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Informist, Saturday, May 17, 2025

 

AHMEDABAD – Hindustan Aeronautics Ltd. has firmed up plans to invest INR 140 billion to INR 150 billion over the next five years to expand its manufacturing capabilities for fighters, trainers, helicopters, and engines, the company's management said Friday. Speaking to analysts after earnings, HAL management said that the major initiatives would include building repair and overhaul facilities, increasing indigenous part in manufacturing of engines from 57% currently and supporting new development programmes.

 

"Significant investments are planned for increasing the manufacturing capacity for helicopters, fighters, trainers, engines at various locations. These enhanced capacities would not only enable HAL to speed up execution of the existing orders, but also free up capacities for additional orders from our customers," said D.K. Simi, chairman and managing director, Hindustan Aeronautics Ltd. 

 

The company, which was awarded 'Maharatna' status in 2024, reported a near 8% on-year fall in net profit for the March quarter to INR 39.58 billion against the Street's expectations of INR 30.10 billion. The revenue declined by over 7% on year to INR 137 billion, higher than the Street's estimate of INR 131 billion.

 

The company management gave a revenue growth guidance of 8–10% for FY26, with a potential to rise into double digits in subsequent years. It also sees its EBITDA margins to remain stable at 31% operationally, aided by a balanced product mix and efficiency improvements.

 

While the Bengaluru-headquartered public sector aviation and avionics major may have lagged on street expectations in terms of net profit and revenue in FY25, it sprung a surprise on order book. The firm had guided for an order book of INR 470 billion for FY25. Instead, HAL's total order book as on April was INR 1.89 trillion, up from INR 941.27 billion in the previous year. Of this, the company received orders worth INR 1.25 trillion in last financial year, including INR 192.71 billion in repair and overhaul contracts, INR 255 billion for 240 AL-31 FP engines for the Sukhoi-30 fighter aircraft, INR 134.54 billion for 12 Sukhoi-30 MKI aircraft, design and development orders of INR 31.8 billion, export orders of INR 4.93 billion and INR 627.77 billion for 156 light combat aircraft 'Prachand' helicopters, which is the single largest procurement by the government from the company till date.

 

The management said going ahead, the order pipeline remains strong with potential orders worth INR 1 trillion, including 97 light combat aircraft fighters, 143 Advanced Light Helicopters, 10 variants of the Dornier Do 228 for Indian Navy and upgrade of 40 Dornier for the Indian Air Force. Additionally, it also expects to receive repair and overhaul orders worth INR 200 billion. The company expects them to materialise within next one-two years. "These orders will keep our manufacturing lines busy till 2032-33," the company management said, adding that going forward, the order execution will gather momentum.

 

The analysts, too, were keen on the management's commentary on delivery schedules of most of these products, HAL management said that it would deliver 12 Mk1 LCAs in FY26, which will be ramped up to 30 LCAs by FY27. For LCA Mk2, HAL plans to fly prototypes by FY26, with certification by FY30 and being production from FY31, adding that concurrent production could begin earlier.

 

On the delivery of 240 AL-31 FP engines for Sukhoi-30 fighter, the company said it has begun delivering engines from October and would deliver them at the rate of about 30 engines per annum, completing the order over eight years. Currently, the indigenous content is 57%, which it is trying to enhance by indigenising more of the material within the country. As for the Sukhoi-30 upgrade programme for 84 aircraft, the company expects to begin its development phase in next six months. The aircraft order is estimated to kick in about five to six years and value would accrue from sixth year onwards. As for supply of 12 Sukhoi-30 aircraft, HAL targets beginning production in FY27 as it needs to source material and seeks to conclude the order by FY29.

 

Similarly for the order for 156 Prachand helicopters, 66 for the Indian Air Force and 94 for the Indian Army, the company plans to execute this in about five-and-a-half to six years. The initial deliveries will start in 36 months, with each batch size to be about 30 aircraft per annum. As for the progress on light utility helicopter, or LUH, the company said that while it is looking to bag an order for 12 LUHs, the order is still in the pipeline. There has also been a delay due to couple of setbacks on design, including some issue with flight control software and aircraft dynamics. The company plans to sort them in the current financial year. The company said that despite challenges, they have already built eight helicopters using internal funds, so that it can deliver the helicopters in a "quick time".

 

When asked whether HAL was considering entry in drone market, especially after extensive role played by drones in recent India-Pakistan conflict, the company said it was looking at unmanned combat air vehicles that can carry missiles and bombs. Its 3-tonne unmanned combat air vehicles are still under research and development stage. "...We have come to a stage where we are building the prototypes and testing the different technologies like the data link, the engines and so on. So that is still a work in progress," the HAL management said.

 

On Friday, shares of Hindustan Aeronautics ended at INR 5,127.70 on the National Stock Exchange, up 5.4%.  End

 

Reported by Sunil Raghu

Edited by Akul Nishant Akhoury

 

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