Defence Stock in Focus as Govt to Purchase Helicopters and Aircraft from the Co.

Synopsis: The government approved ₹400 crore aircraft purchases from Hindustan Aeronautics Limited and expanded the UDAN scheme to boost regional connectivity with new airports and helipads across India.

This Maharatna Defence Stock, engaged in designing, manufacturing, and maintaining aircraft, helicopters, engines, and aerospace systems for defence, civil aviation, and export markets globally, is in focus after government plans Rs. 400 Crore Helicopters and Aircraft purchase under UDAN scheme.

With a market capitalization of Rs. 2,40,575.09 crore, the shares of Hindustan Aeronautics Limited were currently trading at Rs. 3,597.25 per equity share, down nearly 1.98 percent from its previous day’s close price of Rs. 3,670.05. 

What is the News?

The Union Cabinet has approved a proposal to purchase two helicopters and two aircraft from Hindustan Aeronautics Limited under the modified UDAN scheme, with a total cost of Rs. 400 crore. This includes two Dhruv helicopters for Pawan Hans and two Dornier aircraft for Alliance Air. The aim is to improve connectivity in remote and difficult areas where smaller aircraft are required.

The government has also extended the UDAN scheme for 10 years with a total outlay of Rs. 28,840 crore. Under this plan, 100 new airports will be developed with an investment of Rs. 12,159 crore. Additionally, 200 modern helipads will be built at a cost of Rs. 3,661 crore to further strengthen regional connectivity.

Defence Order for Armed Forces

Hindustan Aeronautics Limited has a strong defence order book, including 34 Dhruv helicopters, 180 LCA Tejas Mk-1A aircraft, and 156 Prachand helicopters for the armed forces. The company also confirmed that five Tejas jets are ready for delivery to the Indian Air Force. 

In 2021, the Defence Ministry signed a Rs. 48,000 crore deal for 83 Tejas Mk-1A jets, though deliveries are delayed due to engine supply issues from GE Aerospace. HAL is currently executing projects worth Rs. 2.22 lakh crore, with deliveries scheduled up to March 2034.

Order Book Details

Hindustan Aeronautics Limited has seen a strong improvement in its order book, which increased to Rs. 1,89,300 crore compared to Rs. 94,127 crore in the previous year. This growth is mainly driven by major manufacturing contracts, including 240 AL-31FP engines for Sukhoi-30 worth Rs. 25,500 crore, 156 Prachand helicopters worth Rs. 62,777 crore, and 12 Sukhoi-30MKI aircraft valued at Rs. 13,454 crore, along with other upgrade programs.

In addition, the company received repair and overhaul (ROH) orders worth Rs. 19,271 crore, design and development orders of Rs. 3,180 crore, and export orders worth Rs. 493 crore. Looking ahead, HAL has a strong order pipeline of around Rs. 1 lakh crore, which is expected to convert into confirmed orders over the next one to two years, supporting future growth.

Company Overview

Hindustan Aeronautics Limited (HAL) is an Indian aerospace and defense manufacturing company headquartered in Bengaluru, Karnataka. A public sector enterprise under the Ministry of Defence, it designs, develops, manufactures, and services aircraft, helicopters, engines, avionics, and related systems. In October 2024, HAL was elevated to Maharatna status, enhancing its operational and financial autonomy

Recent Quarter Results

Coming into financial highlights, Hindustan Aeronautics Limited’s revenue has increased from Rs. 6,957 crore in Q3 FY25 to Rs. 7,699 crore in Q3 FY26, which has grown by 10.67 percent. The net profit has also grown by 29.65 percent from Rs. 1,440 crore in Q3 FY25 to Rs. 1,867 crore in Q3 FY26. Hindustan Aeronautics Limited’s revenue and net profit have grown at a CAGR of 7.64 percent and 23.74 percent, respectively, over the last five years.

In terms of return ratios, the company’s ROCE and ROE stand at 33.9 percent and 26.1 percent, respectively. Hindustan Aeronautics Limited has an earnings per share (EPS) of Rs. 133, and its almost debt-free company.

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