Big wager by HAL on India's military future worth ₹2.5 Trillion revealed

Hindustan Aeronautics Limited (HAL), India's major defense public sector company, has recently been conferred the Maharatna status, solidifying its position as a defense behemoth. In the financial year 2024-25, HAL demonstrated strong shareholder returns with a final dividend of ₹15 per share, payable after shareholder approval.

HAL's latest achievements include the manufacturing and assembly of the Tejas Mk-1A fighter jet, with an order book worth around ₹62,000 crore. The Indian Air Force is phasing out older MiG-21 jets by replacing them with Tejas, which is more agile and better equipped.

The company has expanded its product portfolio beyond helicopters and fighter jets, working on jet engines, satellite structures, and the CATS Warrior UAV as part of India's drive towards self-reliance in defense manufacturing. HAL has secured significant contracts recently, including 240 Sukhoi engines worth ₹25,500 crore and 12 Su-30MKI fighters worth ₹13,454 crore.

Production capacity is being ramped up with new facilities such as a dedicated Nashik production line aiming to produce 24 Tejas aircraft annually. HAL plays a growing role in India's space ambitions, notably through involvement with the Small Satellite Launch Vehicle (SSLV) program.

However, HAL faces operational challenges, especially meeting delivery timelines. The initial order of 83 Tejas Mk-1A jets experienced delays due to engine supply bottlenecks related to GE Aerospace, although this has improved with a steady supply of GE F404-IN20 engines now arriving at two per month.

HAL has also faced delays with indigenous components, such as the Uttam AESA radar, prompting the pragmatic interim use of radar systems sourced from Israel's ELTA to keep production on track. Recent quarterly financial results show a significant drop in revenue and profit after tax in Q1 FY 2025-26 compared to Q4 FY 2024-25.

As of March 2025, HAL’s total order book stood at approximately ₹1.89 lakh crore, covering projects over the next six to seven years. New orders worth ₹1.25 lakh crore have been won during the current fiscal year, underscoring ongoing demand and confidence in HAL’s capabilities.

HAL closed Q1FY26 with ₹4,819 crore in revenue and an order book of ~₹1,89,302 crore in March 2025. Almost 90% of HAL's revenues come from the defense ministry contracts. HAL aims to deliver at least 12 Mk1As by 2025 end supported by its new assembly line in Nashik.

HAL's Advanced Light Helicopters were part of the Indian Navy's "Operation Sindoor" exercises in early August 2025. HAL is influencing the future of unmanned drones in India with its CATS Warrior, a "loyal wingman" drone. The company's return on capital employed is ~33.9% and the return on equity is ~26.1%.

In summary, HAL is currently a cornerstone of India’s aerospace and defense sector, with growing production capabilities and a robust order pipeline, including major indigenous programs like the Tejas fighter and involvement in space launch vehicles. However, it must continue addressing supply chain and technology sourcing challenges to meet ambitious delivery schedules and maintain its financial momentum. Its Maharatna status reflects both its size and strategic importance in India’s defense industrial base.