Concall — clean across the call.

On LCA Mark 1A: what delivery schedule over next 3 years? And on LCA Mark-2, where are we in F414 engine negotiations with GE — any renegotiation happening?

LCA Mark 1A: GE has resolved supply chain issues — first engine delivered April 2025, already fitted and tested. GE confirms 12 engines in CY2025 (11 more to come this year). With supply chain resolved, subsequent year deliveries should smooth out. Visibility: 12 aircraft ready this year; expect deliveries to continue in succeeding years. LCA Mark-2: Currently at manufacturing prototype stage. First flight expected in Q1 FY27. Engine situation: prototype engines available — no hold-up on prototype testing. For the F414 production TOT: actively engaging with GE on two tracks — technology transfer amount and pricing. Expect conclusion of F414 deal within this financial year (FY26). Mark-2 certification: flying from FY26, certification expected by FY29-30, production from FY30-31.

AL-31FP 240-engine delivery schedule? What is the current indigenization level? And will the PTC Industries MoU translate into actual orders?

AL-31FP 240 engines: Delivering at approximately 30 engines per annum. At that rate, the full order will be liquidated in 8 years. Currently indigenous content is approximately 57% — working to enhance through indigenization of raw materials, including with MIDHANI for key materials. This is an ongoing process. PTC Industries MoU: PTC specializes in titanium casting. HAL is already working with PTC and they are making parts for us. PTC has installed a new plant recently. Very happy that private sector is ramping up investment. PTC will become an important part of our supply chain and we will work more with them going forward.

What revenue growth should we expect in FY26 and FY27? And what is the EBITDA margin outlook?

Barenya Senapati: EBITDA margin guidance — we will maintain 31% at operating level (EBITDA excluding interest income). Including interest income, total EBITDA around 38-39%. Revenue growth guidance: approximately 8%. Could be 8-10% as some contract amendments in current and previous year need to be neutralized. Double-digit growth expected from next year (FY27) onwards. FY26 guidance is conservative at 8%; may end up being double-digit for FY26 as well. GE engine supply chain resolution enables 12 LCA deliveries contributing to top line.

LUH program has been delayed significantly. Is there a fundamental design change? When is the 12-unit limited series order expected? And on Sukhoi-30 upgrade — what is the timeline and potential order value?

LUH: No fundamental design change in aircraft structure or dynamics. IOC has been obtained. The delays are from a couple of issues related to flight control software and aircraft dynamics — mostly software-related. We expect to resolve these issues in current financial year (FY26). Already built 8 aircraft with internal funds. Once issues are solved, limited series order of 12 will be concluded, and deliveries can happen quickly since aircraft are already built. Sukhoi-30 upgrade: Very ambitious program — complete avionics replacement (radar to mission computers to displays). Government approvals expected this year. D&D part starting in next 6 months. IOC: 5 years. Aircraft order for 84 units (~Rs.60,000 crore) kicks in from 6th year onward. Fleet modification contract will start when D&D reaches maturity around year 5. So production order expected approximately 5 years from now.

How will the MRO business grow given HAL has 340 ALH and 250+ Sukhoi flying? With manufacturing scaling to 16+ LCA in coming years, could ROH margins be diluted? What was FY25 ROH number?

D.K. Sunil: ROH is a continuous business across our fleet — 340 ALH flying, 250+ Sukhoi-30 (extended to 2050), Jaguars extended to 2035, 150 Dorniers, and LCA Prachand just being added. First LCA overhaul comes in 2026. MiG-21 phase-out affects only a couple of squadrons — negligible impact. We do not see ROH going down. Barenya Senapati: ROH growing continuously at 5%, will accelerate as new platforms (LCA, ALH, LCH) mature. Not immediate jump in 1-2 years but will grow in subsequent years. Operating profit to revenue maintained at 27% — this will hold with the manufacturing/ROH mix we have.

What was the absolute delivery count in FY25 (aircraft + helicopters)? And can you explain the provisioning — Rs.804 crore seems high; is that the Sukhoi accident write-off? What will FY26 provisioning look like?

D.K. Sunil: FY25 deliveries approximately 14-15 total — 1 FOC LCA, 2 Dorniers, 5-6 helicopters. Year was difficult — double constraint from GE engine supply (LCA airframes ready but no engines) and ALH grounding post-accident. Both issues now resolved; FY26 deliveries will cover the shortfall. Barenya Senapati on provisioning: Rs.804 crore is NOT a write-off — it is a provision made prudently for the Sukhoi-30 accident aircraft. Discussions with Indian Air Force ongoing. Normal FY25 provisions of ~Rs.2,500 crore total (includes Rs.804 crore Sukhoi + usual liquidated damages, warranty, replacement provisions). FY26 provisions expected at similar level ±3-5%. The Sukhoi Rs.804 crore may not recur as a special item.

What is the ALH pending order book (Army vs Air Force vs Coast Guard)? When will Navy/Coast Guard grounded fleet get resolution? And what is the status of Airbus civil MRO?

Barenya Senapati: ALH pending orders: Army 20 helicopters; Coast Guard 9 helicopters. Navy and Coast Guard fleet remains grounded (separate issue from Army fleet — Army now back in action for couple of weeks). D.K. Sunil on Navy/CG grounding: We have instrumented 2 helicopters to simulate the specific conditions of the Navy/CG incident. 4+ lakh hours on ALH overall — first incident of this type specific to Navy/CG. Will fly instrumented aircraft in next couple of months. Expect data collection done and case submitted to certification authorities by early July. Resolution expected in July 2025. Airbus civil MRO: Setup at Nashik facility for A320 C-checks. Going through DGCA certification process (EASA next). People, certifications, facilities being set up. Already started some work with IndiGo. Revenue expected to start from Q1 FY27 or possibly next financial year. Investing now in capabilities; revenue will follow.

Has the LCA Mark 1A 83-aircraft delivery timeline changed? What is the assessment of GE engine supply going forward? And on helicopter capacity — with the new LCH Prachand order, what is the total production capacity?

LCA Mark 1A: GE had supply chain issues due to COVID and post-COVID sub-vendor shutdowns requiring re-certification (completed March 2025). First engine delivered April 2025. GE committed to 12 engines CY2025 (firm). We expect supply flow at approximately 2 engines/month going forward. With supply chain behind us, deliveries to IAF will happen as per schedule. Overall 83-aircraft contract execution remains on track. Helicopter capacity: 156 LCH Prachand order (66 IAF + 90 Army) to be executed in approximately 5.5-6 years starting deliveries from FY27-28. Current capacity at Bangalore: 30 helicopters/year for ALH. Tumkuru factory (new): 30 LCH per year being built there — all CAPEX investments already in place. Total helicopter capacity: 60/year combined (Bangalore ALH + Tumkuru LCH).

What would 12 LCA deliveries generate in revenue terms? And on LCA Mark-2 — when does commercialization realistically happen?

Barenya Senapati: 12 LCA deliveries will generate approximately Rs.3,000 crore in revenue. D.K. Sunil on Mark-2 commercialization: First prototype flight expected in FY26 (early next year). Certification period is approximately 3 years → certification by FY29. Production commences FY30-31. We also do concurrent production — as certification matures, we start production simultaneously. So initial production in 2030-31.

Can you give revenue breakdown across manufacturing, ROH, design/development, and exports for FY25? And which platforms beyond Tejas will contribute to manufacturing revenue in FY26 and beyond?

Revenue mix FY25: Manufacturing approximately 23%; Design/Export/Other developments approximately 7%; Repair/Overhaul and spares approximately 70%. Platforms contributing to manufacturing revenue in FY26+: Beyond LCA Mark 1A — primarily AL-31FP engines (240-engine contract at 30/year) and RD-33 engines. Also ALH helicopters. These are the current manufacturing revenue contributors alongside LCA. LCH Prachand deliveries expected to start from FY27-28. HTT-40 deliveries from September 2025. Revenue guidance 8-10% for FY26 with these contributors; we may have better clarity on upside after mid-year review.

What is the delivery schedule for the 12 Sukhoi-30 new aircraft over next 3 years? And what will be the ROH/repair order inflow for FY26?

D.K. Sunil on Sukhoi-30 (12 new aircraft): Lead time of 2 years to restart production line (line had stopped, being revived, material procurement needed). Production starts FY26-27, concludes FY28-29. Most deliveries in FY26-27 with taper-off in FY27-28 across approximately 1.5 years. Barenya Senapati on ROH order inflow: Normally we get approximately Rs.20,000 crore of ROH and repair/overhaul orders per year. That level will be maintained in FY26 as well.

Beyond LCA, what constrained helicopter deliveries in FY25 given Dhruv/Rudra/LCH engines are from Safran/HAL? And why were Dornier deliveries not more than 2 in FY25?

Helicopter deliveries: Entire ALH fleet was grounded after Indian Coast Guard accident. Aircraft were ready but could not be delivered due to grounding. Army and Air Force helicopters have been cleared couple of weeks ago — back in action. FY26 will cover up the ALH deliveries. Dornier: We have delivered 2 Dornier to Guyana (civil variant) — a one-off export. Follow-on order not received yet. We are proactively building Dornier aircraft in anticipation of orders from multiple markets globally. As and when order comes, can deliver quickly.

Given the recent conflict involving extensive drone usage — is HAL pursuing HALE/MALE drones? And what is the CATS Warrior update?

HAL is NOT pursuing the lower-cost commodity drone market — that is highly price-sensitive with many players; not HAL's strategy. HAL targets the UCAV (Unmanned Combat Air Vehicle) space — CATS Warrior is a 3-ton aircraft capable of carrying missiles and bombs. Development ongoing: building prototypes, testing different technologies (data link, engines). Still R&D phase. We will play in the higher-end UCAV market — not commodity drones.

In FY24, there were provisions written back as operational revenue (~Rs.2,100 crore). Was there any similar reversal included in FY25 operational revenue?

No — there were non-recurring revenue items from operations in FY23-24 (the LCA IOC Change Order 3 reversal of provisions). In FY24-25, there is no such reversal of provisions included in revenue from operations. This is why adjusted revenue growth is 7.25% — the comparison base for FY24 was inflated by the one-time Rs.1,502 crore, but FY25 has no equivalent item. Margin guidance for FY26 is for similar operating level, not relying on any provision reversals.

The order book is now 6x+ annual revenue and will grow to 8-9x with new orders. Shouldn't HAL target 14-15% revenue growth to execute faster? And what about EBITDA margins over the next 3-4 years?

D.K. Sunil: In defense aerospace, a 6-7 years backlog is considered healthy. We are investing prudently to avoid overcapacity. LCA Mark 1 production through 2031-32, then facilities transition to LCA Mark 2. This phasing optimizes investments. The 8% guidance is conservative — we hope to do better. An update will follow in 6 months. Barenya Senapati: 8-10% guidance for FY26 with possibility of upside. Double-digit growth from FY27 onwards as LCH and LCA deliveries increase. On EBITDA margins: 31% operational EBITDA for next 3-4 years — sustainable. Diversified product base (engines, aircraft, helicopters) gives stability.

By which year can LCA Mark 1A production reach 24 units per year, and when does it reach 30 units with private sector contribution?

24 aircraft per year (HAL Bangalore 16 + Nashik 8): achievable in FY26-27. The Nashik third line rolls out first aircraft in next couple of months and will be fully productive for 8 aircraft from FY26-27. Private sector partnerships (L&T for wings, VEM for center fuselage, Alpha Tocol for rear fuselage, Tata TASL for vertical fin and air intake) are ramping up — first rear fuselage from Alpha Tocol already received last year. Getting private sector to contribute 6 additional aircraft per batch — 30 total capacity: expected by FY27-28 as private sector investments fully ramp up over next 2 years.