New CMD Ravi Kota replaces D.K.

Q4 gross margins jumped to ~63% — what drove this? What were platform deliveries in FY24? And what is the status of UHM and AL-31FP engine orders?

Q4 margin improvement: Change Order 3 on LCA IOC contract (20 aircraft delivered to IAF) — pending contractual price claims finalized in Q4 FY24, adding Rs.1,500 crore to Q4 revenue. Additionally, HTT-40 amortization (Rs.600 crore) was a FY23 expense not repeated, and an impairment loss on Sukhoi (Rs.300 crore) not repeated — these two together saved ~Rs.900 crore in costs vs FY23. FY24 deliveries: ~5 LCA (Mark 1A), 6 ALH, 2 Dornier (to Guyana), 15 RD-33 engines. ROH at ~Rs.20,000 crore (68% of revenue). UHM: Being developed with Rs.2,000 crore internal HAL funding. Jayadeva: In advanced stage of proving blade folding and assisted deck-landing features. Deliveries expected from FY26-27. Commercial contract expected in 2 years. AL-31FP 240 engines: CNC completed on HAL side. Order in final approval stages — expected within next 1-2 months.

How does LCA Mark 1A production ramp for 83+97 numbers? With 6-7 major platforms (LCA, LCH, ALH, HTT-40, LUH, AL-31FP, RD-33) all entering production in FY26-27 — is there a bunching risk? And what are EBITDA margin expectations for next 2-3 years?

LCA production ramp: Current capacity 16/year from Bangalore. Nashik third line operational by October 2024 — adds 8 aircraft/year, so 24 total. Private sector (wings from L&T, fuselage from VEM, etc.) adds further capacity. Target: deliver 83 Mark 1A by 2032-33 then take 97 at faster rate. No bunching risk: Each platform has independent dedicated facilities at different locations. Helicopter complex Bangalore: 30 units. Tumkuru factory: 30 additional. LCA: Bangalore two lines (16) + Nashik (8). HTT-40 at Nashik. Sukhoi at Nashik. Engine programs at Koraput. All simultaneously executable. EBITDA margins next 2-3 years: Operating profit 18-20%, D&A 5-7%, interest income ~6%. EBITDA at optimistic 32-33%, minimum 29%. Without interest income: 26-27%.

With order book growing from Rs.94,000 crore to potentially Rs.1,20,000 crore, is consistent early double-digit growth possible for next 3-4 years? ROH share has dropped from 70%+ to 68% — how much further will manufacturing proportion grow? And LCA Mark 2 timeline — was FY25 prototype mentioned earlier?

Yes, consistent double-digit growth is achievable through 2032 with current order book and pipeline. The workload is fully visible through 2032. Revenue mix evolution: ROH 68% now; in 3 years targeting approximately 60% ROH / 40% manufacturing. In absolute terms ROH growing 8-9%; manufacturing growing 15-18%. The combined blended growth sustains double-digit. LCA Mark 2 timeline: Jayadeva: Structural assembly has commenced at HAL. Aircraft to be rolled out and ready for flight around March 2026. We will target first flight around then. Certification typically 3 years thereafter.

LCA Mark 1A 16 deliveries in FY25 — is there any critical subsystem risk? And what are the indigenization milestones as we go from 83 to 180 aircraft?

On 16 deliveries FY25: There are certain supply-side challenges on specific LRUs given geopolitical situation, but we are working on them. Confident that all LRUs will be available in time for planned deliveries. Jayadeva on indigenization: From aircraft #42 onwards, planning to integrate indigenous Uttam AESA radar and Rakshak Kavach (electronic warfare suite) — significantly increasing indigenous content vs imported alternatives in Mark 1. Additional actuators and other LRUs are also already indigenized in Mark 1A vs Mark 1. By aircraft #180, indigenous content expected at 65%+ (up from current ~45-50% range).

There's news that HAL is entering commercial MRO through Airbus arrangement. Can you share timeline, scope, market size, and margin expectations?

Jayadeva: We are entering civil MRO at Nashik facility — Airbus A320 C-checks as starting point. Already entered working arrangement with Airbus. Certifications being pursued — DGCA first, then EASA. Contract with Airbus already signed. This will take shape in a bigger way in years to come. Something definite expected in FY25 or FY26. This is an early-stage strategic initiative; revenue contribution will scale over time.

How much was exports as percentage of FY24 sales? And what is HAL's role in government's defense export target of Rs.60,000 crore from current Rs.20,000 crore?

Exports FY24: Rs.311 crore, approximately 1-1.5% of revenue — currently negligible. But export efforts have been ramped up significantly only in last 2-3 years (previously domestic focus only). Today we have a wide range of indigenous platforms (ALH, LCH, LUH, LCA, HTT-40, Dornier) available for export — not possible before as we were in licensed production. Active discussions with Philippines, Argentina, Nigeria, Egypt. Expect breakthrough export order in current financial year (FY25). Export sector expected to become globally competitive in 2-3 years. HAL will play a significant role in India's Rs.60,000 crore export target.

GE F414 deal — what level of technology transfer does HAL get? What about engine export opportunities with GE and Safran partnerships?

GE F414 TOT: HAL gets 80% technology transfer for manufacturing in India; 20% sourced directly from GE. This is for LCA Mark 2 production (powering approximately 220-250 aircraft eventually). Specific technologies are still being worked out and are classified — more detail when contract signed. Engine exports: Safran partnership is for IMRH engine (jointly developed, IPR remains in India) — export possible without GE-type restrictions. For GE F414-based exports, need case-by-case GE permission. Both partnerships primarily for domestic consumption at this stage but export opportunities will come when available.

LUH status — have we started booking revenue for the 8 aircraft built on LOI? When is 12-unit limited series contract expected and bulk order after? AL-31FP delivery when after order? And development sales/orders quantum in FY24?

LUH: Facility created, 8 aircraft manufactured on proactive basis. CNC and activities for 12-unit limited series order over. Contract expected to be concluded soon — deliveries expected in current financial year (FY25). Revenue not yet booked as operating on LOI. Larger bulk order (175 additional expected) will follow in approximately 2-year timeframe after limited series execution. AL-31FP delivery: Since AON and RFP process started a year back, HAL has proactively placed kit orders with Russians. Contract signing triggers delivery within FY24-25 itself — not waiting T+12 or T+18 months. Development sales FY24: Rs.1,500 crore (~5% of revenue). Outstanding development orders: ~Rs.900 crore.

What is the revenue growth expected for FY25 and step-up in FY26-27? And how will GE's TOT commercial terms be structured — one-time payment or royalty?

Revenue growth: Manufacturing segment 15-18% growth; ROH 9-10% growth. Blended overall: sustaining the double-digit growth trajectory achieved in FY24. FY25 and beyond should continue at double-digit. GE commercial terms: Premature to discuss — commercial discussions with GE not yet commenced. Will clarify in next 6 months once commercial offer received. Could be one-time payment (capitalized) or royalty (expensed) — cannot say yet.

The Rs.47,000 crore order guidance for FY25 — does it include MRO orders? And is 97 LCA Mark 1A order likely by Q4 FY25? Also, is the EBITDA margin guidance of 26-27% excluding any provision reversals?

Rs.47,000 crore order guidance is manufacturing only — correct, does NOT include MRO/ROH which is Rs.20,000 crore additional annual accretion. 97 LCA Mark 1A: Things are moving toward conclusion before March 31, 2025. We expect it to materialize in the current financial year. EBITDA margin guidance: The 26-27% refers to operating margin plus D&A plus interest income = the normalized EBITDA level. This does not rely on major provision reversals. Normal year-on-year provision movements will continue but no outsized reversals expected that would inflate margins.