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Informist, Saturday, Aug. 9, 2025

By Sunil Raghu

AHMEDABAD - Hindustan Aeronautics Ltd. is likely to report a decline in net profit for the June quarter as delays in delivery of key orders particularly light combat aircraft and advanced light helicopters may weigh on earnings, analysts said. However, revenue is expected to rise on a year-on-year basis, aided by execution of other ongoing contracts.

The average of estimates from eight brokerage houses show the company is expected to post over 12% on-year decline in its net profit for the June quarter to INR 12.6 billion. Its revenue is seen rising 11.9% on year to INR 48.6 billion. In the year-ago quarter, HAL had reported a net profit of INR 14.4 billion on revenue of INR 43.5 billion. In the March quarter, its net profit stood at INR 39.58 billion on revenue of nearly INR 137 billion. The March quarter is typically the strongest for the state-owned defence company due to delivery-linked milestones and year-end budgeting norms.

The Bengaluru-based 'Maharatna' company HAL is engaged in design, development, manufacture, repair and overhaul of wide range of aircraft, helicopters and aero engines. It also makes industrial marine gas turbines.

Analyst estimates for HAL's net profit in the June quarter range from a low of INR 8.9 billion by Nirmal Bang Equities Pvt. Ltd. to a high of INR 15.4 billion by Antique Stock Broking Ltd. The revenue estimates vary from INR 52.5 billion by Motilal Oswal Financial Services Ltd. to INR 46.7 billion by Elara Securities (India) Pvt. Ltd. The wide variation in estimates for revenue reflects different assumptions on project execution and billings during the quarter. The divergence also stems from differing assumptions on the company's operating margins.

While analysts differ on the extent of revenue for HAL, they are largely in agreement that HAL's revenue is set to rise year-on-year in the June quarter. Nomura Equity Research expects an 8.5% year-on-year rise, citing strong execution of the company's order book, while Motilal Oswal Financial Services sees revenue growing 21% for the same reason.

Nomura expects HAL's earnings before, interest, tax, depreciation, and amortisation margin to remain largely flat at 22.7%, while Motilal Oswal projects a 120-bps expansion, aided by improved indigenisation and easing of supply chain constraints. The average of seven brokerages see Hindustan Aeronautics' EBITDA at INR 11.6 billion, between a range of INR 10.7 billion and INR 13.4 billion.

HAL is slated to announce its June quarter earnings on Tuesday.

As of Jun. 30, Hindustan Aeronautics Ltd.'s total order book stood in the range of INR 1.8 trillion–INR 1.9 trillion. On Jun. 20, HAL announced it had emerged as the successful bidder for manufacturing and designing the Indian Space Research Organisation's small satellite launch vehicle. It did not disclose the order value or size of the project. Brokerage Nuvama Wealth Management sees a robust INR 4.4 trillion opportunity pipeline over the next decade for HAL, which is expected to support steady order inflows. The brokerage also projects a capital expenditure of around INR 150 billion by the company over the next four to five years.

The market participants are keen to hear management commentary on the status of Tejas Mk1A deliveries to Indian Air Force, Su-30 avionics upgrade project and order prospects. The execution of huge backlog, incremental inflows and comfortable margin levels, too, remain key focus areas for analysts.

On Jun. 27, HAL announced that it would pay a final divided of INR 15 per share for 2024-25 (Apr-Mar) post approval of shareholders at the annual general meeting to be held on Aug. 21.

On Friday, shares of Hindustan Aeronautics closed at INR 4,440.60 on the National Stock Exchange, down 2.4%. The share price is 6.8% lower than INR 4,768 on May 14, the day HAL announced its March quarter earnings.

Of the nine research reports on the company available with Informist, all brokerages have a ‘buy' or equivalent rating, with an average target price of INR 5,926 per share.

Following are the June quarter standalone earnings estimates for Hindustan Aeronautics based on reports from eight brokerage firms in the descending order by estimate of net profit:

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Edited by Akul Nishant Akhoury

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