Synopsis:
HAL has signed a Technology Transfer Agreement with ISRO, IN-SPACe, and NSIL to manufacture SSLVs for launching satellites under 500 kg into Low Earth Orbit. Over the next decade, HAL will absorb and mass-produce this technology to meet rising global demand.
The shares of the PSU Defence stock company, specializing in the design, manufacturing, repair, and servicing of aircraft, helicopters, aero-engines, avionics, and aerospace structures, jumped upto 2 percent upon signing the Technology Transfer Agreement with ISRO, IN-SPACe, and NSIL for the Small Satellite Launch Vehicle (SSLV).
With a market capitalization of Rs. 3,03,463.34 Crores on Wednesday, the shares of Hindustan Aeronautics Ltd rose by 2.1 percent after making a high of Rs. 4548.00 compared to its previous closing price of Rs. 4453.50.
What Happened
Hindustan Aeronautics Ltd, engaged in the design, manufacturing, repair, and servicing of aircraft, helicopters, aero-engines, avionics, and aerospace structures, has signed a Small Satellite Launch Vehicle (SSLV) Technology Transfer Agreement with ISRO, IN-SPACe, and NSIL in Bengaluru.
The agreement was signed by senior officials from the involved organizations, including Mr. Jayakrishnan S (CEO, HAL Bangalore Complex), Dr. A. Rajarajan (Director, VSSC), Shri M. Mohan (Chairman, NSIL), and Mr. Rajeev Jyoti (Director, IN-SPACe). The SSLV is a three-stage vehicle designed to launch satellites weighing less than 500 kg into Lower Earth Orbit (LEO).
Under the terms of the contract, HAL will absorb the SSLV technology over the next two years, followed by a 10-year production phase. The agreement grants HAL a non-exclusive, non-transferable license to the SSLV technology, which covers design, manufacturing, quality control, integration, launch operations, post-flight analysis, and training support. HAL will be responsible for the mass production of SSLV to cater to both Indian and global demands.
Dr. D. K. Sunil, CMD of HAL, stated, “HAL will work closely with IN-SPACe, ISRO, and NSIL to absorb, indigenise, and commercialise the SSLV technology, ensuring the highest standards of quality and reliability in small satellite launch services. HAL recognises the strategic importance of SSL V in meeting the growing demand for launching small satellites for applications in communication, earth observation, navigation, and more. HAL’s efforts will not only ensure indigenous manufacturing of SSLVs but also create new opportunities for Indian MSMEs, start-ups, and the wider industrial ecosystem.”
Financials & Others
The company’s revenue rose by 10.85 percent from Rs. 4,348 crore to Rs. 4,819 crore in Q1FY25-26. Meanwhile, the Net profit declined from Rs. 1,437 crore to Rs. 1,384 crore during the same period.
The company has achieved strong profit growth with a 24.5% CAGR over the last five years and maintains a solid 3-year ROE of 27.3%. It has consistently paid a healthy dividend payout of 31.4%. While the industry’s P/E is 69.3, the company’s stock P/E is 36.6, indicating potential value compared to its peers.
Hindustan Aeronautics Limited (HAL) is one of the world’s oldest and largest aerospace and defence manufacturers, established in 1940 in Bengaluru, India. It plays a vital role in India’s ambition for self-reliance in aviation and defence, designing and producing fighter jets, helicopters, engines, avionics, and related systems for both military and civilian use.
As of the end of FY25, the company’s order book stands at Rs. 1,89,300 crore, up from Rs. 94,127 crore in FY24, even after executing a turnover of Rs. 30,105 crore in FY25. The company expects an order pipeline of approximately Rs. 1 lakh crore over the next 1-2 years, which includes orders for 97 LCA Mk1A, 143 ALH for IAF/Army, 10 DO-228 for Navy/Coast Guard, and the upgrade of 40 Dornier aircraft for IAF.
The company plans to invest Rs. 14,000-15,000 crore over the next 5 years in capacity expansion, focusing on manufacturing lines for helicopters, fighters, trainers, aero engines, and ROH facilities.
The company expects FY26 revenue growth of 8-10%, with potential for double-digit growth from FY27 as execution ramps up. Medium-term, the management aims to sustain double-digit growth as new platforms scale. For margins, the EBITDA (including other income) is projected at 38-39%, with operational EBITDA at 31%, and the company expects to maintain these levels over the medium term.
Written by Sridhar J
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