sachs has reversed its preference within India's aerospace and defence sector, upgrading Hindustan Aeronautics to 'Buy' while downgrading Data Patterns (India) to 'Neutral' after reassessing execution trends, order visibility and valuations. According to reports from The Financial Express, the brokerage said execution bottlenecks at Hindustan Aeronautics were easing, while Data Patterns had already delivered strong stock returns and now faced limited near-term catalysts.
Goldman Sachs upgraded Hindustan Aeronautics to 'Buy' with a target price of ₹5,870, implying an upside of 27%. As reported by The Financial Express, the brokerage said its view changed because execution risks that had weighed on the stock for nearly two years were beginning to recede, while earnings expectations remained conservative relative to the opportunities emerging across multiple defence platforms. The brokerage raised its financial year 2027 revenue estimate by 9% and financial year 2028 revenue estimate by 23% after advancing expected deliveries of the HTT-40 trainer aircraft, Light Combat Helicopter Prachand and Su-30 platforms by one year.
Goldman Sachs downgraded Data Patterns to 'Neutral' with an unchanged target price of ₹4,165, implying a 6% downside. According to reports from The Financial Express, the brokerage said the stock had already reached its target after delivering strong returns since coverage was initiated, leaving limited room for further re-rating despite healthy earnings growth. Data Patterns had returned 69% since its initiation report in October 2025 and was trading at the upper end of its historical valuation range.
Goldman Sachs expects execution to pick up from Q2FY27 after a nearly two-year delay in delivering the Tejas Mk1A fighter jet, as reported by The Financial Express. The brokerage noted that channel checks indicated GE Aerospace was likely to streamline deliveries of F404 engines during the second half of financial year 2027, removing one of the biggest bottlenecks for Hindustan Aeronautics. For Data Patterns, Goldman Sachs believes valuation already captured much of the company's strong earnings trajectory, making further upside difficult without a meaningful acceleration in order inflows.
