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Informist, Wednesday, Nov. 5, 2025

By Rajesh Gajra

NEW DELHI - State-owned Hindustan Aeronautics Ltd., the aircraft manufacturer and supplier for the Indian Air Force, is expected to post moderate growth in its bottom line for the September quarter due to stable growth in the top line and operating profit. The top line is seen growing steadily on the back of order book execution, according to analysts.

The defence sector and aerospace company, in which the government owns 71.6% stake, is expected to post growth of 12% on year and 21% on quarter in its net profit at INR 16.7 billion, according to the average of estimates by eight brokerages. These net profit estimates range from a low of INR 13.3 billion by Anand Rathi Share and Stock Brokers to a high of INR 18.5 billion by Elara Securities (India).

The company's revenue is seen at INR 65.8 billion, up 10% on year and 37% on quarter. The lowest revenue estimate for the reporting quarter is INR 62.2 billion by Nomura Equity Research and the highest revenue estimate is INR 68.1 billion by Sharekhan.

"We expect HAL to register a revenue growth of ~9% YoY driven by strong execution of a robust order book of ~Rs2.5trn (around INR 2.5 trillion)," brokerage Prabhudas Lilladher said in a report. The brokerage said Hindustan Aeronautics is a strong play on India's growing military strength and modernisation of air defence, given that is the primary supplier of military aircraft to the government. The "execution of Russian origin engine orders would help HAL report a 12.3%" revenue growth in the September quarter, according to brokerage Anand Rathi.

The closing order book of the company was INR 1.99 trillion at the end of the June quarter, and it is expected to be higher at INR 2.44 trillion at the end of the September quarter, according to brokerage Nirmal Bang Equities.

The company said it had received a large order from the defence ministry at the end of the September quarter. The INR 624-billion order was for the supply of 97 light combat aircraft Mk1A, comprising 68 fighters and 29 twin seaters, along with associated equipment, to the Indian Air Force. The delivery of these aircraft, as per the contract, would start from 2027-28 (Apr-Mar) and would be completed over six years, the company had said.

Hindustan Aeronautics' earnings before interest, tax, depreciation, and amortisation is expected to be INR 18.3 billion, according to the average of estimates by six brokerages. Analysts' expectations of the company's EBITDA and margin growth vary.

The company's EBITDA margin is likely to decline by 54 basis points on year to 26.9% in the September quarter "due to higher provisions and other expenses, while the EBITDA will increase 6.9% on year" according to brokerage Prabhudas Lilladher. Anand Rathi expects Hindustan Aeronautics' EBITDA margin to expand 90 basis points on year to 28.3% on the back of operating leverage and "no major provision expected."

Sharekhan expects expansion of 50 basis points in Hindustan Aeronautics' EBITDA margin for the September quarter. Prabhudas Lilladher expects the company's "EBITDA margin to expand ~10bp YoY (by around 10 basis points year on year) even on a high base, aided by increased indigenization and easing of supply chain issues." The company's bottom line growth will largely track the EBITDA growth for the September quarter.

Hindustan Aeronautics is detail its September quarter earnings on Nov.12. Investors will track the company's "execution of a huge order backlog, any major provisions, incremental inflows, and margins," brokerage Motilal Oswal said. It said investors will also monitor the company's working capital cycle, and the status of Tejas aircraft Mk1a deliveries, and "related orders for Su-30 avionics upgrade project." The management's commentary on pace of order execution, "status of GE engines, deliveries of Tejas Mk1A and bidding for India's 5th gen AMCA (advanced medium combat aircraft) program" will be the key factors to watch, Prabhudas Lilladher said.

On Tuesday, shares of Hindustan Aeronautics closed at INR 4,685.80 on the National Stock Exchange. The stock is up around 5% since the company's June quarter earnings announcement on Aug. 12. All the 11 brokerage reports on the company available with Informist have a 'buy' call on the stock. The average target price of the 'buy' calls is INR 5,812.

In the trailing quarter, the company had reported a 4.1% on-year decline in its net profit at INR 13.8 billion, while its revenue increased 11% on year to INR 48.2 billion.

Following are the September quarter earnings estimates for Hindustan Aeronautics from eight broking firms in descending order of estimate of net profit in INR million:

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Edited by Avishek Dutta

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