Hindustan Aeronautics
Hindustan Aeronautics
Aerospace & Defense F&OKey Fundamentals
LargecapEngineeringAerospace & DefenseTapetide Score
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Key Insights
Strengths
3- Company is almost debt free.
- Company has a good return on equity (ROE) track record: 3 Years ROE 26.0%
- Company has been maintaining a healthy dividend payout of 31.9%
Weaknesses
4- Stock is trading at 7.99 times its book value
- The company has delivered a poor sales growth of 7.78% over past five years.
- Earnings include an other income of Rs.3,897 Cr.
- Working capital days have increased from 153 days to 301 days
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 2d agoHindustan Aeronautics Ltd (HAL) is a near-debt-free aerospace & defense PSU with a market cap of ₹3,27,539 Cr, trading at a P/E of 35.5x and P/B of 8.07x. The company has delivered a strong 5-year compounded profit growth of 23% and maintains a consistent ROE of 24-27%, but revenue growth has remained modest at roughly 7-8% over the past decade with working capital days doubling from 153 to 301 days.
- Virtually debt-free balance sheet provides significant financial flexibility and resilience during cyclical downturns in defense spending
- Consistent return on equity averaging 25-27% over 5 and 10 years respectively, with the last year at 24%, indicating efficient capital deployment
- Compounded profit growth of 23% over 5 years and 16% over 10 years significantly outpaces revenue growth, reflecting margin expansion and operating leverage
- Healthy dividend payout ratio of 31.9% with a current dividend yield of 0.91%, providing regular shareholder returns from a cash-generative business
- Stock has delivered a 3-year CAGR of 36% and 5-year CAGR of 48%, reflecting strong re-rating driven by India's defense indigenization push
- TTM profit growth of 12% continues to outpace TTM sales growth of 7%, suggesting ongoing margin improvement and cost discipline
- As India's sole licensed manufacturer of fighter aircraft and helicopters, HAL operates with a near-monopoly position in domestic defense aerospace manufacturing
- Stock trades at 8.07x book value, a steep premium that prices in significant future growth and leaves limited margin of safety
- Compounded sales growth has been persistently low at just 7-8% across 3-year, 5-year, and 10-year periods, indicating structural revenue growth constraints
- Working capital days have nearly doubled from 153 to 301 days, signaling deteriorating cash conversion and potential payment delays from the government customer base
- P/E of 35.5x is elevated for a company growing top-line at only 7% TTM, implying the stock is priced for acceleration that has not yet materialized in revenues
- Other income of ₹3,897 Cr forms a meaningful component of total earnings, meaning core operating profit growth may be weaker than headline numbers suggest
- Dividend yield of only 0.91% is modest relative to the zero-debt balance sheet and government ownership, suggesting limited near-term income return at current price levels
- Heavy dependence on a single customer — the Indian Ministry of Defence — creates concentration risk and exposes the company to budget cycle volatility and payment delays
- The gap between profit CAGR of 23% and sales CAGR of 8% over 5 years cannot sustain indefinitely, as margin expansion has natural limits
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 2h ago- Tejas Mk1A engine supply delays Sep 8
Only 10 of 99 contracted GE F404 engines received so far, with ~30 airframes ready but waiting. Zero Mk1A aircraft delivered to date despite original schedule, programme over two years behind.
- Board compliance violations flagged Aug 20
HAL non-compliant with SEBI LODR Reg 17(1) and Companies Act sections on board composition since April 5, 2026 due to insufficient independent directors. Audit and nomination committees also affected.
- Nifty weakness, broad market selling Sep 9
Sensex dropped 555 points (0.73%) to 75,578 and Nifty fell 144 points (0.61%) to 23,635. Brent crude rising 1.4% to $99.41/bbl adds macro pressure.
- Private players entering fighter programmes Aug 20
RIL-Rolls-Royce partnership for AMCA Mk2 engine marks first time HAL excluded from a frontline fighter programme. Tata, L&T, Bharat Forge also in ₹15,000 Cr AMCA Phase 1.
- ₹1.1L Cr ALH order approved Sep 8
DAC granted Acceptance of Necessity for 138 Advanced Light Helicopters worth ₹110,000 crore, potentially adding ~13% to HAL's $27B order backlog per CLSA with ~$600M in cash advances.
- GE delivers 3 more F404 engines Sep 4
GE Aerospace shipped 3 F404-IN20 engines in August, taking cumulative Mk1A deliveries to 10 units. Goldman Sachs maintained Buy at ₹5,870 target; HAL shares gained 2.82% to ₹4,915.
- Citi Buy at ₹6,175, 23% upside Sep 9
Citi maintained Buy with ₹6,175 target. 24 of 30 analysts rate HAL Buy. Stock trades at ~31x FY28E PE, a discount to Indian defence peers, up 15% YTD in 2026.
- ₹13,500 Cr IMRH nears CCS approval Sep 2
Costing committee cleared ₹13,500 crore for Indian Multi-Role Helicopter design development phase. CCS approval expected soon for the 13-tonne class helicopter to replace Mi-17 fleet.
- Aravalli engine contract signed Aug 26
HAL and Safran signed final contract with 50:50 JV SAFHAL for 3,500-4,000 shp Aravalli engine, covering design through lifecycle support. Manufacturing at Tumakuru, Karnataka.
- Strong Q1 FY27 beat Aug 20
Net profit rose 14.7% YoY to ₹1,580 Cr, revenue up 14.4% to ₹5,515 Cr, EBITDA up 18.8% to ₹1,529 Cr. EBITDA margin expanded to 27.7% vs 26.6% YoY, beating estimates across all metrics.
- ₹62,700 Cr Prachand LCH contract Aug 17
MoD ordered 156 Prachand LCH (66 IAF, 90 Army) worth ₹62,700 Cr with 2028-2033 delivery. HAL outsources fuselage to Adani Defence (42 units) and BEML (48 units) while retaining full integration.
- ₹10 dividend, new CMD appointed Aug 28
63rd AGM approved ₹10 final dividend and appointment of Ravi K as Chairman and Managing Director.
- Russia-India Il-114-300 jet deal Sep 10
Russia and India signed deal for 105 Il-114-300 turboprop aircraft per TASS. HAL is associated with the procurement, reflecting continued bilateral defence cooperation.
- Kremlin confirms Su-57 sale talks Sep 8
Kremlin spokesperson confirmed Su-57 fighter jet sale to India is on the bilateral agenda. No contract details or timeline disclosed.
- New independent director appointed Sep 10
Dr. Nikhil Agarwal appointed as additional independent director for three years effective September 9, 2026, subject to shareholder approval.
- Statutory auditor appointed for FY27 Sep 8
M/s B K Ramadhyani & Co. LLP appointed as statutory auditors for FY2026-27 by the Comptroller and Auditor General of India.
- Samtel-HAL avionics facility opened Aug 27
SHDS JV inaugurated India's first defence avionics facility in Gurugram. Expected to post ₹200 Cr turnover this year, targeting ₹400-500 Cr in 3-4 years.
- SAFHAL Aravalli contract formalized Aug 26
HAL and Safran signed final contract with SAFHAL JV for Aravalli engine covering design, development, manufacture and lifecycle support for IMRH and DBMRH platforms.
- Dormant JV Infotech HAL dissolved Aug 20
NCLT dissolved dormant 50:50 JV with Cyient. Zero financial impact as HAL had written down investment to ₹33.73 lakh book value.
- CSR policy updated Sep 4
HAL revised its Corporate Social Responsibility Policy, now available on the company's investor relations website.
TL;DR: HAL is firing on multiple cylinders with a massive ₹1.1L Cr ALH approval, ₹62,700 Cr Prachand LCH contract, strong Q1 results (14.7% profit growth, 27.7% EBITDA margin), and the Aravalli engine programme advancing with Safran. The primary risk remains GE F404 engine supply delays constraining Tejas Mk1A deliveries (only 10 of 99 engines received, zero aircraft delivered), alongside emerging competition from private players in the AMCA programme. The trend is improving as engine deliveries accelerate and order visibility strengthens to ~$48B decadal pipeline, with Mk1A delivery commencement in H2 2026 as the key near-term catalyst.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 3,915 | 5,636 | 6,061 | 14,769 | 4,348 | 5,976 | 6,957 | 13,700 | 4,819 | 6,629 | 7,699 | 13,942 | 5,515 |
| Expenses | 3,039 | 4,108 | 4,626 | 8,867 | 3,357 | 4,336 | 5,275 | 8,405 | 3,537 | 5,071 | 5,828 | 8,884 | 3,988 |
| Operating Profit | 877 | 1,528 | 1,435 | 5,901 | 991 | 1,640 | 1,683 | 5,295 | 1,282 | 1,558 | 1,871 | 5,059 | 1,527 |
| OPM % | 22% | 27% | 24% | 40% | 23% | 27% | 24% | 39% | 27% | 24% | 24% | 36% | 28% |
| Other Income | 414 | 474 | 467 | 569 | 742 | 560 | 637 | 669 | 757 | 895 | 927 | 1,164 | 912 |
| Interest | 0 | 0 | 0 | 31 | 0 | 0 | 0 | 8 | 0 | 0 | 1 | 4 | 0 |
| Depreciation | 201 | 350 | 212 | 644 | 149 | 178 | 277 | 736 | 185 | 226 | 310 | 634 | 304 |
| PBT | 1,089 | 1,651 | 1,689 | 5,795 | 1,584 | 2,023 | 2,042 | 5,219 | 1,854 | 2,227 | 2,487 | 5,584 | 2,134 |
| Tax % | 25% | 25% | 25% | 26% | 9% | 25% | 30% | 24% | 25% | 25% | 25% | 25% | 26% |
| Net Profit | 814 | 1,237 | 1,262 | 4,309 | 1,437 | 1,510 | 1,440 | 3,977 | 1,384 | 1,669 | 1,867 | 4,196 | 1,590 |
| EPS in Rs | 12.17 | 18.49 | 18.86 | 64.43 | 21.49 | 22.59 | 21.53 | 59.46 | 20.69 | 24.96 | 27.91 | 62.74 | 23.77 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 15,939 | 16,758 | 17,950 | 18,520 | 20,008 | 21,445 | 22,755 | 24,620 | 26,927 | 30,381 | 30,981 | 33,089 | 33,785 |
| Expenses | 13,560 | 14,285 | 14,719 | 15,071 | 15,457 | 16,531 | 17,397 | 19,205 | 20,242 | 20,630 | 21,360 | 23,301 | 23,771 |
| Operating Profit | 2,379 | 2,474 | 3,231 | 3,449 | 4,551 | 4,914 | 5,357 | 5,415 | 6,686 | 9,752 | 9,621 | 9,788 | 10,014 |
| OPM % | 15% | 15% | 18% | 19% | 23% | 23% | 24% | 22% | 25% | 32% | 31% | 30% | 30% |
| Other Income | 1,650 | 1,608 | 1,058 | 776 | 376 | 423 | 365 | 985 | 1,673 | 1,923 | 2,608 | 3,743 | 3,897 |
| Interest | 15 | 6 | 16 | 35 | 178 | 360 | 267 | 65 | 64 | 43 | 22 | 24 | 6 |
| Depreciation | 822 | 863 | 681 | 947 | 1,025 | 999 | 1,178 | 1,111 | 1,785 | 1,407 | 1,340 | 1,355 | 1,474 |
| PBT | 3,191 | 3,213 | 3,592 | 3,243 | 3,725 | 3,979 | 4,277 | 5,225 | 6,510 | 10,225 | 10,867 | 12,152 | 12,432 |
| Tax % | 25% | 38% | 27% | 39% | 37% | 28% | 24% | 3% | 10% | 25% | 23% | 25% | — |
| Net Profit | 2,399 | 2,004 | 2,625 | 1,990 | 2,328 | 2,883 | 3,239 | 5,080 | 5,828 | 7,621 | 8,364 | 9,116 | 9,321 |
| EPS in Rs | 24.89 | 27.72 | 36.3 | 29.76 | 34.82 | 43.1 | 48.44 | 75.96 | 87.14 | 114 | 125 | 136 | 139 |
| Div. Payout % | 20% | 31% | 30% | 54% | 28% | 39% | 31% | 26% | 32% | 31% | 32% | 33% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 482 | 362 | 362 | 334 | 334 | 334 | 334 | 334 | 334 | 334 | 334 | 334 |
| Reserves | 16,322 | 10,671 | 12,198 | 9,177 | 11,748 | 12,914 | 15,078 | 18,979 | 23,238 | 28,804 | 34,647 | 40,707 |
| Borrowings | 165 | 80 | 1,022 | 905 | 4,116 | 5,927 | 51 | 49 | 52 | 50 | 51 | 66 |
| Other Liabilities | 47,370 | 45,420 | 38,163 | 38,047 | 35,298 | 35,027 | 37,815 | 40,892 | 45,652 | 51,723 | 73,665 | 93,288 |
| Total Liabilities | 64,339 | 56,532 | 51,744 | 48,463 | 51,496 | 54,203 | 53,278 | 60,254 | 69,276 | 80,911 | 1,08,698 | 1,34,395 |
| Fixed Assets | 7,366 | 6,925 | 7,350 | 7,566 | 7,459 | 7,357 | 7,491 | 6,766 | 6,834 | 6,737 | 6,671 | 7,293 |
| CWIP | 235 | 1,025 | 1,389 | 1,462 | 1,502 | 2,043 | 2,078 | 2,473 | 1,885 | 2,493 | 3,098 | 3,313 |
| Investments | 570 | 916 | 994 | 1,010 | 910 | 991 | 1,056 | 1,363 | 1,458 | 1,591 | 1,754 | 1,914 |
| Other Assets | 56,168 | 47,666 | 42,011 | 38,425 | 41,625 | 43,812 | 42,654 | 49,653 | 59,099 | 70,089 | 97,176 | 1,21,875 |
| Total Assets | 64,339 | 56,532 | 51,744 | 48,463 | 51,496 | 54,203 | 53,278 | 60,254 | 69,276 | 80,911 | 1,08,698 | 1,34,395 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | — | — | -404 | -748 | -7,700 | 1,527 | 15,263 | 10,173 | 8,830 | 8,223 | 13,643 | 10,906 |
| Investing | — | — | 3,012 | 597 | 5,294 | -1,339 | -1,271 | -12,785 | -5,728 | -6,410 | -10,771 | -8,337 |
| Financing | — | — | -164 | -2,540 | 2,326 | 64 | -7,125 | -1,464 | -1,731 | -1,999 | -2,579 | -3,350 |
| Net Cash Flow | — | — | 2,443 | -2,691 | -80 | 252 | 6,867 | -4,076 | 1,370 | -186 | 294 | -781 |
| Free Cash Flow | — | — | -1,907 | -2,000 | -9,094 | 148 | 13,947 | 8,676 | 7,054 | 6,476 | 11,890 | 8,438 |
| CFO/OP | — | — | 20 | 22 | -145 | 68 | 298 | 207 | 173 | 105 | 179 | 142 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 144 | 105 | 86 | 133 | 227 | 191 | 90 | 69 | 64 | 55 | 55 | 45 |
| Inventory Days | 1,104 | 1,016 | 879 | 870 | 881 | 815 | 605 | 607 | 527 | 544 | 736 | 859 |
| Days Payable | 103 | 91 | 64 | 72 | 113 | 163 | 76 | 96 | 116 | 116 | 156 | 116 |
| Cash Conversion Cycle | 1,145 | 1,030 | 900 | 931 | 995 | 843 | 620 | 580 | 475 | 484 | 634 | 788 |
| Working Capital Days | 39 | -5 | 74 | 101 | 221 | 185 | 141 | 111 | 38 | 37 | 121 | 301 |
| ROCE % | — | 23% | 29% | 27% | 29% | 24% | 26% | 30% | 31% | 39% | 34% | 32% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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63 extracted metrics + investor summaries across FY10–FY26.
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Company Information
Hindustan Aeronautics Ltd (HAL), a 71.64% Government-owned Maharatna CPSE, designs, manufactures, upgrades and provides lifecycle MRO for aircraft, helicopters, aero-engines, avionics/accessories and aerostructures, principally for India’s armed forces.[1]
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