Tejas helicopter and light fighter revenues are expected to continue to flow
By Vikas Gupta
Defence News of India, 2 Apr 22
Public sector aeronautics giant Hindustan Aeronautics (HAL) said on Friday that it recorded its highest revenue of over ~24,000 crore (provisional and unaudited) or 3.16 billion dollars, in fiscal year 2021-22 (FY22).
A statement from HAL said this represented a revenue growth of 6% over the previous year’s revenue of around 22,755 crores.
HAL’s record turnover was generated by the production of 44 new helicopters/aircraft, 84 new engines and the overhaul of 203 aircraft/helicopters and 478 engines.
HAL’s revenue increased steadily from ~19,700 crore in FY19 to above ~20,000 crore in FY20.
“Despite the challenges of the second wave of Covid-19 during the first quarter of the year and the resulting loss of production, the company was able to achieve the targeted revenue growth with improved performance during the period. balance of the year,” said R Madhavan, HAL’s President and CEO.
HAL said the second wave of Covid-19 forced it to declare a phased lockdown in various divisions in April and May 2021. Employees worked overtime in June and July 2021 to make up for lost working hours due to lockdown.
Based on the improved financial performance and cash flow position, rating agencies CARE Ratings and ICRA upgraded the company’s credit rating from AA+ Stable to AAA/Stable during the year.
On Wednesday, the Union cabinet authorized HAL to produce 15 light combat helicopters (LCHs) – 10 for the Indian Air Force (IAF) and five for the army – at a cost of around 3,887 crores , or about 260 crores per helicopter. The contract will also include the production of infrastructure worth around 377 crores.
After delivering the preliminary order for 15 helicopters, the IAF and Army jointly forecast a requirement of 162 LCHs – 65 for the IAF and 97 for the Army. Even without any price increases, this will provide HAL with a revenue stream of over ~42,120 crore.
However, HAL’s largest assured revenue stream in the coming decade is likely to come from manufacturing the Tejas Light Combat Aircraft (LCA). In March 2020, the Ministry of Defense (MoD) authorized an order of approximately 46,898 crore for 83 Tejas Mark-1A fighters, with delivery expected to begin within three years of signing the contract.
Until production of the Tejas Mark-1A begins, HAL will generate revenue through an ongoing contract to build 20 Tejas Mark 1 fighters in its Final Operational Certification (FOC) configuration.
Given the improved financial performance during the year, HAL finalized an interim dividend of approximately 40 per share, representing 400% of the par value of approximately 10 per share in FY22 .
