On a humid morning in Bengaluru, a sleek Tejas fighter glistens under the hangar lights at Hindustan Aeronautics Limited’s production line.
Just a few feet away, engineers crowd over the fuselage of a Dhruv helicopter, while in another bay, technicians fit gears for a satellite mission.
This isn’t the Hindustan Aeronautics of old, the public-sector pillar building a line of helicopters and licensed fighters. This is HAL 2.0.
An aerospace and defence giant whose portfolio includes everything from hypersonic-capable jets, loyal wingman drones, home-grown aero-engines, to satellite bus structures.
Yes, the Dhruv and Prachand still make the headlines. But HAL works with almost every tactical platform that India will fly, fight, or launch in the coming decades.
This change mirrors a larger national project, India’s race for defense independence. Where ruling the skies, conquering space, and possessing critical supply chains are as much about India’s reign as they are about engineering.
From Rotor Blades to Runways
In early August 2025, as the Indian Navy’s “Operation Sindoor” exercises lit up the Arabian Sea, a familiar name kept surfacing, Hindustan Aeronautics Limited.
HAL’s Advanced Light Helicopters were part of the drills, but the conversation inside defence circles wasn’t just about copter blades. It was about a company that had quietly transformed into something bigger.
For decades, HAL was seen as the hard-working PSU that built India’s helicopters and overhauled its fighters.
But today, its assembly lines hum with projects ranging from the Tejas Mk1A fighter jet to the CATS Warrior UAV, from jet engines to satellite structures.
This expansion is no accident. It’s part of India’s bid for tactical self-sufficiency to ensure no foreign supplier can affect its defense readiness.
It was declared a Maharatna in October 2024, becoming the first defence public sector unit and 14th CPSE to achieve this status.
And this change is reflected in the numbers. HAL closed Q1FY26 with ₹4,819 crore in revenue and an order book of ~₹1,89,302 crore in March 2025.
The company has won new orders worth ₹1,25,280 crore during the year. This order book has given the company a line-up for the next six to seven years.
For a company that once survived on Ministry of Defense (MoD) tenders, that’s a calculated leap.
The Fighter Jet Factory
The jewel in HAL’s crown today is the Light Combat Aircraft (LCA) Tejas Mk1A program. The ₹48,000 crore order for 83 jets, signed in 2021, is in full swing. But the road hasn’t been smooth.
For most of 2024, deliveries stalled as General Electric’s F404 engine shipments slowed. This year, that bottleneck has eased a little.
GE will supply two engines a month until March 2026, with the first batches included in the production line. HAL now aims to deliver at least 12 Mk1As by 2025 end supported by its new assembly line in Nashik.
What’s next? A follow-on order for 97 more Mk1A jets, worth roughly ₹62,000 crore, has just been confirmed by the government of India. HAL will be building Tejas fighters into the early 2030s, enough for 11 squadrons of the Indian Air Force.
Meanwhile, the contracts to upgrade the Jaguar and Hawk fleets also contribute to HAL’s service revenue.
Enter the Wingman
While fighters dominate headlines, HAL is also influencing the future of unmanned drones in India. It’s CATS Warrior, a “loyal wingman” drone is designed to fly beside manned aircraft.
The CATS Warrior can extend strike range, carry precision weapons, and act as a distraction in disputed airspace. The project was shown at Aero India, and its prototype is now being refined.
Training is not behind either. The HTT-40 basic trainer aircraft is bridging the gap with the Air Force contract for over 70 units.
HAL’s trainers will change obsolete systems, adding to India’s pilot pipeline for decades. Moreover, the manufacturing units in Bengaluru and Nashik are being expanded to meet the Air Force’s timeline.
Powering the Fleet
HAL’s revolution isn’t just about airframes, it’s about engines. Its engine division manufactures and refurbishes powerplants for the Sukhoi-30MKI, Tejas, and multiple helicopter types.
It has won contracts for 240 Sukhoi engines worth ₹25,500 crore and 12 Su-30MKI fighters worth ₹13,454 crore (including airframe and engine work) from the Ministry of Defense as per a press release on 9th Sept 2024.
Beyond contracts, HAL has signed contracts with Safran Aircraft Engines (SAE) for the production of the LEAP engine’s rotating parts at the 55th Paris Air Show in June this year.
The home-grown engine plans are slowly maturing, and this ability is crucial for India. The GE delay on Tejas showed how a sole supplier issue can affect the entire defence calendar.
From the Air to the Stars
HAL’s abilities stretch beyond defense equipment. The company also supplies satellite bus structures and hardware for ISRO missions, including launch vehicle integration work.
Moreover, HAL runs Maintenance, Repair, and Overhaul (MRO) facilities that service both defense and commercial aircraft.
While its contribution to revenue may be small, the MRO is tactically valuable. It has stopped foreign Original Equipment Manufacturers from dominating the after-sales in India’s aeronautics market.
The Global Footprint
From the Indian Ocean to Latin America, HAL aircraft are in service. Countries like Mauritius and Ecuador operate Dhruv helicopters; others have bought spares, upgrades, and components.
The export book includes building aircraft structures for Boeing and Honeywell engines, pitching Maritime helicopters to the Philippines, and light fighters to Argentina and Egypt.
It may not have won Malaysia’s 2023 fighter tender, but HAL has since worked on its export strategy. It now offers packages that include platform supply, training, and long-term maintenance.
The Numbers Behind the Machines
Behind the metal and composites lies a healthy balance sheet. The revenue for Q1FY26 was ₹4,819 crore, the price-to-earnings ratio ~36x, the return on capital employed ~33.9% while the return on equity is ~26.1%.
The stock price grew at a compounded rate of 60% in the last three years, while the profit grew 18% for the same period.
The revenue mix is changing. Copters may still matter, but the fixed-wing aircraft and engine segment is growing faster. Exports, though small, are rising.
Challenges in the Slipstream
For all its shiny hangars and growing order book, Hindustan Aeronautics’ trip has not been without issues.
1. Government Supervision
HAL’s destiny is tied to the Government of India, its major customer. Almost ~ 90% of HAL’s revenues come from the defense ministry contracts.
These orders can indicate a constant demand for HAL’s products. However, its production schedules and cash flows can be affected due to budget delays, changes in the government, and its procurement priorities.
2. Weak Supply Chains
The Tejas Mk1A rollout delay in 2024 wasn’t because HAL’s team lacked skill. It was because they did not have the engines to build the aircraft.
The dependence on a few foreign sellers like GE for fighter engines and Safran for helicopter powerplants means any geopolitical setbacks, export limitations, or quality-control blocks can turn into months of delay.
3. The Need for Innovation
Globally, mainstays of aerospace like Lockheed Martin or Dassault invest 10–12% of revenue in R&D. However, India’s defence industry invests about 1–1.5%.
HAL invests about ~9% compared to its peers in R&D, but the gap with global players exists. Moreover, this gap amplifies when it comes to stealth, AI-based drones, and advanced propulsion systems.
Without continuous and increasing research and development, HAL may become a follower instead of the leader it has planned for.
4. Growing Private Players’ Share
L&T Defence, Adani Defence & Aerospace, and Tata Advanced Systems, India’s private players, are no longer minor suppliers. They’re mature businesses and exporters.
With the government encouraging private manufacturing through initiatives like the Strategic Partnership Model, HAL must adapt from being a PSU-monopoly to an agile, co-operative market player, without reducing its quality or profits.
5. Scaling Infrastructure Without Losing Control
An order book over ₹1.85 lakh crore may be a blessing, but to reach HAL’s own ₹3 lakh crore target by 2030 means more than building bigger factories.
The goal needs digital manufacturing lines, robust logistics, cutting-edge composite production, and skilled personnel. But HAL’s current facilities, those from the 1960s, are still being updated.
However, the speed of modernisation must match the demand surge to avoid production blocks.
6. Export Market Uncertainties
Defence exports are as much about negotiations as engineering. While HAL’s Dhruv copters and Do-228 aircraft have found buyers, entering new markets means dealing with offset agreements, funding terms, and local assembly requirements.
Add to that the competition from well-known defense suppliers like Russia or the US. And HAL’s export ambitions will need industrial skill and geopolitical diplomacy.
In short, HAL’s runway is long, but so are the crosswinds. The next decade will test whether the company can change from a well-known government contractor to a competitive aerospace leader.
Is HAL Cleared for a Long-Term Takeoff?
HAL isn’t just manufacturing hardware; it’s propping up India’s aerospace drive. Across skies and space, HAL stands tall.
India’s domestic defense production soared to ₹1.50 lakh crore in FY25, strengthening HAL’s platform-led growth. India aims to grow exports to ₹50,000 crore by 2029, as per DRDO Chairman Samir V Kamat.
The defense market is expected to reach $37.57bn by 2030, while India’s space sector is expected to reach $44 bn by 2033. India expects to increase its contribution to the global space economy from the current 2-3% to 8% by 2030, as per NEXT IAS.
And HAL is uniquely situated to ride that wave. With an order book that guarantees multi-year production, solid global associations, and increasing exports, HAL has rare enterprise firmness. For investors, that’s potential tactical value past short-term instability.
Disclaimer
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information.
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Archana Chettiar is a writer with over a decade of experience in storytelling, and, in particular, investor education. In a previous assignment, at Equentis Wealth Advisory, she led innovation and communication initiatives. Here she focused her writing on stocks and other investment avenues that could empower her readers to make potentially better investment decisions.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
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