HAL Shares Soar 2% on ₹13500 Crore Su-30MKI Deal

India boosts air force with indigenous Su-30MKI jets

HAL Shares Soar 2% on ₹13500 Crore Su-30MKI Deal India has finalized a significant Rs 13,500 crore agreement with Hindustan Aeronautics Limited (HAL) for the production of 12 advanced indigenous Su-30MKI fighter jets. This initiative, signed on December 12, 2024, strengthens the Indian Air Force (IAF) and aligns with the Aatmanirbhar Bharat vision of self-reliance.

The new jets, incorporating 62.6% indigenous content, will be manufactured at HAL’s Nasik facility, with components sourced from Indian defense partners. This deal also complements the “Super Sukhoi” upgrade program, which aims to modernize 84 Su-30MKIs, enhancing their effectiveness in contemporary combat scenarios.

Key enhancements for the Su-30MKI include:

• AESA Radar: Advanced target tracking and situational awareness.
• Digital Avionics: Upgraded cockpit systems integrated with modern defense networks.
• Enhanced Weaponry: Compatibility with BrahMos cruise missiles, Astra BVR missiles, and precision munitions.
• Electronic Warfare Suite: Improved protection against radar and missile threats.
• Upgraded Engines: AL-31FP engines offering better performance at high altitudes.
• Data Link Systems: Real-time coordination with drones, AWACS, and ground stations.
• Indigenous Systems: Locally made mission computers and flight controls, reducing reliance on imports.

This acquisition addresses the IAF’s squadron strength challenges and demonstrates India’s commitment to bolstering its strategic defense capabilities.

HAL Shares Gain 2% Following ₹13,500 Crore Su-30MKI Jet Deal

HAL Shares Soar 2% on ₹13500 Crore Su-30MKI Deal  Hindustan Aeronautics Limited (HAL) shares rose 2% to ₹4,755 on the National Stock Exchange (NSE) in early trading on Friday after the Defence Ministry announced a ₹13,500 crore agreement to procure 12 Su-30MKI fighter jets.

The Ministry stated that these jets, with 62.6% indigenous content, will be manufactured at HAL’s Nasik facility. This move aligns with the government’s Aatmanirbhar Bharat initiative, aiming to bolster the Indian Air Force’s (IAF) operational capacity and enhance national defense readiness.

HAL recently secured another contract to upgrade the avionics of Dornier-228 Transport Aircraft, further strengthening the IAF’s capabilities. The company emphasized that the upgrade uses primarily indigenously designed avionics, marking another milestone in the self-reliance campaign.

Financial Performance
In Q2 FY25, HAL reported:

• Profit after tax (PAT): ₹1,510.49 crore, a 22% increase from ₹1,236.67 crore in the same quarter last year.
• Revenue from operations: ₹5,976.3 crore, up 6% year-on-year.
• EBITDA: ₹1,604 crore, with margins improving to 27.4% from 27.1%.
• Total expenses: ₹4,514 crore, up slightly from ₹4,458 crore.

HAL’s total assets grew to ₹86,529.75 crore as of September 2024, compared to ₹78,095.18 crore at the end of March 2024.

This development reinforces HAL’s role as a key player in India’s defense sector and its financial growth trajectory.

HAL Shares Soar 2% on ₹13500 Crore Su-30MKI Deal  In a significant boost to India’s defense capabilities, the Cabinet Committee on Security (CCS) has approved two major deals worth a combined ₹21,100 crore. These include the acquisition of 100 additional K-9 Vajra artillery guns and 12 Sukhoi-30MKI fighter jets.

K-9 Vajra Artillery Guns

The ₹7,600 crore contract for 100 K-9 Vajra self-propelled tracked guns has been cleared, adding to the 100 units already inducted through a joint venture between L&T and South Korea’s Hanwha Defence. Initially designed for desert warfare, some of the earlier K-9 units have been deployed in high-altitude areas like eastern Ladakh, equipped with “winterised kits” to operate effectively in sub-zero temperatures. The new batch of guns, with a strike range of 28-38 km, will also include these winterised modifications. These artillery systems feature 60% indigenous content and address the Army’s need for long-range, high-volume firepower amid evolving security challenges.

Sukhoi-30MKI Fighter Jets

The ₹13,500 crore deal for 12 additional Su-30MKI fighter jets was signed by the Ministry of Defence (MoD) with Hindustan Aeronautics Limited (HAL). These jets, with 62.6% indigenous content, will be manufactured at HAL’s Nashik division. They are intended to replace IAF jets lost in crashes over the years. The IAF currently operates 259 Su-30MKIs, which account for nearly half its combat fleet. The aircraft were originally produced by HAL under a licensing agreement with Russia.

Strengthening Air Capabilities

With only 30 active squadrons against the required 42, the IAF faces challenges in maintaining its operational readiness to counter threats from China and Pakistan. While the induction of 36 Rafale jets has enhanced capabilities, delays in the Tejas Mark-1A program have compounded the shortfall.

To address this, the government recently signed a ₹26,000 crore contract with HAL for 240 AL-31FP aeroengines, ensuring the Su-30MKI fleet remains operational. These engines will be manufactured at HAL’s Koraput division, with some components sourced from Russia.

An indigenous ₹63,000 crore upgrade plan for 84 Su-30MKIs is also in the pipeline. This “Super Sukhoi” project aims to equip the jets with advanced radars, avionics, longer-range weapons, and multi-sensor fusion, extending their service life by 30 years and bringing them closer to fifth-generation combat capabilities.

Additionally, 40 Su-30MKIs have already been modified to carry BrahMos supersonic cruise missiles, with the missile range extended to 450 km, further enhancing the IAF’s strike capabilities.

HAL Shares Soar 2% on ₹13500 Crore Su-30MKI Deal  Shares of Hindustan Aeronautics Limited (HAL) saw a positive market reaction on December 13, 2024, after the company announced a ₹13,500 crore deal with the Ministry of Defence for the procurement of 12 Su-30 MKI fighter jets.

Stock Performance
HAL’s stock opened at ₹4,754.50 and peaked at ₹4,755 in early trading. By 10:37 AM IST, it was trading at ₹4,677.80, reflecting a modest gain of ₹17.25 (0.37%).

Details of the Deal
The contract, signed on December 12, 2024, includes the procurement of 12 Su-30 MKI aircraft, with associated equipment, valued at ₹13,500 crore (inclusive of taxes and duties). The jets will feature 62.6% indigenous content, boosted by the indigenisation of many components produced by the Indian defense industry.

HAL’s Market Position
As of the latest updates, HAL’s market capitalization is ₹3.13 lakh crore, with a price-to-earnings ratio of 36.73. The company also offers a dividend yield of 0.75%. Its 52-week high is ₹5,674.75, while the low stands at ₹2,585. Over the past five days, HAL’s stock price has risen by ₹74.35 (1.61%), bringing it to ₹4,692.

HAL Shares Soar 2% on ₹13500 Crore Su-30MKI Deal  Shares of Hindustan Aeronautics Ltd. (HAL) will attract attention on December 13, 2024, following its agreement with the Ministry of Defence (MoD) to supply 12 Su-30MKI aircraft, a move that aligns with the government’s Aatmanirbhar Bharat initiative.

Details of the Deal
HAL will provide the Indian Air Force with 12 advanced Sukhoi jets, including associated equipment, for ₹13,500 crore. These aircraft will feature 62.6% indigenous content, achieved through the production of key components by the Indian defense industry. The jets will be manufactured at HAL’s Nasik division, enhancing the operational capabilities of the Indian Air Force and strengthening national defense readiness.

Market Outlook
UBS noted that HAL has secured ₹40,000 crore in manufacturing orders this year, including a ₹26,000 crore order for AL-31 FP engines. The brokerage expects more defense contracts in the upcoming quarter and has highlighted HAL as a top pick in the sector.

Financial Performance
HAL reported a 22.14% increase in net profit, reaching ₹1,510.49 crore for the September 2024 quarter, compared to ₹1,236.67 crore in the same period the previous year. Total revenue grew by 6%, reaching ₹5,976.3 crore from ₹5,635.7 crore in Q2 FY24.

HAL has been a key player in Prime Minister Narendra Modi’s push for self-reliance, securing major defense and manufacturing contracts.